It’s still hard to gain perspective on how bad things were for retail and restaurants during the COVID pandemic. But it is clear that there’s a major shake-up going on, which is a clarion call for being smarter about how we manage and design the experience of shopping districts. Those districts that up their game will come out of this recession with a very strong rebound; those that don’t will continue to falter as the competition for quality and convenience overwhelms them.
The year 2020 said goodbye to some very big retailers like Brooks Brothers, Lord & Taylor, and J.C. Penny, with over 10,000 store locations closed.
Traditional Retailers vs. Retail Ecosystems
Many experts opine that the long list of casualties is less of an aberration and more of an acceleration of existing trends that doomed retailers who weren’t adapting to new market conditions and demographic shifts. Perhaps most of all, traditional retailers are now competing with “retail ecosystems” like Amazon, online behemoths that handle everything from one-stop-shopping to fast delivery to online communities.
It’s too soon to write off physical retailing, however. The online experience will never rival the enjoyment of walking through a great urban district and grabbing a meal, and spontaneous moments with friends and family. Also, think about how stir-crazy the entire world is – we can’t wait to be able to go out again.
But brick-and-mortar retail strategy has to be extremely savvy — retail districts need to think about their own ecosystem approach that offers an irresistible alternative to shopping online.
What is a Retail Ecosystem?
The Merriam-Webster definition of an ecosystem is “the complex of a community of organisms and its environment functioning as an ecological unit” or “something (such as a network of businesses) considered to resemble an ecological ecosystem especially because of its complex interdependent parts.”
Placemaking for Retail Ecosystems
For retail, there’s an innate advantage to clustering in walkable districts (I am not counting malls as walkable clusters – they are a different animal). But the ecosystem of such districts, including mixed-use projects, needs a systematic nurturing that can’t be left to chance – there’s a certain environment that can successfully bind it together, and bind businesses with their communities.
Placemaking can provide that systems approach because it both provides the physical environment as well as the engagement that creates loyalty with the community. Many people in real estate now believe that the strongest anchor for retail and mixed-use is actually the public spaces and the community activity those spaces can attract. These successful mixed-use projects are real communities, and as such they are far more sustainable in the long term.
The Impact of Placemaking During Economic Downturns
Look to the Pearl in San Antonio for one of the best examples of mixed-use and placemaking to be found anywhere. The experience of the 22 acres that make up the Pearl is so exceptional that it continues to perform as the top dining destination in the city. In 2020, not only was Pearl able to hold on to all of its many restaurants, in fact, it opened three new restaurants, including two in the last two months!
What could a retail district ecosystem look like?
In thinking about the possible “interdependent parts” of a district ecosystem, there are several obvious ones, such as:
- A walkable, connected environment within a sufficiently dense urban setting
- A high-quality public realm that provides the anchor attraction
- A mix of businesses that is both useful and entertaining
Great Placemaking is in the Details
Then there are the less obvious characteristics that you only see in exceptional environments.
- Great outdoor retailing with amenities that create an explorable environment.
- Ground floor architectural design stimulates all the senses with rich detail, explorable features, and beckoning entrances.
- Breadcrumb trails of smaller points of interest connect the bigger anchors.
- You should be able to see the shift happen when people enter this kind of district as they suddenly change from walking mode to exploring mode. Their gait cycle slows and their posture loses forward momentum as the head starts swinging more from side to side. And they interact with others around them.
Retail Success Mindset: from Customer to Community
And then there’s a fearless openness to the community. Retail professionals should ditch the word “customer” in favor of “community;” those that fear a closer community relationship are shutting themselves off from very high rewards.
- A successful district vision needs to be shared by business owners, district managers, as well as investors and constituents.
- Retail developers need to go beyond what the market segmentation data says – that’s a commodifying approach that reduces the visitor to the money in their wallet. It doesn’t bring you to authentic engagement with the surrounding community whose loyalty you crave.
- Partners across all sectors need to work in an ecosystems approach to constantly reinforce and replenish district energy. These partners should include:
- city leaders and district managers
- business owners and operators
- civic allies such as advocates, journalists, and neighborhood groups
- owners and developers who are values-driven, not just driven by value-creation
- a loyal following from the community who believe in the overall vision and are constantly being engaged in person and online.
Many of these principles have been applied to downtown districts and Main Streets for years. Today the lessons can apply to more district types, such as:
- Large mixed-used urban projects operated by private developers.
- Public-private partnerships create innovation districts, medical districts, tech corridors, and the like.
- Central business districts that have previously focused on the office. These centers, like midtown Manhattan, are now dinosaurs of the industrial age and will need to become more diverse places infused with retail and recreation.
- Food halls and market districts – see the inspirational Mercato Metropolitano example that is opening up new markets in several cities in Europe and the U.S. in the midst of COVID-19.
- Individual developers amass multiple properties within a walkable urban district.
- Any municipality that has plans to take a more proactive role in helping the future of their downtown retail.
Incorporate Placemaking to Capitalize on the Upcoming Surge
In 2021 and 2022 there will be a new surge of business start-ups looking for sustainable ways to open while building owners are looking to fill vacant space at lower rents. It’s an unsurpassed opportunity to take a new ecosystem approach. Public and private partners have tools at their disposal that can help create a more resilient future for our urban districts.
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