The Future of Retail

Brick-and-mortar stores are coming up with inventive ways to keep from losing shoppers to cyberspace.

“When customers make an online purchase, they’re taking money out of the local community,” says Jonathan Gordon of Admiral Real Estate Corporation in Bronxville. “Every dollar that stays local compounds on itself. There’s a multiplier effect, with taxes on local sales paying for community improvements.”

    There’s no doubt that the double whammy of the Great Recession and the Internet have taken their toll on our Main Streets and malls. With so much competition for our shrinking free time and our disposable income, what would motivate anyone to leave the house to make a purchase? On the Internet, all you need is a credit card and a few keystrokes to order everything from mundane office supplies to designer clothes to exotic collectibles, and you can do it around the clock, without changing out of your pajamas. The Internet has eroded the music industry, the newspaper industry, and the book industry—will it eventually have the same effect on brick-and-mortar retail shops and malls?

    The good news: most of us are still saving on those shipping fees. The national trend, so far, is not as bleak for retail establishments as it is for those other industries. According to Forrester Research, only 7 percent of retail shopping in the U.S. is done online (though people are far more likely to download books, movies, and music than head to a store).

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    In Westchester, in spite of the economy and our changing shopping habits, retail stores are doing even better. Recently released statistics rank Westchester’s retail vacancy rate well below the national average. According to Ryan Severino, a senior economist at Reis, a major commercial real estate performance, information, and analysis firm, while the national vacancy rate for shops nationally is 11 percent, in Westchester, it’s 7.6 percent—quite a difference.

    Still, savvy retailers are looking for ways to stand out and bring in customers IRL (that is, In Real Life). One way to attract shoppers: diversify, meaning offer more experiences at the mall than shopping. Nontraditional tenants—such as yoga studios, fitness centers, and even medical and dental offices—are moving into malls, increasing the amount of all-important foot traffic, says Robin Herko, executive vice president of Friedland Realty. While Mrs. Harried’s son is getting his tooth drilled, Mrs. Harried can browse the boutiques and perhaps buy an item or two. At The Westchester, shoppers can get their cars washed or book a service at the Elizabeth Arden Red Door Spa, and they just might buy something on the way out.

    “Shopping will evolve and become entertainment-focused—less about the objects and more about the experience,” says architect Mark LePage, a partner in Pleasantville’s Fivecat Studio. For example, “There’s no reason for an Apple Store,” LePage says. “They sell almost everything that’s in the store online. But the store allows people to feel the Apple brand—the way they greet you, the way they ring you up, the merchandise displays. It’s all about the Apple brand and experience.”

”If a town can create the Main Street of everybody’s memory, it will be a success.“

    Focusing on entertainment and experience is part of the strategy of the Simon Property Group Inc., the owner of The Westchester and The Galleria in White Plains. “We’ve always done special events, but in the past three years, we’ve been emphasizing them more,” says Simon’s spokesman Les Morris. Simon has been presenting everything from blood drives to job fairs to American Idol-type live musical performances at its malls. In May, The Westchester hosted Simon Fashion Now, a fashion show with professional models preening down a runway, dressed in outfits put together from stores in the complex.

    What about downtown? The entertainment factor is a big draw there, too. Towns with attractions that have made them destinations—such as the nightlife of downtown White Plains; the Music Hall, antiques, and specialty shops in Tarrytown; and the Jacob Burns Film Center in Pleasantville—have an easier time in attracting customers. Downtown shopping districts host green markets, antique car shows, crafts fairs, and seasonal special events to keep consumers on their Main Streets. “Villages that understand it’s about the experience will thrive,” LaPage says. “If a town can create the Main Street of everybody’s memory, it will be a success.”

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    With businesses that have been harder hit by the economy, some downtown retailers have moved to share a space with another related or complementary business, such as a bread bakery and a cheese vendor; or a hair salon and a hat or accessories designer; or a fitness studio and a nutritional specialist. For example, Rothman’s, a celebrated men’s clothier in Scarsdale, invited Lubin’s, a noted destination for young men’s formalwear, to leave its Greenburgh location and carve out a corner of its store for Lubin’s wares, which target a much younger shopper—to both businesses’ benefit.

    If doubling up still doesn’t get rid of vacancies, Main Street landlords may try temporary solutions, such as pop-up stores, galleries, and restaurants; seasonal tenants like a farmers’ market; or a holiday-themed market or attraction. These short-term, use-it-or-lose-it “shopportunites” generate excitement, offer a pleasant surprise, and demonstrate creativity, according to the International Council of Shopping Centers.

    Retail’s recovery is tied to the overall economy, so there are likely to be more rocky times ahead before our region gets back to boom-year occupancy rates. But, even though empty storefronts are a more common sight, don’t jump to the conclusion that local shopping is down for the count.

    Says David Richman, an associate with Rakow Realty in White Plains, “As long as we’re a community that drives, eats, and commutes, we’ll have shopping areas.”

Elzy Kolb is a White Plains-based freelancer with way too much shopping experience, both on land and in the Cloud.

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