Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Thursday, August 21, 2014

Urban retail blatherings

The Mosaic District has a "public" green, which is framed by a movie theater-restaurant building, with a digital screen mounted on the facade, to support public screens, as well as a coffee shop fronted by a small splash fountain set up for children to play in.

For more than a year, I've been intending to write a piece on the new phase of retail development being hyper-activated and experiential.  The Union Market area is one example.  The Mosaic District in Merrifield/Fairfax County is another.  But that piece is still percolating.  In tthe meantime, the points in "The long term shake out of local retailers and independent commercial districts" from 2013 are still relevant.

Meanwhile...

1.  GIS for store site selection isn't new.  Yesterday's Post had a story, "Wendy’s uses mapping software from Calif. firm Esri to pick new locations," about how miraculous it is that retail chains use GIS systems to shape store selection.

Um, this has been the case for decades, retailers using GIS to pick stores, although the process continually changes and becomes more powerful coincident with improvements to GIS software systems.

In my 2006 piece, "Why the future of urban retail isn't chains," I discussed how those kinds of demographic software systems undersell urban locations in favor of the suburbs.

2. Retail chains can change and put stores in cities.  But I guess the title and thrust of my 2006 piece is wrong, at least for strong real estate markets like DC or NYC--JC Penney just opened a department store in Brooklyn, and supermarket chains like Kroger and Giant have rediscovered the city, and supermarket chains like Safeway are upgrading their urban stores in part by redeveloping single use supermarket sites into supermarkets on the ground floor with housing on top.

The (re)new(ed) Safeway store in Petworth (pictured at left) is awesome, as is the Giant Supermarket on O St. (which seems to mark a new direction for Giant, something I suggested in 2012 in "Urban retail #4: how to prevent the coming failure of the DC region's Giant Supermarket chain").

Big chains have rediscovered the cities.  And in some cases, like Walmart, smaller stores.

Although the DC market specifically hasn't been marked by a lot of creative experimentation by "local" retailers, because we don't have many locally-based retailers of a significant size any more (although there are some chainlets like Lou Lou, Dawn Price Baby, South Moon Mountain, and the Real Cool Hardware Stores affilated with Ace Hardware Cooperative, etc.).

See for example, "It ain't true: chain retailers are entering the city, but not necessarily on the city's terms,"  "Another point about urban retail: Whole Foods, Design within Reach, and American Apparel" and "Urban retail #3: Ace Hardware Express and Unleasheashed by Petco" from 2012.

This piece, "Retail Action Strategy," links to some of my best writings on urban retail.

3.  The opportunity for independent stores is more narrow and lies in traditional commercial districts with unusually-sized spaces, often owned independently, not by big real estate companies, compared to the large and open spaces necessary to support big stores.

4.  Just as brick and mortar storefronts need to be engaged in e-commerce, it helps branding for people to be able to see storefronts associated with e-commerce businesses.  Today's Post has a story, "Online shopping is the future. So why do so many Web retailers want to be in stores?," about how amazing it is that online commerce sites are adding "brick and mortar" storefronts to support and extend their business reach.

Probably the most important book I ever read on these kinds of issues was in 1988, when I read Maximarketing.  It's about "direct marketing" (of which e-commerce is a variant).  The point the book makes is that marketers need to maximize their use of all of the channels that are at their disposal to move product.

5.  Relatedly, "sales" and "sales advertising" are other kinds of events that push people to commit and to buy.  People need reminders.  That's why, unless you can be the absolute market leader, like WinCo, a supermarket chain based in Boise, Idaho, "everyday low pricing" doesn't work as a marketing strategy, because people need reminders to go and shop for things that they don't necessarily need.

That's where Ron Johnson got JC Penney's totally and completely wrong (The 5 Big Mistakes That Led to Ron Johnson's Ouster at JC Penney"," Time Magazine).

6.  Delivery services like Uber's new service will always be niche, for higher income segments  ("Uber delivering convenience store goods in DC but only in wealthy neighborhoods," Post) .  Whether such businesses can scale--except on the race to the bottom standpoint of poor driver-messengers desperate for money being forced to continually lower their asking prices--is an open question, although I think unlikely.

E-commerce options do broaden the ability to provide more such services a little more cost-effectively, but the demand isn't high enough to make these big businesses worthy of stratospheric valuations.  Good thing for entrepreneurs that Wall Street and venture capitalists haven't figured that out.

If home delivery were so great, PanAm International or MegaMart, Latino supermarkets in the area that will drive patrons home if they spend at least $50, would dominate the market.

7.  Did anyone notice that in a market basket comparison of four DC-area supermarket options--Safeway, Giant, Walmart, and Harris-Teeter--Giant had the lowest price?  See "Food desert no more: the tightening battle for D.C. grocery" from the Post.  I like Giant well enough, but except for their newest store at 8th and O Streets NW, they mostly don't have the specialty items I am searching for.

8.  Walmart's same store sales keep dropping, but the smaller store formats, Express and the Neighborhood Market supermarkets, are doing comparatively well.

9.  Greater Takoma has been highlighted by the Express as a hot DC neighborhood ("Takoma and Takoma Park share a hippie history that lingers today").  That's basically my neighborhood.

One of the reasons we chose to live here (we actually live in Manor Park, the neighborhood that borders Takoma) as opposed to somewhere else is because there was a commercial district core--albeit in Maryland, right on the border with DC (although part of the commercial district is in DC too) + a "short walk" to the Metrorail station and close enough (five miles) to downtown.

A big reason for the area's success is the Metrorail station--large parcels around the Metro are getting developed for housing, and as housing is added and housing in the greater neighborhood turns over, there are new customers for retail.

But the other is that there is an active commercial district revitalization planning, management and recruitment organization, the Old Takoma Business Association, which runs a Main Street program that is recognized by the State of Maryland, but not DC.  Even so, it gets occasional grants from DC (e.g., for a facade program a few years ago).  But the group, with the assistance of the City of Takoma Park!!!! actively recruits quality retail businesses, for example a hardware store and a restaurant affiliated with Jeff Black called Republic are in the Maryland side, but they help recruit businesses to the DC side too.

The City of Takoma Park does this because they recognize that a strong commercial district in the DC side helps the Maryland side, and vice versa.

Takoma TheatreA sorry problem is that the Takoma Theatre is vacant and the cantankerous owners prefer to redevelop the building as condos rather than "let it go" (a la the Frozen movie) and let others take it on and bring back a multipurpose theater and arts facility.

Were there an active theater there, it would help draw more patrons to the commercial district, especially to restaurants, and it would distinguish the commercial district from most others in the area.
The building is one of the most intact neighborhood theaters still extant, although it has been closed up for many years.

We were just in Salt Lake City as part of a family reunion, and friends who live there are a couple blocks from the 9th and 9th neighborhood district, which was written up in the Post Travel Section last year ("Travel: In Salt Lake City, a dynamic enclave gives new life to a neighborhood").  One of the distinguishing elements of that commercial district is the Tower Theatre, which is run by the Salt Lake Film Society.

If only... Next time we're there, We'll have to take in a showing.

10.  Unfortunately, the Express article didn't mention the restaurant that sealed the deal on why we chose the Greater Takoma neighborhood, Middle Eastern Cuisine.  (Plus it has two supermarkets within easy biking distance, a Giant, just over the border in Maryland, and a Safeway.)  Mark's Kitchen is over-rated in my opinion.

We really like Middle Eastern Cuisine.  It's basic Middle Eastern food that's very good, the prices are great, the food is consistent, the service is decent, and now they also have a separate bar called Olive Lounge, located in the back, although it's a bit noisy.

At the time I had been working in Brookland and eating in Colonel Brooks Tavern a lot, and their food was way overpriced and inconsistent.  So by comparison, Middle East Kitchen seemed like a great draw and asset.

11.  Speaking of Market Basket, a supermarket chain in Greater Boston, strife between ownership factions (not unlike the dynamics that pushed the ownership of the DC area Giant Supermarket company to a Dutch company) is destroying the company.  Employees loyal to the CEO who was ousted have walked off their jobs, and the operations of the stores are grinding to a halt  (Market Basket Saga in Massachusetts," Boston Globe).

I am always interested in stories of "value destruction" (DC Government is full of them) but this doesn't seem to be necessary.

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15 Comments:

At 5:04 PM, Blogger dan reed! said...

The park in the Mosaic District is actually a public space - or at least, half of it is. The eastern section (closer to Gallows Road) is a Fairfax County park called Merrifield Park, which I assume means it comes with all of the rights of a public space (free speech, right to assemble, etc.) The space as a whole though has definitely become one of my favorite public spaces in the region, especially on the weekends - lots of people-watching.

 
At 5:43 PM, Blogger Richard Layman said...

Did not know that. The space is extremely well done.

In a comment on another post, I said we need to take DC officials on a bus trip to Mosaic and Reston Town Center, so they get a better idea of the competitive forces that DC proper faces.

 
At 8:50 AM, Anonymous Anonymous said...

used to live in a basement place at Whittier Gardens in Takoma DC- and walked by the old theatre every other day.It has been abandoned for at least 20 years now-I left back in 91 and the area was in serious decline then with wolf-pack styled gangs of youth terrorizing people at random on the streets and the crack days in full bloom.I was roughed up by a gang of some 20 kids trying to walk to the Takoma metro station one time and was glad to get out of there. Since then things have calmed down a lot. The area has much potential. It needs more retail around the metro station and fixing the theatre would help a lot- I agree. Another art center place opened up in a building on the Maryland side some years ago and this is good news.There used to be take out places near metro and a nifty hardware store on Carroll - not sure if any of that is left.The crack era was evidently as hard on this neighborhood as the riots were in other places in the old city.

 
At 9:54 AM, Anonymous charlie said...

1. I'd agree with you on local delivery, seems big in SF because of the hills but not popular elsewhere. Uber making moves there is more about demonstrating possibilty of uber-for-logistics (think lasership with private cars) than real local delivery.

2. Why am I not surprised that the wal-mart model of selling to poor people/goverment benefits isn't growing.

3. Arlington did a terrible disservice by kicking out all the interesting ethnic food (mostly ending up in Fairfax) and repalcing it with bland chains and craft beer. With lower rents, there is a possibility of tier 2 areas in DC to capture that market. However, just as retails competes with food, food competes with alcohol.

 
At 10:51 AM, Blogger Richard Layman said...

wrt your point 3, yep. And even marginal shopping centers (e.g., Eden Center) can be places for such activity.

I've mentioned before how one bay of a three bay "strip" center in West Seattle is a cool as hell coffee shop, next to a traditional convenience store, but I forget what's in the third bay, something very ordinary.

And in fact, had this conversation on an H St. list separately. Someone was complaining about lack of restaurants on the west side of the street, that a CVS will come in with the Whole Foods, etc.

She said why is 8th St., U St. different, and said it's a problem of planning.

I said planning doesn't get down to the storefront by storefront level and that the "rules" are hidden to her, based on the traditional buildings and their constraints, which favor restaurants that are independent.

The big spaces on the west end of H St. are conducive for chains (like Giant, Whole Foods, CVS, etc.).

 
At 10:58 AM, Blogger Richard Layman said...

wrt uber for logistics, I've read that before, quotes fromm one of the founders. Are FedEx and UPS so off the mark that there is a hole in the market for Uber (other than the young being familiar with them and once taking on positions of authority in purchasing, being able to ""hire" Uber)?

Obviously, same day delivery. But again, the drop off in bike messengers (because of email, except for filings) indicates the demand for same day delivery of stuff isn't that great.

... I do think I mentioned a small grocery group (a handful of stores) in California is experimenting with same day/hour delivery of prepared foods + groceries.

yummy.com

http://www.theshelbyreport.com/2013/07/29/yummy-coms-on-demand-delivery-aims-to-mirror-consumers-life-offline/

Doubt you were around back in the day of Kozmo.com ?

http://money.cnn.com/2013/09/25/technology/kozmo-delivery/

 
At 11:00 AM, Blogger Richard Layman said...

re selling to poor people, we were in Colonial Beach, VA at Memorial Day with some neighbors. (It was really fun and I am sad to say I didn't know about it before...)

There was a Food Lion and a Family Dollar. The Family Dollar was closer and I was surprised at how much food and grocery and kitchenware stuff they had. The basics sure, but inexpensive.

Walmart is losing out in part to the dollar stores, which on kitchenware and very basics, are cheaper.

 
At 11:10 AM, Anonymous charlie said...

RE: Uber for logistics -- again I agree. But they are selling them selves as a platform for drivers. Clearly with lasership there is a space in key cities for a fedex/USPS competitor.

I have no doubt that grocery and/or bulk item deivery is good. I wanted a case of wine from WF yesterday but didn't have time to drive there and didn't feel like taking a car back just for that purchase.

But as a business? I tried to get some potting soil from amazon -- 100% more than local store (but free delivery!). Actually 400% more for the size.

 
At 11:24 AM, Blogger Richard Layman said...

One of the things my bike business tried to "sell" to the local downtown hardware chain was the idea of bike based delivery of goods.

I think the problem is we made it too complicated. We were trying to work with a Dutch (or Danish?) trailer provider, and that wasn't really necessary. (The company that provides biks+trailers to the Ikea in Denmark.)

You just need some cargo bikes and some trailers.

As long as they can group some orders for efficiency, it could work. It's not like you absolutely need a particular item right then.

Same for Whole Foods maybe.

2. I used to suggest this regularly wrt Eastern Market, but the vendors are very much set in their ways.

3. And similarly, wrt "commercial districts" a combined delivery service (all for one, one for all) rather than separate delivery services would make more sense.

But these companies aren't used to working with each other.

Individually it might not make sense for the hardware store to do it, but if they could do it jointly with Whole Foods and CVS, all from the P St. location, they could cover a fair amount of the core of the city.

 
At 12:42 PM, Anonymous charlie said...

Well that is the idea of the Uber model. Don't know about wine/beer delivery but legality doesnt' seem to concern them.


WF is also using Instacart now.

 
At 2:26 PM, Anonymous charlie said...

http://www.nytimes.com/2014/08/24/magazine/delivery-start-ups-are-back-like-its-1999.html?_r=0

 
At 2:38 PM, Anonymous charlie said...

sorry bad day not providing much context:

http://www.americanbanker.com/bankthink/postal-banking-maybe-not-so-crazy-after-all-1065325-1.html

 
At 2:46 PM, Anonymous Richard Layman said...

mag delivery... it depends on how good the local deliverers are.

The Wash. Post carriers, at least in Takoma, suck. They don't deliver the magazines.

I had to have both Adweek and BusinessWeek switch back to postal delivery, because I never got the magazines.

2. and postal banking... when I was a kid, there was the savings bond program. I am fine with it...

 
At 6:30 PM, Anonymous Christopher said...

While it's nice that JCPenny has built a store in Brooklyn for people who live in that area which is poor and underserved. I'm not sure anything that is happening out there in East New York is unlike what cities have tried doing for decades in those outer areas of the city. Namely mall building as an economic development strategy that focuses away from the local community and hopes to keep some imagined group of consumers from driving to the suburbs. NYC has a lot of malls in the areas in the edges of the boroughs. Many are new. The Bronx just opened an upscale mall in Co-Op City. A new outlet mall (the first!) is coming to State Island (which is also rebuilding its 1970s era mall. There other examples too. The East New York location is particularly a missed opportunity as ENY is older and denser than other parts with a significant underutlized transit. It's an area that the mayor and the planning department have targeted for building more affordable housing to meet the mayor's housing goals. In part because the area has less population than when the transit and housing was originally built. That mall planning predates the new mayor but it's old fashioned thinking and typical of the way Bloomberg let the city's outer neighborhood's plan economic development as if it was 1972.

 
At 7:24 PM, Blogger Richard Layman said...

it's unfortunate that the planning regime is that messed up, and not focused where they should be.

... but DC has done the same thing, with the Rhode Island Place development (HOme Depot) which is very suburban, but could have been done in a way to strengthen urbanism and the street grid in that area, with Congress Heights and the shopping center there, etc.

 

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