What Smart Retailers Know
Ten things that smart retailers are doing to figure out where to better locate stores and better serve their customers.
Dan McNulty, PE

McNulty

Getting to know you. Retailers are conducting more up-front research to better understand the community in which they propose to do business. They are now considering how they might modify traditional programs and prototypes to be more in line with individual community goals and character. Retailers are attempting to see how they can embrace some of these issues, whether architectural standards, parking, security, landscaping or hours of operation, and incorporate them into design without fundamentally changing who they are as a retailer or how they do business. This has become a necessity for some of the largest format retailers in recent years, but the practice is gathering steam at all levels of retail.

Addressing community concerns more specifically. Carrying this thinking a step further, development methodology now asks, “How does this site — as a physical entity — fit into the community? What can we do to be proactive instead of reactive?” 

Serious issues facing communities include areas like safety, transportation, tax base, employment, childcare, or open space and parks. Even if these issues are not applicable to the exact site under proposed development, accommodations can be made that reflect an understanding of the greater community needs. These modifications can take the form of fewer entrances, increased lighting, changing facades or positioning a building to better integrate with existing or anticipated land use and transportation needs. If site accommodations are not feasible, developers and retailers are reaching out to the community in other ways — assisting with fundraisers, donations to park funds, donating hours for community service, etc.

Retailers are being encouraged to take this 30,000-foot view and they are doing so. Addressing community issues on-site as part of the approval process or contributing, for example, to a traffic study or park fund, positions the developer and retailer as responsible neighbors. Sitting down with neighborhood groups, buildings grass roots support, and reaching out to local merchants all yield results. Realistically, the development approval process isn’t strictly about what a zoning ordinance says, but how local officials and residents feel about an entity as a neighbor.

Waste not, want less. Serious, sophisticated energy conservation is another important trend in retail development. We have already passed through a first wave of energy conservation in terms of “smart” buildings with computerized climate control or “best practices” building materials. We are now on the next wave, which includes incorporation of multiple natural light sources into building designs; recycling of rainwater for on-site irrigation; using roof water for flushing of toilets; or more use of recycled building materials, such as crushed concrete for fill. These approaches do take new kinds of investment, i.e., we still require conventional systems as backups, but we can expect more comprehensive efforts along these lines in the years to come. Such efforts are appealing from a good citizen standpoint and we expect costs will continue to decrease as the experience level increases.

Sustainable development. We are producing site and building designs that are more sensitive to the environment, embrace the latest technologies and are meant, quite simply, to last longer and be more easily adapted to new uses in the future. Building suppliers or mass merchants move with populations. Even major retailers are thinking about how their properties could be more easily re-used in ways they never did previously. This line of thinking is productive across all lines — from aesthetic, functional, energy conservation, investment and community perspectives. Less eyesores in the future and less properties to “unload” once they have served a distinct and time-limited commercial purpose, even when that time limit is 10 to 20 years.

Adaptive reuse. On the flip side, the experience and capabilities in reuse of properties continues to grow. We have many stunning examples of downtown revitalizations or Main Street/town center developments, often in locations with outstanding demographics or where seasonal or tourist cachet augments year-round residents. But plenty of bread and butter adaptive reuse opportunities await creative developers and retailers in mature, metropolitan suburban areas throughout America, those first and second post-World War II growth rings about our historic city centers. While many of these projects are challenging with respect to land assemblage or zoning, the audience for spending does exist in these communities. When we redevelop, we utilize existing utilities, roadways and other infrastructure and help bring business back into struggling local economies.

Time pressures. This brings us to a critical issue, the timing of development, an area where trends are in collision. On the one hand, speed to market is a significant issue with retailers, who must supply concrete information to shareholders or stakeholders about fulfilling growth strategies or meeting financial objectives. On the other hand, municipalities, in general, are making the approval process more difficult and time consuming. When windows of development opportunity are missed, the retailer takes a hit and so may the community in terms of lost opportunities to add jobs, build tax base, upgrade infrastructure, or improve the overall stock of commercial properties. We don’t see these issues going away anytime soon, but they can be ameliorated by some of the strategies suggested earlier.

I stand alone. An almost relentless trend right now is the desire of more and more retailers, including the small- and mid-size box merchants, to do business in a freestanding setting. There are undeniable attractions and advantages: destination signage and access; dedicated parking; more direct control over costs and hours of operation; one’s own sense of place and identity. The standalone trend is likely related to the general diminishing of the importance of anchors in driving customers to adjacent stores. The chain drug store, the supermarket, smaller department stores, electronics stores, office supplies, even a vitamin outlet all want to weigh anchor on their own these days.

While many standalone operators have substantial resources and expertise, it remains to be seen if this trend will hinder the move to bio-sustainable (green) storm water management, new modes of energy conservation, or more thoughtful building placement and roadway design. Many of these programs take the substantial resources that a major national retailer or larger scale shopping center can muster.

 It may seem as if retail development is getting harder than ever. In some ways, it undoubtedly is. However, the sum total of the trends just discussed represents retail’s return to its traditional, indispensable role in community development. Today’s best retail developments provide needed jobs and tax base, provide community shopping and gathering opportunities, help solve infrastructure issues, enhance the environment, look better and will last longer, and represent an honest contribution to community life. They have never been as hotly contested — or as eagerly awaited. scb

Daniel E. McNulty, PE, leads the Commercial Land Development Market Sector for Atwell-Hicks, which focuses primarily on retail, mixed-use and office/industrial developments. Atwell-Hicks is a land development consulting firm with offices in Florida, Illinois, Michigan and Ohio.


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