Editor’s Note: This is a guest editorial submitted by Gary Ferguson, Executive Director of the Downtown Ithaca Alliance. It was not written by the Ithaca Voice. Submit guest columns to firstname.lastname@example.org.
America’s retail is in flux and in a big way. We are all participants in this new trend… the changing nature of retail, a trend that has literally grown up with us over the past decade and now threatens to reshape and redefine our communities and our commercial landscape.
National retailers were always considered to be the stable, sure bets of the industry. Today, stalwart retail names are in precarious positions. Macy’s has closed a large percentage of their stores in an effort to stabilize their position. Sears is teetering on the edge, struggling to remain relevant in this world of change.
Gone are Borders Books, The Limited, and the Sports Authority, just to name a few. Brand names like J. Crew, Aeropostale, and Abercrombie & Fitch are all struggling. National chains, in particular, have been bearing the brunt of this changing landscape. Retail attrition at the national level is the highest I’ve ever experienced in my 30 plus years of work.
Driving this change appear to be several factors. First, there is the evolution of the internet and on-line shopping. Back at the turn of the 21 st century the only sector likely to be seriously affected by the internet appeared to be music. The age of CDs and paying retailers for music was fading away as new services such as Pandora entered the scene. A growing internet company named Amazon was making a run at selling on-line books and music. Few of us thought that apparel or footwear, gifts or crafts, could ever be sold on-line.
In the blink of an eye, really in the last decade, everything has changed. These fledgling businesses became their own industry behemoths. As of 2015, on-line sales have expanded to $235 billion as of 2015, according to Forrester Research. By 2020 Forrester predicts of total retail sales grow another 56%.
Amazon and others perfected the science of shipping and returning goods and smart phones have provided the hand held tool to access the world’s goods and services.
Which leads us to the second key factor in this changing retail landscape — the new competitors. Amazon is now the world’s 4th most valuable public company, and the most valuable retailer in the world (it surpassed Walmart in 2015), reaching into every large and small city and town in America. Even Walmart has been affected by the aggressive and strong growth of Amazon.
These new internet engines of the economy have also surged ahead of public policy. Only now are states starting to talk about requiring on-line stores to collect sales tax. I always found it odd that my New York State tax form had a question asking you to voluntarily disclose any on-line untaxed purchases but refrained from any formal requirement for collecting this potentially massive amount of sales tax from on-line merchants.
A third factor affecting the changing retail world is the post-recession economy. The 2008 recession appeared to alter the psyche of the American consumer. The lean times seemed to some retailers to usher in an era of thoughtful austerity. Discretionary items were more carefully chosen and contemplated by the buying public and this cautious approach to consumerism has seemed to linger even to this day.
The net result of these factors converging on the American bricks and mortar marketplace is retail malady… especially at the national level. The casualties are popping up in malls, regional centers, and strip centers across the country.
What will this changing retail world mean to us here in Ithaca?
First, you are likely to see change affect regional malls and strip centers more than downtowns all across America and I believe that scenario will also play out here in Ithaca. At a New York State meeting of the International Council of Shopping Centers earlier this year, keynote speakers noted how malls and strip centers were looking to become more like downtowns.
They identified two major retail development industry trends—to move toward experiential retail and to become more mixed-use in their tenant mix.
Both of these trends are fundamental principles that guide downtown development, especially here in Ithaca. Indeed, it appears that downtowns are better positioned to weather this massive evolution in retailing.
Our independent, mom and pop stores tend to be one-of- a-kind, specializing in goods and services that are not readily found in big box stores that have come to dominate the retail landscape. Our downtown stores often feature goods selected for their quality, again a factor less evident in many big box outlets.
Our downtown stores live by their personal, one-on- one customer service, often by the store owner themselves. These are factors that are more difficult to replicate on-line and certainly more challenging for large big box operations.
In downtowns, mixed-use is a part of our DNA, our urban fabric. It is what we do. A visit to downtown is an experience—hopefully a positive one—but always an experience.
Nationwide, retailers and developers focusing on retail are struggling to re-invent malls and centers as faux downtowns, trying to capture some of the organic interest and excitement that we naturally find and enjoy in our downtowns.
It is not to say that downtowns will not be challenged by this changing retail world—they are and they will. But, I like our opportunities and believe that bricks and mortar retail can find a long term home in our downtowns.
Second, the American consumer, and to localize this issue, the residents of Ithaca and Tompkins County, have to be cognizant and responsive to this changing retail world. We Ithacans love to boast of our lovely and dynamic downtown, to brag that we have a variety of shops and eateries that are locally based. We judge downtown success by the number of storefronts occupied and by the foot traffic we see.
But, the internet makes it so easy to forget that the success and survival of these businesses depends on our patronage and attention.
It would be pollyannish for me to suggest or request that we all forego the internet for our shopping. We know that internet shopping is here to stay and will only get more and more intense. But, we do need to keep in mind that the local businesses we cherish so much need our continued support and attention. Even as we click the send button to purchase on-line, we need remember to make a trip to downtown to support our friends and neighbors whose businesses help define and shape our community.
My thought is this. Every time you buy on-line, make a mental note to make a trip to a local business as well. It can be fun and entertaining- experiential as the ICSC developers call it. But it will also help keep and nurture our local retail and restaurant businesses. In an evolving age when all shopping could probably happen on line, we, the local community, have a responsibility to help maintain our collection of local businesses who are available to serve us in the months and years to come. If we fail to remember this responsibility, we risk losing our local retailers and ultimately reshaping our communities.
The retail world is changing and quickly. Here in downtown we are excited by the challenge and anxious to have us all become guardians of our local “bricks and mortar” retail.