Best Practices in Retail Economic Development

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Best Practices in Retail Economic Development
Training and Professional Development2006
Annual Conference August 23, 2006
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• Interactive Interview
• With
• The Honorable Ginny Handorf

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About Buxton

• Named Fast Companys 2005 Fast 50
• Customer research firm specializing in retail
  site selection
• Analyzed virtually every type of retail concept
• Billions of square feet of analysis in 2005
• Over 1,100 clients including retailers,
  developers and communities

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Some of Our Clients
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• that consumer quality of life in terms of the
  availability of amenities such as shopping and
  restaurants, is just as important as quality of
  life related to natural amenities.

-Dr. Edward Malecki Center of Urban and Regional
Analysis
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Buxton Community Survey
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• 80 Consider their community to be underserved by
  retail.

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Why Underserved?

• 37 Too close to retailers in other cities
• 30 Low population density
• 29 Unable to attract developers
• 22 Never actively pursued retail
• 16 Lack of suitable sites for retail
• 8 Insufficient infrastructure

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You May Be Underserved Because
Retailers

• Focus on established growth areas
• Best site is selected rather than best trade area
• Outdated data sources dont show current
  potential
• Sites and communities inventoried as far out as
  five years
• You are not on the radar screen

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Why Do You Want More Retail?

• 80 Satisfy citizens desire to shop at home
• 72 Increased sales tax revenues
• 70 Better quality of life
• 49 Stop leakage

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• 59 of communities surveyed responded that yes,
  they have offered incentives

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Types of Incentives Offered?

• 33 Infrastructure assistance
• 21 Tax Increment Finance District
• 20 Tax exemptions or abatements
• 19 Grants
• 18 Sales tax rebates
• 16 Loans or loan guarantees
• 15 Tax credits

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Retailer Wish List

• Target
• Trader Joes
• Lowes
• Best Buy
• Kohls

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Restaurant Wish List

• Red Lobster
• Applebees
• Outback Steakhouse
• Olive Garden
• Chilis

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Retail Industry Trends that
Impact Communities

• Malls face difficulties
• Free-Standing retail growing
• Small grocers (chains) struggling
• Super corner stores emerging
• Small scale concepts for downtowns
• Increased demand for infill projects
• Aggressive expansion for wholesale clubs
• Space requirements driving trends

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Restaurant Industry Trends that
Impact Communities

• Large restaurant chains captured more market
  share than independents
• Health-Conscious diners prefer salads, seafood,
  chicken and bottled water
• Quick service (fast food) growth slowed as
  consolidation increases
• Fast casual concepts increasing
• Look for growth from niche retailers

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Five Retail Trends That May Impact You

• Site/City Classifications
• Micropolitan Census Designation
• Super Convenience Stores
• Smaller Scale Concepts
• Town Centers

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Micropolitan Pinetop Lakeside, AZ Cities
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Site/City Classifications
SPSF A. Metro Area 400 B. Large
Non-Metro 300 to 400 C. Small City
250- D. Weak Area 100
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Who Initiates Retail Projects?

• TRADITIONALLY-
• Developers
• Land Owners
• Retailers
• TODAY-
• Communities

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Creating a High Performance Marketing Message
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Case Study Camp Verde

• Challenge
• Understanding the appropriate national retail mix
  in three distinct areas within the community to
  supplement existing retail
• Desired Results
• More detailed understanding of customers in trade
  area and identifying available customers within
  the specified trade areas
• Executable answers regarding specific retailers
  that located in similar trade areas

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Define Your Trade Area
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2000 Highway 260 Proposed Retail Site
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2000 Highway 260 - 15 min Drive Time
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Identify Your Customers
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Using Data to Identify Customers

• Segmentation
• Credit Card
• Surveys
• Reward Cards
• Subscriptions
• Mail Order
• Warranty Cards
• Motor Vehicle Information
• Telechecks

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Segmentation
All U.S. households fall into 1 of 66
psychographic segments
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2000 Highway 260
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Lifestyles
Psychographics focus on Customer Lifestyles
Segment 32 New Homesteaders
Young, middle-class families Own homes in small
townships Dual-income white-collar, service jobs
Child-centered lifestyles Own campers, boats,
PlayStations
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Purchase Behaviors

• Psychographics focus on
• Customer Lifestyles
• Purchasing Behavior

Segment 32 New Homesteaders
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Match Your Customers to Retailers
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Site Profile Comparison
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XYZ Restaurant Profile
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