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    The Future of Retail in Downtown Columbus – Part I

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    In November 2009, the Capital Crossroads Special Improvement District announced a new retail incentive program that included the creation of a dedicated Retail Recruiter for Downtown. We spoke with Retail Recruiter Kacey Campbell in February, to find out more about what exactly she’d be working on, and one of the things she mentioned was an information gathering process and retail analysis already underway by Chris Boring of Boulevard Strategies. That report was completed earlier this year, and we recently had the opportunity to sit down with Chris to further discuss the findings in that report and what it could mean for the ongoing retail recruitment efforts of Capital Crossroads.

    (Note: Part 2 of this article can be found on TheMetropreneur.com HERE)

    Walker Evans: Before we start to drill down into specific details, can you give us the “Executive Summary” version of this retail survey?

    Chris Boring: The study has two parts. The first is an update of a study that I did in 2008 that looks at six types of markets that downtown retailers serve. That includes office workers, students, residents that live downtown, residents that live in the adjoining neighborhoods such as German Village, Short North, Bexley, Grandview, Franklinton and the Near East Side, and also visitors, both overnight visitors and people that come down for a variety of other reasons such as the Convention Center, Huntington Park, Nationwide Arena, and County Courthouse. The first part of the study tries to get an arm around how many people fall into those six categories and how much do they spend per year on retail. Briefly put, there are about 100,000 employees downtown, and 75% of those are office workers. Based on research I’ve done relying on a study called “Office Worker Retail Spending Patterns”, which was published by the International Council of Shopping Centers, I was able to figure out about how much office workers spend on retail downtown, which is right around $150million dollars per year. So that’s a pretty big market. In terms of students, we have about 39,000 students in the eastern end of Downtown, which includes Columbus State, CCAD, Franklin University and Capital Law School. That’s the equivalent of a major university and there is almost no retail serving the students.

    WE: To put that number in perspective, that’s pretty close to rivaling the 52,000 students that attend at the main OSU campus.

    CB: Yeah, there is a very significant market there. It’s a market that I’ve had the opportunity to study a little bit closer. One project I did earlier this year in Grove City. They have proposed a Center of Learning, a consortium of about eight colleges and universities in their town center. The largest of which would be Columbus State. What I found when I did a little bit of a deeper study in their market was about 55% of their students are over age 25. Most of them work and a lot of them have families. So they have a little bit more money than your traditional student does, but they have less time. So to me, that screams something along the lines of ‘fast casual’ restaurants and services.

    Another way of serving the student market would be through back to school purchases. Those 39,000 students currently Downtown will spend about $25million dollars a year on back to school merchandise, usually in the month of August. That includes things like backpacks, iPods, laptops, and everything else. With non-traditional students it’s usually not quite as concentrated to August… they might buy some of that merchandise throughout the year.

    Then we have about 5,600 residents in downtown. That growth kind of leveled off over the last couple of years.

    WE: What is the boundary of Downtown for the purpose of this study?

    CB: That would be 670 on the North, I-70 on the south, I-670 on the east, and the Scioto River on the west.

    WE: Do you think that growth leveled off due to the national housing and economic issues?

    CB: Yes, but I think that that’s going to change. I think we are going to see another surge in terms of the housing market. What’s interesting is that non-family households outnumber the family households by two-to-one in Downtown. Over 60% of the households have a pet, but less than 10% have kids. So the pets are the “kids”.

    WE: Does that lead to a demographic that has increased spending power since there is more flexible income without children in the household?

    CB: That’s right. A good example of that would be that those types of households are going to eat out a lot more than couples that have children.

    The full residential population build out according to the 2010 Downtown Strategic Plan would be 22,000 people living Downtown. That’s what Downtown has the capacity to hold. In terms of spending, that is really important because each resident is six times more valuable than an office worker in terms of their concentration of spending. More people are going to spend more in their residential area than they are in their workplace.

    In addition to those 5,600 Downtown residents, we have another 65,000 people living in inner-city communities and suburbs. 13,000 in Bexley, 6,000 in Grandview, 21,000 on the Near East Side, 9,000 in the Short North, 11,000 in Franklinton and 5,000 in German Village. Those residents are all really missing the City Center. That was their retail shopping destination. Even with Tuttle, Polaris and Easton, there is a market there that is lacking a nearby convenient place to shop. I very conservatively have estimated that is a $50million per year retail market. That number only represents 7% of those communities’ total retail spending. Again, I think that is pretty conservative. I know that I personally spend more than 7% of my income Downtown, and I live in the Short North.

    Next, we have an average of 750 overnight visitors in Downtown hotels each night. That’s 250,000 unique visitors per year according to Experience Columbus. That number will increase over the next few years as there are two new Downtown hotels in the pipeline. Right now that is about a $15million per year market. I think it could increase to $20million within a couple of years based on the new hotels being added.

    And lastly, this is probably the hardest part to quantify… all of the people that come Downtown for any other reason. You’re probably not going to get them as heavy shoppers, but you get the exposure. Those are people that will come down for entertainment, sports venues, the convention center, county courthouse, the library, the art museum, COSI, our four theaters which by themselves draw 550,000 patrons per year, the Statehouse, parks, and then all of the festivals and events and parades all draw people. We’ve ball-parked this at about 9million visitors. So that’s another $40million per year retail market.

    So, if you add all of this up, it’s about a $375million potential market for retailers in Downtown Columbus. The problem with that number is that nobody can really get their arms around it. In a way, it’s not really a legitimate number because nearly every retailer in Downtown relies almost entirely upon the pedestrian footprint around their block.

    WE: When you put these figures together and come up with the $375million per year retail market, do you also have a figure of how much of that is already being captured by existing businesses?

    CB: I didn’t break that down for this study, but I think that would be an interesting analysis. What I found in the 2008 study just for Downtown overall, the supply was only at 63% of what demand was. There was 37% of demand not currently being filled. That probably still holds true in 2010.

    WE: You mentioned that some of this large-scale data is difficult for retailers to utilize effectively. How can they get a better grasp on what this information can mean for an individual business?

    CB: Well, what I tried to do with the second part of this study is bring this down to a level where it is relevant to an individual retailer. We took the Capital Crossroads Special Improvement District, which is the center of Downtown, and broke it down into six smaller submarkets.

    The first one is North High Street. Within a quarter mile radius of North High Street between Spring and Broad, there’s almost 60,000 office workers, 10,300 COTA riders which kind of overlaps with the office workers, 200,000 overnight visitors per year, millions of other visitors from the Convention Center and the Arena District, and 1,300 residents. That adds up to a $135million per year retail market. With the help of Kacey Campbell, Marc Conte and Cleve Ricksecker at Capital Crossroads, we’ve done a lot of meticulous research for each of these submarkets to come up with merchandising theme. What we settled on for North High Street was “Convenience and Care”. Cluster together things that people have to do during the weekday. Things like a bank or credit union, a mail packaging company, copy center, dry cleaning, florist, food service and take out, candy, cookies and treats. We also see personal care going into this corridor… things like a pharmacy, cosmetics and fragrances, hair stylists, that sort of thing.

    The next cluster is Gay Street. This is probably the most successful cluster downtown right now. This really started with a study I worked on with Cleve Ricksecker in 2000. We identified that as an opportunity. Sure enough, it has developed as a dynamic entertainment destination for Columbus. We’d like to see that cluster develop as more of the same. That’s what really makes a restaurant row strong is more restaurants. People will typically decide where they are going to go in terms of geography first and then they pick a restaurant within that cluster. We’d like to add more fine dining, maybe another coffee shop, a wine shop, ice cream, things like that. Another idea I had for this corridor is home decor. The reason I think that works well with restaurants, provided they stay open past five o’clock, is that people typically dine out as couples. They also like to shop for things for their home as a couple. So it is good opportunity for browsing. We have plenty of space in Downtown. Sometimes, that can be a constraint for home goods, but not here.

    The third cluster is built around Lynn and Pearl Alleys. This builds off of the Pearl Market that is already there. It has 100 vendors per season. We’d like to find more opportunities for these very small businesses. One thing that Cleve is currently working on is either trying to develop or find small affordable spaces for startup retail. A laundry list of categories would be: cards, gifts and party supplies, health and beauty aids, toys, games and novelties, arts and crafts, jewelry, beads, a lot of the same things you already see at the Pearl Alley Market. And definitely pet accessories.

    The fourth submarket is Capitol Square and that is one block in each direction around Capitol Square. There you have about 45,000 workers. A lot of these are your top executive workers and white collar professionals. I got to thinking about the void that had been left behind by City Center, and I still think there is a fashion void in Downtown. Maybe not enough to support a one-million square foot fashion mall, but I have to think that there is some lingering demand there. I’ve thought about airport retail, which markets to the same segment. I’ve done a lot of work with the Columbus Airport in the past. I call this concept “Executive Concourse”. Fashion accessories such as ties or watches, luggage and travel, mobile electronics, executive gifts, a golf pro shop, books and magazines, things you might see at a big airport in New York or Chicago.

    The fifth submarket is RiverSouth. This is still a blank slate right now in terms of retail. I think one issue there is most of your market is toward the southern part of the RiverSouth District and right now there is not a lot of retail area to serve that market; the vacant space tends to be up toward where City Center was. So I think that’s a challenge, but again you are starting with a blank slate. They just really need things that the rest of Downtown has… things like fast-casual food service, maybe a sports bar and pub, a sit-down restaurant or tavern, ethnic eateries, a convenience cluster, and a retailer could possibly do an office supply store in one of the larger spaces there.

    The last submarket is Third and Main. Probably the smallest one. It is dominated by commuters coming in and out. We’ve tried to think of commuter-friendly retail concepts. Gourmet-to-go, take-n-bake pizza, a convenience market, Chinese take out, a wine shop, upscale car wash, doggie daycare, and other ideas along those lines.

    So that’s a my quick overview of the retail plan.

    Continuing reading the story at TheMetropreneur.com: “The Future of Retail in Downtwon Columbus – Part II“.

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    Walker Evans
    Walker Evanshttps://columbusunderground.com
    Walker Evans is the co-founder of Columbus Underground, along with his wife and business partner Anne Evans. Walker has turned local media into a full time career over the past decade and serves on multiple boards and committees throughout the community.
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