design:retail - July 2017 - 46
shopping with paco
CEO & FOUNDER
HE WEST END of New York's
Bleecker Street is awash in
vacancy signs. Just three
years ago, it was the hottest retail real estate in the
city. Small storefronts in elegant late
19th-century buildings attracted highend designer brands from around the
world willing to pay major league rents.
There were four Marc Jacobs stores
within 600 ft., now gone. Ralph Lauren,
Mulberry and Brooks Brothers have all
come and gone. The Christofle store, Club
Monaco and Burberry remain, but the
burnish to that end of Bleecker has disappeared thanks to so-so sales, looky-loos
and changing times.
The brands were focused on the tourist traffic
attracted to the "Sex and the City" steps and the
ogling of aspirational housing. Where else can you
get close to homes with eight-figure price points?
For residents, the presence of a NARS cosmetic
store around the corner did not fulfill a pressing
need. When the luxury retail invasion started
10 years ago, neighborhood residents mourned
the passing of local convenience stores, small
Chinese take-outs and Latin bodegas, much less
the laundromats that morphed into Kate Spades.
Now, those same residents are looking at empty
windows and for-rent notices.
Across North America and Europe, we have
charming, often-historic districts with small shops
living under residential spaces. What happens to
those spaces? Ownership of those buildings tends
to be local. Historically, the people who lived
above the store made up a percentage of customers. While districts evolved into centers of gravity
where the density of like merchants and services
created enough of a pull to draw customers from
the broader community or, in some cases, national
audiences, the original premise is neighborhood
businesses are servicing neighbors with goods and
services they need.
No one can look at Walmart or Kroger and
accuse them of killing downtown retail. Our access
to basic commodities has been redefined over the
past hundred years. Small retail is not where we
buy laundry soap or kitty litter. Even in downtown
Bentonville, Ark., where Walton's Five and Dime has
been carefully archived, the near-term answer has
been arty and crafty, whether goods or nourishment.
In small- and medium-sized cities, the nascent reinvention of small storefronts has been to get local. For
those building owners, finding anyone willing to pay
rent is a blessing. Visit Brooklyn's Fort Greene and
Williamsburg, and you see street art and artisanal
standalone shops and restaurants. For every 30 independent shops, only one is national retail.
One of the terms tossed around in contemporary
retail real estate has been "placemarking." The idea
was that a merchant or marketers pulled money
out of print and broadcast media and invested in a
physical asset. The space operated without the same
constraints of profit and loss of a restaurant or shop,
but served as a brand statement or brand inoculator.
The problem is that placemarkers tend to get stale
(as Marc Jacobs may have discovered) if
their leases are years, not weeks or months.
In Times Square in New York, Oxford
Street in London, Via Monte Napoleone in
Milan, placemarking works; in mainstream
downtowns, however, it is misapplied.
Small retail services, from banks and
real estate offices to hair salons, may still be
part of the mix, but no one would cast them
as traffic-drivers. I spent an evening with
the progressive mayor of Porto, Portugal,
and kicked around the small-shop retail
problem. Through the 1940s, when Porto
was a port, the inner city was occupied by
all the various classes that made the port
work, from customs brokers to sailors.
Some of the ground-floor and first-story spaces
were offices; the dynamics of working and living
were intertwined. Someone could live and work
and leave their respective section of the city only on
Today on Bleecker Street, like many parts of
Porto, the traffic is tourists. Many are willing to step
into quaint shops, but are reluctant to buy anything they have to carry. How many art galleries
and souvenir shops can you support, and what
kind of rent can they afford? We had several
suggestions: tax abatements to small landlords for
service-related business; syndicated delivery services, meaning if you see and buy something you
like, it can be delivered to your hotel; and store
locations designed for pop-ups and seasonal promotional activities.
The term we coined was "Aero-Porto," the migration from city spaces driven by access to the sea
to ones with active runways. Pun intended.
PACO UNDERHILL IS THE FOUNDER OF ENVIROSELL AND AUTHOR OF
THE BOOKS "WHY WE BUY" AND "WHAT WOMEN WANT." HE SHARES
HIS RETAIL AND CONSUMER INSIGHTS WITH DESIGN:RETAIL IN THIS
Photo by PACO UNDERHILL