Transformation Strategies | Retail Market Analysis

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Strategic Planning Through Transformation Strategies Conway, AR – April 2018

Conway Team Greg Phillips, Main Street Arkansas Kathy La Plante, National Main Street 1|Page

Report Prepared by: Kathy La Plante, Senior Program Officer National Main Street Center 53 W. Jackson Blvd. Suite 350


Chicago, IL, 60604

Introduction

The “Main Street Refresh” initiative aims to rethink the traditional Main Street model so the program is more responsive to economic context and its outcomes are directly measurable. Conway is one of the first Main Street programs in the state of Arkansas to undertake the development of Economic/Transformation Strategies, thanks to funding from Main Street Arkansas, and the Arkansas Historic Preservation Program, a division of the department of Arkansas Heritage. Every community has a unique set of place-based assets, anchors, and consumer markets that help to define a healthy downtown. Enhancing those efforts through a targeted economic development strategy requires a more thorough understanding of the marketplace. One of the best ways to help retain existing businesses and recruit new ones is by preparing information about the specific customers who are currently served, or who could be served by your business district. The local Main Street program provides a very important benefit by developing a comprehensive analysis of the downtown market that aligns vision and consumer data with transformation strategies that drive the organization’s revitalization programming. Most market analysis consultants perform their work and provide local community leaders simply with information. The Main Street Approach is to work together with organization leaders to understand the market data and develop comprehensive and execution driven strategies to deliver economic development results. This approach accomplishes several goals: 

Builds local knowledge and understanding of your downtown’s economy to create a foundation for successful revitalization.

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Identifies current strengths of the business mix and existing business clusters. Supplies relevant consumer data to the revitalization program so it can help existing businesses become stronger. Identifies opportunities for future business attraction and business cluster expansion. Builds a strategic framework for niche development, including real estate development, business development, promotions, marketing, branding, etc.

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This philosophy is enveloped within the new Main Street Refresh. At the core of the Main Street Refresh are economically-grounded “Transformation Strategies.” These Strategies will serve as the foundation for the Main Street’s work. Most of activities within the organization’s annual work plan as part of the 4Point Approach should then be guided by the Strategies and aligned around an agreed direction and outcome. As part of the technical assistance, and as an aid to making the new format easier to adopt, the National Main Street Center developed nearly 20 “off-the-shelf” strategies that can be employed in a range of conditions seen across a variety of communities. These are, essentially, ready-made Transformation Strategies. They are a place to begin and can be customized along the way. We have called this initial set “Catalyst Strategies.” The goal of the provided service was to assist the Conway Downtown Partnership to identify the strategies that are the best fit by using information they already have in hand or that can be easily obtained through data and survey collection.

Executive Summary

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The following relates to a strategic planning Transformation Strategy analysis and development technical assistance visit held in May 2018. Attendees included Greg Phillips from Main Street Arkansas and Kathy La Plante from the National Main Street Center. For Conway, Main Street Arkansas assisted Kathy La Plante in familiarizing herself with the downtown by touring the district, reading background materials, evaluating data, and conducting a community survey in advance of the visit. She evaluated key data sets (demographics, buying power, sales leakage, and business inventory). Based on what was learned from the site visit, market data, and community feedback, three possible Transformation Strategies were offered. The team met with the board of directors and held focus groups meetings with approximately three dozen individuals. The draft strategies were presented at a public meeting to assess reaction and garner feedback. Approximately two dozen people attended the wrap up meeting. This memo summarizes the following:  Draft Transformation Strategies  Community Survey Results  Basic demographic, psychographic, and trade area characteristics  Sales leakage  Business Mix Characteristics  Community Asset Identification The outcome of the inputs (community survey, review of community and business assets, and market data) resulted in the development of three (3) recommended transformation strategies for consideration by the Conway Main Street program and its key stakeholders. The recommended transformation strategies are as follows (please note they are explained in greater detail in the body of the report contained herein): 1. Furniture and home furnishings destination 2. Apparel and accessories 3. Restaurant dining The transformation strategies are reflective of either a key identified consumer group, or business cluster that is already prevalent and thus can be further expanded and/or has potential and thus will likely require more resources, capacity and “building blocks” to fully establish. The next step in this process will be to align on a selected strategy(s) and to discuss a work planning process to begin the hard step of incorporating the strategy(s) into current work plans and new activities that better relate and move the transformation strategies forward. Main Street Arkansas may be able to assist in this effort.

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Community Survey Results

In total 362 community surveys were collected using the online survey tool Survey Monkey. Questions geared toward ascertaining attitudes about downtown and shopping habits were obtained from a wide distribution and cross-section of the community. The following represents a breakdown of those responses. An excel spreadsheet with each survey response was provided to the Conway Downtown Partnership (CDP). In the following Word-Clouds those responses most often noted by survey respondents, appear the in the largest type-font.

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Although most people prefer not to live in downtown, overall, housing expansion in downtown has good potential. Less than 50% said they would NOT consider living downtown, but when adding together YES and UNSURE, they are equal, which indicates a good percentage of people would consider it, given the right options. This should be a positive sign that downtown is a desirable place to live for some with shopping, dining and other businesses being within walking distance. People who live in downtown, typically spend a greater portion of their disposable income in downtown. So, increasing housing options is good for any community. This might include upper story housing above existing storefronts, condos, lofts, apartments, and even hotels or Airbnb’s. More residents in downtown would mean greater demand for quality of life issues like Furniture and home furnishing, appeal and dining and entertainment; three areas where we think Conway excels. Increased house makes downtown more active beyond 5PM. Some businesses that close at 5PM, might consider extended hours if residential density increases. Public gathering places will also be key to attracting downtown residents. Overall, housing expansion in downtown has good potential. When asked, “why you would not consider living in downtown”, there were four primary answers:  I like having land, a yard and garden, and place for the kids to play  I love my current home and location (garage, quiet, safe, schools)  I have pets and kids – not conducive to downtown living  Parking, traffic and congestion Other reasons mentioned by a few respondents include:  Noise  Stairs  Don’t like apartment living  Flooding  Safety after dark

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The survey also asked respondents age and there was a good representation of the community except for youth. In the future, CDP might consider a survey focused on the youth and what their expectations and ideas are for strengthening downtown Conway.

The last question asked in the community survey was “In one sentence, what sets downtown Conway apart from other places?” Main Street programs should build on their unique assets, and this list notes what those assets are. A wide variety of responses were given. Here is a short summary of those answers, both positive and those that feel additional change is needed. The complete set of responses was provided to CDP.       

“Everyone is enthusiastic about the city’s growing downtown area”. “Conway has a good mix of restaurants, shops and businesses and good local leaders who work together to create a climate of success.” “It’s where toad suck is.” “Downtown is hometown and arts friendly!” “Downtown Conway is doing a great job of combining a small-town southern feel with the vibe of an up and coming area.” “Friendliest downtown around.” “Its proximity to a larger city, yet it feels like a smaller, safer, more progressive town.”

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”Conway is full of places to shop, has three colleges, and a continually revolving population that provides the unique opportunity to meet people from all over the world without leaving town.” “I believe that no bigger than Conway is, downtown is beautiful, interesting, diverse, and full of history.” “The walkability in downtown attracts people to shop, eat, and play - which ultimately brings more money to the area.” “Smart growth that focuses on quality of life.” “Progressive, motivated and very talented leaders!” “It's the heart of my hometown...as the health of downtown Conway goes, so does the rest of the body.” “Love the old style and feel of the buildings.” “Inclusive of community, sustainable development, colleges and environment.”

Responses hoping for improvement include:  “It's lack of significant parking to support the local businesses.”  “People I have spoken to would rather go other places than downtown.”  “Still viable but struggling.”  “It is a healthy downtown that has recently lost some important retail and I hope we can bring in more retail to sustain its health.”  “Conway has the potential to be a thriving community, but attitudes from merchants to leadership need to adapt.”  “It’s severely behind the times compared to other thriving downtowns that have recently focused on revitalization (e.g., Bentonville, Fort Smith, Fayetteville square).”  “Small town feel close to little rock, but slowly loosing that feel.”  “Shops come and go.”  “Conway's downtown seems to show less momentum in the direction that will appeal to younger visitors; it lacks an appeal to be a destination, a place to go and spend an afternoon/evening.”  “It's sad to see businesses go out of business or even be moved. There's no way to go to a restaurant without having to park a mile away no matter what time of day you go.  “At this point, nothing...downtown has potential...deal with the crime...get rid of drug dealers downtown and all over Conway....Have stores open downtown when people can shop.”  “Lack of entertainment venues for socializing with others.”

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Market Overview

The market overview section evaluates the market based on trying to ascertain the inherent competitive advantages of downtown Conway. Balanced with input from the community, as well as current placebased assets and anchors we can develop Transformation Strategies. The following represents summary charts of collected market data based on a series of 3 drive times (5 min, 10 min, and 20 min). Below is the trade area map for which data was extracted.

Demographic and Psychographic Characteristics Summary

The following represents a summary of key points that contribute to the development of the transformation strategies from demographics and psychographics review.

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A complete set of ERSI data has been provided to CDP, but a few observations on population characteristics and trends are worth noting.

5-minute drive area Population is increasing modestly (0.43% annual rate) Median HH income is low at $32K. (Conway median $46K; Faulkner Co. $38K; US $59K) Young median age at 26.4 (US median 37.8) Family HHs (related, more than one person) are forming at a slower rate. Students are generally not counted at school, but young age and depressed HH income raises question if some offcampus students are depressing these numbers.

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5-minute drive area A few observations on race and ethnicity: Population is racially diverse and becoming increasingly so. African American / Black population is increasing modestly. Hispanic population (which can be any race) is relatively stable and relatively low at 7.3%. (For comparison, US pop of Hispanic origin is 17%)

Psychographic Information Psychographics is the study of personality, values, opinions, attitudes, interests, and lifestyles. Psychographic studies of individuals or communities can be valuable in the fields of marketing, demographics, opinion research, prediction, and social research in general. They can be contrasted with demographic variables (such as age and gender), behavioral variables (such as usage rate or loyalty), and organizational demographic variables (sometimes called firmographic variables), such as industry, number of employees, and functional area. When a relatively complete profile of a person or group’s psychographic make-up is constructed, this is called a “psychographic profile.” Psychographic profiles are used in market segmentation, as well as in advertising. Some categories of psychographic factors used in market segmentation include:  Activity, interest, opinion (AIOs)  Attitudes  Values  Behavior Tapestry psychographic data helps communities and businesses understand consumer lifestyle choices, what they buy, and how they spend their free time. Tapestry classifies US residential neighborhoods into 67 unique segments based on demographic and socioeconomic characteristics. The top psychographic profiles for Conway are used to gauge possible shopping characteristics of downtown’s largest potential shopping demographic. The following outlines the top three (3) groups, which shows a large category described as “Senior Escapes” followed by “The Great Outdoors” and “Retirement Communities”, as the dominant categories.

City of Conway

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5-Minute Drive Area

10-Minute Drive Area

A few observations on Tapestry profiles: • No one dominant segment (e.g., >50%) • “Up & Coming Families” and “Bright Young Professionals” are most closely aligned with downtown’s current offerings • But, note split characteristics of market: different consumer needs, preferences, and price-sensitivity among families vs. single and non-family households. Does downtown address both or should it try to target one or more segments? Following is the report for Up and Coming Families (7A) segment as described by ESRI for Conway’s top category in the 10-mile radius. The other segments can be accessed on the ESRI website for free at: https://www.esri.com/en-us/arcgis/products/tapestry-segmentation/zip-lookup and have been provided to CDP.

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Other Market Profile Information on Up and Coming Families: 

Rely on the Internet for entertainment, information, shopping, and banking.

Prefer imported SUVs or compact cars, late models.

Carry debt from credit card balances to student loans and mortgages, but also maintain retirement plans and make charitable contributions.

Busy with work and family; use home and landscaping services to save time.

Find leisure in family activities, movies at home, trips to theme parks or the zoo, and sports; from golfing, weight lifting, to taking a jog or run.

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Other Market Profile Information on Set To Impress 

They listen to a variety of the latest music and download music online.

Majority have cell phones only, no landlines.

They use the Internet for social media, downloading video games, and watching TV programs.

They own used, imported vehicles.

Residents prefer shopping for bargains at Walmart, including discount stores like Kmart, Big Lots, and the local dollar store.

They enjoy leisure activities including going to rock concerts, night clubs, and the zoo.

Set to Impress is the highest segment for downtown, a price conscious consumer that CDP might keep in mind as business recruitment occurs, aiming for their price point would be prudent. They are also seeking what others in the survey mentioned about having nightlife and entertainment improved in the downtown area. Conway is also a College Town and Bright Young Professionals city, evident in the median age for the city, so the following two tapestry segmentations should be considered too.

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Business District Characteristics

In this particular area, we are visually and through data points seeking to better understand strengths and/or voids within the downtown marketplace of certain business-related clusters. Some key points to take-away from the current downtown business characteristics: • There are 353 businesses in ¼-mile radius – Approx. 55 are retail – Approx. 17 restaurants • Vacancy Rate (Approx. 10%) on the first floor • There are distinct business clusters in: – Furniture, home furnishings – Apparel – Restaurants Sales Void Analysis The Leakage/Surplus report provided for Conway’s trade area measures the balance between the volume of retail sales (Supply) generated by retail businesses and the volume of retail potential (Demand) produced by households within the trade area spending on goods and services. Leakage: Leakage in a trade area represents a condition where demand exceeds supply. In other words, retailers outside the trade area are fulfilling the demand for retail products at a greater rate than those 18 | P a g e


within the trade area, therefore, demand is “Leaking” out of the trade area. Such a condition can on one hand highlight a potential opportunity to recapture those “leaked” sales, or suggests an inherent weakness within the trade area that may prove too difficult to pull back those “leaked” sales. Surplus: Surplus in an area represents a condition where supply exceeds the area’s demand. Retailers are attracting shoppers that reside outside the trade area. The “Surplus” is in market supply. On one hand, there are many business clusters like Restaurants, Auto Dealers, etc., in which an over-supply can suggest a large strength that can continue to be enhanced. Whereas an oversupply in a retail market like floral, doesn’t necessary mean the “Pie” can grow any larger and thus may be fully saturated already and not worthy of further expansion. The following graphic looks at leakages and surpluses for the downtown Conway’s trade area based on the zip codes designing the primary trade area. This example shows the 5-minute radius, which obviously shows that Conway is a destination for others to come and shop and dine since in almost every category, the downtown shows a sales surplus.

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Some questions to ask about sales leakage and surpluses: • Where are the surpluses coming from? Who is coming to Conway and accounting for this spending? • To what extent is downtown capturing the surplus (imported) spending? • Theoretically, “uncaptured sales” are not the problem – some people inside the drive area go elsewhere to shop. Are there sectors where the downtown market is saturated? • Are there sectors that you think could still support additional businesses, despite the surplus?

Market Data and Place-Based Asset Summary In evaluating Transformation Strategies, market data never truly pinpoints the exact market or competitive advantages for downtown. However, when combined with a review of the existing business and community assets within both the downtown and on a regional level in some cases, it can both support the Transformation Strategies, as well as provide the themes that help to define the unique market position. A complete set of the ESRI data has been provided to CDP. The following are highlights of the market data, and place-based asset findings: Place-Based Assets Another area to clarify and define potential Transformation Strategies for your downtown is in evaluating your current place-based assets. These current assets directly demonstrate current traffic draws to downtown as well as area strengths.  Very attractive, intact downtown.  Retained footholds in sectors where many other downtowns have not – e.g., home furnishings and apparel.  Proximity to a large consumer market in Little Rock.  Unique Toad Suck Festival is part of the city heritage. 20 | P a g e


Potential Transformation Strategies

Based on community feedback and survey input, coupled with market data and current business mix reviews, we evaluated some early considerations by asking a few key questions to ensure that the Strategies can provide unique, competitive positioning for downtown Conway. After some initial feedback we are recommending the following Transformation Strategies for CDP’s consideration. Main Street Arkansas and National Main Street Center would suggest that the Board of Directors consider each of the these, but select only one or two to work on in the near-term. As with any program, new or old, it is critical to focus your resources and capacity on transitioning your efforts within the Four-Point Approach and begin to target, through Transformation Strategies, specific market areas. These strategies will develop over time and should be reviewed every three to five years. Some projects may be short term, but the idea of establishing Transformation Strategies it to help the organization plan for long-term implementation, as more difficult projects needs more time for planning and implementation. All activities of Main Street don’t have to align with the chosen strategies, but CDP should aim to make sure that most of its projects and programming do fit within the strategies. Some projects may need tweaking to better align with the transformation strategies.

#1: Furniture + Home Furnishings or “Home Living” A Home Furnishings strategy pursues a cluster of retail, service, and professional businesses related to the home, including interiors, furniture and housewares, floors and finishes, garden and outdoors, design and construction services, and other businesses related to home life. When the Home Furnishings strategy is fully developed, your downtown or commercial district will be recognized as a “go-to” place for goods and services related to making a home. To be successful in the diverse category of home furnishings, the business mix does not necessarily need to be comprehensive, but it should contain at least several (in a small town) to a dozen or more (in a larger downtown or urban district) related businesses within a tight geographic area – usually a couple of blocks. The inventory of contributing businesses is typically “complementary”, meaning it will likely include offerings related to different aspects of the home – a furniture store and a paint supply store, for example. The business mix may also include more focused clusters where the contributing businesses are “competitive” in nature – e.g., several furniture stores selling sofas, tables, and chairs, but of different styles. Because many home furnishings goods and services are only occasional purchases, a Home Furnishings strategy functions as a destination and its trade area is therefore relatively large. In a major city, there might be only two or three districts known for being the go-to places in this sector. In a rural setting, a downtown with a strong home furnishings strategy could have a trade area of 50 or 100 miles or more. This could be s strategy that draws more consumers from Little Rock and into Conway. The Home Furnishings strategy is broad and includes a wide range of businesses. In addition to businesses directly related to the strategy, restaurants are a desired amenity, especially because shopping for home furnishings can be a several-hour (or even all-day) trip and shoppers may need to 21 | P a g e


“refuel”. Coffee shops and places to sit outdoors are also highly desirable. Public improvements and street furniture should be of a design and quality that reflects the style and personality of the Home Furnishings strategy in your district. WHO ARE THE CUSTOMERS FOR THIS STRATEGY? Virtually every household makes home furnishings purchases from time to time, and at different stages in its life cycle. But the customers most closely identified with home furnishings purchases tend to be:  Younger. This may include recent graduates starting their careers and moving into their first apartment, young couples moving in together, or young families. Younger people are at a life stage when they are acquiring the things they need for living. (By the time people reach their late 30s and 40s, they tend to make fewer home furnishings purchases.) Life changes (such as moving or divorce) can also initiate home furnishings spending. And older individuals may make less frequent but more expensive purchases. For Conway, there may also be a market for college students who are looking for low-cost items that might be found in a used furniture store, re-purposed furniture store, or even at Goodwill or Salvation Army stores, that have low price points.  Homeowners. People who own their homes are likely to make larger investments in furnishing and decorating their homes than renters. This is especially true for “permanent” items, like flooring, appliances, renovations, and the like.  Renters. Renters are more likely to purchase adaptable home furnishings, such as smaller furniture pieces they can take with them when they move. Renters may be acquiring their “first-home” home furnishings, which they will use for a time, but intend to replace in a few years. Price points for a Home Furnishings strategy can cover the entire spectrum from low to high, but prices should be appropriate to the customers and context. A low price point approach would include more used merchandise (e.g., Goodwill) and possibly rental furniture. A strategy at the upper end of the range would skew toward designer furniture and could include artisans and custom furniture makers.

BENEFITS AND TRADE-OFFS A Home Furnishings strategy is often very compatible with traditional business districts, including its natural suitability to historic buildings and its stability as a bricks-and-mortar retail sector. (People still want to touch fabrics, see paint chips, and sit on sofas before they buy them.) For districts early on the revitalization curve (which often have significant vacancies), large and inexpensive space is exactly what furniture stores need. At the same time, while everyone needs to purchase home furnishings products at a few points in their lives (and certain home furnishings products more frequently), this category is not a daily consumer need. A commercial district pursuing a home furnishings strategy will typically have limited offerings in some other categories, such as convenience goods and services (groceries, dry cleaner, etc.), entertainment, or ethnic foods. INFORMATION YOU’LL NEED FOR THIS STRATEGY 22 | P a g e


As mentioned earlier, the important thing about a Catalyst Strategy is to get started. Without undertaking a full market analysis, there are a few market research tasks you should begin now. These include: • Inventory: You will need an inventory of all existing businesses in the district. Home furnishingsrelated businesses should be grouped, and you should create a tally of the approximate size of each strategy-related business (in square feet) and the number of people employed by each business. Include businesses that sell anything associated with the home including home accessories, antique stores, lighting, fabrics, shades, etc., and include non-retail businesses like furniture makers, pest control, pool and hot tub installers, banks who provide mortgages, realtors, contractors, etc. • Customers: You should also assemble current information about the demographic characteristics of regional residents, particularly information about household income, age, household size, ethnicity, number of earners, and education levels (you can get this information from the US Census website and/or from third-party geospatial data providers like ESRI or Claritas). Much of this information has been provided to CDP. Conduct pedestrian and vehicular counts on major blocks or entry points in your district, at key times of day. • Competition: Inventory and map competitive commercial centers in your region or trade area, including malls, shopping centers, and competing downtowns or commercial districts. Articulate how your Home Furnishings strategy is (or can be) differentiated from competing commercial areas. You should also articulate the threats posed by these competing areas. • Potential barriers: Identify potential barriers to pursuing this strategy. Barriers might exist across a range of issues, including economic, regulatory, public perception, physical facilities (e.g., storefront sizes, quality of public spaces, lighting, loading docks), and others. None were identified as part of this visit, but they should be considered.

SAMPLE ACTIVITIES Sample Design activities:  Paint some old wooden chairs bright colors (or build "pallet chairs") and place them throughout the public space to create informal places for people to sit. Encourage people to move or reposition the chairs around the district and then track the movement of the chairs. 

Facilitate home furnishings businesses to place products in other stores throughout the district, such as placing table-top wares in a local restaurant.

Sample Organization activities: • Meet with district property owners do discuss how they would support or participate in the Home Furnishings strategy. • Invite a business owner from the home furnishing niche onto the board or one of the committees. • Reach out to the Realtors Association – brainstorm ways to promote this niche together. • Hold a fundraiser auction off painted chairs, tables, etc. that local artists have done. Sample Promotion activities: • Develop a brand identity that connects home furnishings to the district. A “Home Living” logo that is placed by every business listing on your website that fits that niche. 23 | P a g e


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Stage live window displays, with volunteers living out everyday life in a furniture store's window display (e.g., having a family dinner, or watching a movie on television). This can be done in the spring and during the Christmas holidays. Working with local design professionals, offer home decorating workshops for target customer segments, such as designing for small-apartment living, or designing a new kitchen. Host a “Home Living” special event with displays and vendors on the street, as Spring Home Improvement Expo. See the list of businesses below that may not currently exist in downtown Conway, that could be invited from other parts of the city to participate in an event. Make sure promotion includes the Little Rock area.

Sample Economic Vitality activities: • Provide a description of the Home Furnishings strategy along profiles of target customers to all of the district's businesses. • Open a café within a furniture or home furnishings store. • Offer façade improvement grants specifically to home furnishings businesses. • Assist stores with re-merchandising to help them align more closely with the target customer segments. POTENTIAL PRODUCTS AND SERVICES This list illustrates the range of possible businesses, products, and services that might be part of the Furniture and Home Furnishings/Home Living strategy: • • • • • • • • • • • • • •

Antiques and vintage Appliances Building materials Contractors Designers and architects Fireplace, wood stove, hearth, and grilling retailers Furniture (new, used, and/or for rent) Garden center (plants, not cut flowers) Hardware HVAC contractors (including alternative energy installations, e.g., solar, geothermal) Kitchen equipment and housewares Kitchen and bath remodelers Lighting Mattress store • Paints and wallcoverings • Rugs and carpet • Textiles for bed and bath • Tile stores (floor and wall) • Upholsterers • Used furniture and home furnishings • Window treatments • Wood and laminate flooring

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MEASURING PROGRESS The following tools can be used to track your success in implementing the strategy and in measuring its impact on the commercial district as a whole: •

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Conduct on-street surveys when you implement this strategy – then, conduct surveys one year, three years, and five years later, asking the same questions. Are more people patronizing the district for its home furnishings businesses? Are their impressions and perceptions of the district improving? Your surveys should include questions in four specific categories: o Attitudes and perceptions about the district o Current shopping habits o Additional products and services shoppers would like to be able to buy within the district o Demographic characteristics of those participating in the survey, including home zip code Track trends in the number of square feet of retail space devoted to home furnishings. Ask the owners or managers of a representative sample of home furnishings businesses to keep an informal tally of foot traffic, average transaction amount, and gross sales. Interview the owners and managers at regular intervals and hold an annual focus group with them. Are the numbers increasing? Track the number of changes (in service offerings or product mix) that businesses have made to serve the home furnishings market. Track attendance at any Home Living promotions throughout the year, is it increasing? Choose several intersections or entry points in the district and count the number of people who walk by during 30-minute intervals. Do this at two or three key points in the day (e.g., morning, noon, and evening). Repeat the pedestrian counts at least twice a year, at the same times of day. Are the numbers increasing?

#2: Apparel Many people would like to have more apparel stores in their downtowns and neighborhood commercial districts. In main street surveys, apparel stores are almost always one of the two business categories most frequently requested by residents (restaurants are the other). But, there are some significant challenges to consider. Older commercial districts – particularly downtowns – used to have many apparel stores. However, since the advent of regional shopping malls in the 1950s, apparel stores have disappeared from many downtown districts. When people shop for clothing or shoes, they usually prefer to go somewhere where they will find a group of stores selling similar and complementary merchandise so that they can compare several different brands, styles, and prices before making a purchase. Apparel stores therefore usually work best when they are part of a cluster of stores that sell complementary merchandise and serve customers who are demographically similar. This is why regional shopping malls are anchored by clothing-focused department stores supported by dozens of other clothing, shoe, jewelry, and clothing accessories stores. Because of their large concentrations of apparel-related stores, regional malls are able to capture a very large percentage of regional residents’ apparel purchases.

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Because regional malls dominate the retail apparel industry, they make it very challenging to build a successful concentration of apparel businesses in an older or historic commercial district. The region generally needs to have enough unmet retail market demand to support a cluster of apparel businesses, not just one or two. And, it helps to differentiate the district’s apparel businesses from other apparel offerings within the region – in essence, creating a cluster of apparel businesses that are unique enough that they can, together, function as a regional destination. Fortunately, there are ways in which independently owned main street apparel businesses can differentiate themselves from national apparel chains. While the “Apparel” category might initially seem straightforward, the category actually includes hundreds of product and service lines – uniforms, special clothing sizes, dry cleaning, tailoring services, fabric and sewing notions – that national chains rarely offer and that can therefore provide special opportunities for main street businesses. Independently owned apparel businesses also offer the flexibility of serving customers of varying demographic characteristics, something that is usually difficult for chain retailers to do. WHO ARE THE CUSTOMERS FOR THIS STRATEGY? Everyone buys apparel. That means that is a potential customer. But, rather than trying to target everyone, it’s best to hone in on just a few types of customers. For example, you might choose to focus on the types of customers the district already attracts, or perhaps on a particular age group or income bracket that isn’t being well-served by the region’s current apparel stores. A few things to keep in mind when thinking about who the customers might be for an Apparel strategy for your district: • The majority of clothing purchases are made by women, who shop not only for themselves but who also often shop for their families. Working women (and men) have little time to shop on weekdays, so it will likely be important for businesses to offer evening and weekend hours. • For a variety of reasons (convenience, greater selection, etc.), a growing number of people buy clothes online. With an online storefront, an apparel or apparel-related business can potentially reach customers throughout the country and around the world. So, with a savvy and aggressive business plan, an apparel business may not need to derive all of its sales from local or regional customers. SPECIAL CONSIDERATIONS When people shop for apparel (particularly clothing, shoes, and jewelry), they usually like to visit several stores and compare products and prices before making decisions about what to buy. This has several potential implications: • •

Apparel stores need good street visibility. They also need to be near other apparel stores. So, if possible, try to group apparel-related businesses near one another so that shoppers can see that there are several stores they can visit. When people shop for clothing, they usually spend several hours browsing and comparing products. For this reason, most people shop for clothes during the weekend and, to a lesser extent, during the evening. This means that it is essential that apparel businesses be open on weekends and, ideally, at least one weekday evening. This also means that apparel businesses might have blocks of time on weekdays without much foot traffic. These are ideal times for them to develop and improve other

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sales channels (such as an online storefront, deliveries, and cross-merchandising with other businesses) and to update window and in-store displays. Some businesses in the apparel category function like convenience businesses, such as dry cleaning, shoe repair, and tailoring services. Others, like jewelry and uniform stores, can be regional destinations. But most apparel stores (like clothing and shoe stores) are “comparison” businesses – meaning that shoppers like to visit several stores and compare items before deciding what to buy. The days of downtown department stores are, in most instances, behind us. Department stores now generally prefer to regional shopping mall locations, where they can co-locate with dozens of complementary apparel stores. Apparel stores have widely varying space needs, but they are usually in the 800-2000 square foot range. They rarely need loading docks. More than many other types of stores, apparel stores rely heavily on the quality of their storefront window displays to attract customers.

INFORMATION YOU’LL NEED FOR THIS STRATEGY As mentioned earlier, the important thing about a Catalyst Strategy is to get started. Without undertaking a full market analysis, there are a few market research tasks you should begin now. These include: • Inventory: You will need an inventory of all existing businesses in downtown that fit the Apparel Niche. Included in this category could be the obvious clothing stores (new and almost new, and used), shoes stores, sporting goods, silk screening shops, accessories and jewelry. Businesses should be grouped, and you should create a tally of the approximate size of each strategyrelated business (in square feet) and the number of people employed by each business. • Customers: You should also review current information about the demographic characteristics of regional residents, particularly information about household income, age, household size, ethnicity, number of earners, and education levels (additional information can be gathered from the US Census website and third-party geospatial data from ESRI was provided to CDP as are part of this visit). • Competition: Inventory and map competitive commercial centers in your region or trade area, including malls, shopping centers, and competing downtowns or commercial districts. How do you articulate how your Apparel strategy is (or can be) differentiated from competing commercial areas? You should also articulate the threats posed by these competing areas. • Potential barriers: Identify potential barriers to pursuing this strategy. These may include factors as varied as a misalignment of consumer preferences or a lack of geographic cohesiveness among contributing and businesses. BENEFITS AND TRADE-OFFS An Apparel strategy can be difficult – but, if successful, it can position the district as a regional destination. This could provide many benefits for the district, as people who visit the district’s apparel stores could become customers of other district businesses, as well. There are not many trade-offs involved in an Apparel strategy. The most significant trade-off is that, by serving as a regional destination, apparel stores are likely to generate more automobile traffic and need more parking than some other strategies.

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SAMPLE ACTIVITIES There are activities that CDP can build on to help promote this niche in downtown. Sample Design activities: • Offer visual merchandising and store design workshops and hands-on assistance for apparel-related businesses. Sample Organization activities: • Invite several people who are representative of the types of customers you hope to attract to the district’s apparel stores to serve on a committee or task force to provide guidance and feedback on their shopping, leisure, and entertainment preferences. Sample Promotion activities: • Offer lunchtime and after-work fashion shows featuring merchandise from district apparel stores when new apparel merchandise arrives each season – summer, back-to-school, winter holidays, etc. • Frequent buyer clubs (savings oriented) • Create a pre-Christmas or pre-Valentine’s promotional event specifically for men, to help them shop for the women (or men) in their lives. Sample Economic Vitality activities: • Place maps of the region (mounted on foam board) in the district’s apparel stores. Ask all customers to put a pin in the map indicating where they live. At the end of the two-week period, analyze where your district’s apparel stores’ customers come from. • Identify ideal locations for businesses that might comprise a cluster of apparel shops and apparel service-related businesses, taking into consideration its proximity to any existing apparel-related businesses. Have conversations about the owners of these buildings about the strategy and enlist their support in leasing. POTENTIAL PRODUCTS AND SERVICES This is by no means an exhaustive list, but it illustrates the wide range of businesses, products, and services that might potentially be part of the Apparel strategy: • Alterations • Athletic clothing + shoes • Backpacks and messenger bags • Ballet clothes and shoes • Bathing suits • Belts and belt buckles • Big and tall men’s clothing • Boy Scout/Girl Scout uniforms • Bridal gowns (new and used) Evening gown sales and rentals • Buttons, zippers, and fasteners • Camping and hunting clothes • Construction and trades clothing • Costume sales and rentals • Custom tailoring and dressmaking • Diaper service • Dry cleaning • Consignment clothing 28 | P a g e


• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •        

Costume jewelry Embroidery services Eyeglass frames Fabric, patterns, and sewing notions Furs (new and used) Handbags and purses Hand-knitted sweaters Hats Hemp clothing Infants’ and babies’ clothing, shoes, and clothing accessories Kilts Kimonos and robes Leather goods Lingerie Maternity clothing Medical scrubs Motorcycle wear Neckties Orthopedic shoes Petite women’s clothes Plus-sized women’s clothing Prom gowns (new and used) Religious vestments Safety clothing Scarves Second-hand children’s clothing Shoe repair Sleepwear Square dancing and swing dancing clothes Sunglasses Suspenders Team uniforms Tie-die clothing T-shirts Tuxedo rentals and sales Umbrellas and rain gear Uniform sales and rentals Vintage clothing Vintage and estate jewelry Western wear Winter clothing Women’s business clothing Work boots Wrist watches

#3: Dining and Entertainment 29 | P a g e


THE DINING AND ENTERTAINMENT” STRATEGY IN A NUTSHELL Creating a “Dining and Entertainment” district is, befitting its name, is building on a dining strength and adding more options to keep people downtown, shifting some focus to an evening-oriented strategy. For many districts, this strategy can be complementary to one or more daytime-oriented strategies. (There are some entertainment districts – such as some urban nightclub districts – that have little daytime activity and come alive in the evenings.) A dining and entertainment district usually includes a blend of: • Restaurant dining • Drinking establishments • Music (from small jazz club to larger, more formal performance spaces) • Performing arts • Arts are often part of the mix in an entertainment district, but active engagement (eating, dancing, socializing) is often the primary driver for customers. Dining and Entertainment districts tend to have large trade areas (often regional) and they tend to function as destinations: People may come to the district and then browse restaurant menus to decide where to eat. The district is the draw, rather than an individual business. Dining and Entertainment can sometimes function as a “transitional strategy”, particularly for struggling districts: People may begin to come to the district because it is unknown or seen as off-beat, and that attention may be followed several years later by new residents and additional daytime retail uses. Historic buildings and an “urban” experience (“urban” can simply mean “downtown” in a rural or agricultural area) are often defining characters for Nightlife and Entertainment districts. WHO ARE THE CUSTOMERS FOR THIS STRATEGY? Customers for dining and entertainment districts tend to be younger, though not universally so. (This is particularly true of “club” districts.) They tend to be young couples, singles, young professionals, as well as, college students - and they have disposable income. The customer for this strategy tends to be more adventurous and includes people who are interested in food, whether fine dining or unusual cuisines. It can include urbanites, suburbanites, and rural or small-town residents whose common trait is to seek out an authentic, “urban-feeling” experience. BENEFITS AND TRADE-OFFS Key benefits to an Entertainment and Nightlife strategy include: • Longer business days with economic activity after many other traditional business districts have turned off the lights; • Parking demand at hours complementary to retail and office demand; • Strategy fits well with historic buildings and can make use of some larger spaces; and • Can function as a complement to a daytime-oriented strategy. Trade-offs of this strategy include “quality of life” issues, including noise and drinking. Residents may object to the strategy and it will be particularly important to engage them in considering a nightlife focus. In addition, consumers’ tastes can be fickle, especially when it comes to entertainment districts: A place that is “hot” now may find itself out-of-favor in a few years. SAMPLE ACTIVITIES

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There are many different activities that your organization and its partners might do to successfully implement this strategy. The activities you choose should address problems and opportunities that are specific to your district. Start with activities that are relatively easy, then gradually tackle more challenging ones. Be sure to include activities in all Four Points of the Main Street Approach; this is essential! Depending how you have chosen to organize your Main Street initiative and the resources in your community, projects and activities may be carried out by a single committee, by staff specialists, by a consortium of partner organizations, or by some combination of these. (For more information, see the Technical Bulletin, "[Organizing Your Main Street to Transform Your Community]") Here are some examples: Sample Design activities: • • •

Install improved sidewalk lighting to increase public safety at night. Encourage retailers to create active window displays and to keep their windows lit until very late evening. Install speakers in downtown to add music thru the day and early evening.

Sample Organization activities: • • •

Engage residents before adopting the strategy to make sure they support it and to identify ways to mitigate adverse impacts. Engage owners of entertainment businesses in a regular conversation of “responsible hospitality” so you can address problems quickly and as they arise. Host a food related fundraiser, like a Farm to Table dinner out on the street, a progressive dinner, restaurant week, etc.

Sample Promotion activities: • • • •

Organize a “night market” with food truck vendors, retail pop-ups, and a “beer garden.” Stage a play that takes place on the street or in a store window, at night. Market restaurants year-round through rack cards at hotels, events, etc. Encourage customers to review businesses.

Sample Economic Vitality activities: • Survey evening patrons in order to describe the customer profile and trade area. • Work with a few daytime retail businesses to create pop-up evening businesses within their stores.

POTENTIAL PRODUCTS AND SERVICES While many Dining and Entertainment businesses relate to eating and activities, there is also a place for retail, and especially unique, independent retail. Evening customers often window-shop and may return to patronize retail businesses during the day. Some examples of the types of businesses that support an Dining and Entertainment strategy include 31 | P a g e


• • • • • • • • • • • • • • • • • • •

After-hours restaurants (e.g., for servers) Ballroom dance Bars, taverns, gastropubs Cafes (esp. late night) Dance clubs Entertainment Centers (bowling, pool, pinball, video games within a restaurant) Fast food, take-out food (e.g., to eat while walking) Ice cream Liquor stores Music and jazz clubs Nightclubs Party rental spaces Performance/concert space Pool and billiards Record stores (e.g., vinyl) Restaurants (ethnic to fine dining) Tattoo parlor Theaters (cinema and live) Vintage clothing

MEASURING PROGRESS The following tools can be used to track your success in implementing the strategy and in measuring its impact on the commercial district as a whole: •

• •

• •

Conduct on-street surveys when you implement this strategy – then, conduct surveys one year, three years, and five years later, asking the same questions. Are more people patronizing the district for its entertainment-related businesses? Are their impressions and perceptions of the district improving? Your surveys should include questions in four specific categories: o Attitudes and perceptions about the district o Current shopping habits o Additional products and services shoppers would like to be able to buy within the district o Demographic characteristics of those participating in the survey, including home zip code Track trends in the number of square feet of retail space devoted to dining and entertainment uses. Ask the owners or managers of a representative sample of strategy-related businesses to keep an informal tally of foot traffic, average transaction amount, and gross sales. Interview the owners and managers at regular intervals and hold an annual focus group with them. Are the numbers increasing? Track the number of changes (in business hours, service offerings or product mix) that businesses have made to serve the dining and entertainment market. Choose several intersections or entry points in the district and count the number of people who walk by during 30-minute intervals. Do this at two or three key points in the day (e.g., morning, noon, and evening). Repeat the pedestrian counts at least twice a year, at the same times of day. Are the numbers increasing?

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NEXT STEPS

After you review this report here are some next steps.  The Board should discuss and chose their transformation strategies.  Review current activities and identify which activities fit within the recommended strategies. You may already be doing a lot of work that aligns with the strategies.  Some activities may be part of your core functions that don’t necessary align with the strategies but are important to keep. That is fine as well.  Some activities may not align with the strategies nor are meeting organization goals or serving an important function. It might be time to let them go.  Consider other “partner” organizations and stakeholders and the work they are doing that enhances the strategies. While not the result of SSMS’s efforts, this does represent the leveraging of capacity and resources in support of your strategies, so you definitely want to capture this information.  Develop your written work plans that outline who is responsible, budgets, timelines, etc. Remember to include metrics for each – what defines success as it relates to each strategy? Be as specific as possible.  Remember to take the work plans to the board for approval before beginning any new project or activity.

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