Loading...
HomeMy WebLinkAbout4.b. Retail Strategies Presentation EXECUTIVE SUMMARY Port Authority Meeting Date: July 17, 2018 AGENDA ITEM: Retail Strategies Presentation AGENDA SECTION: New Business PREPARED BY: Kim Lindquist, Deputy Director AGENDA NO. 4.b. ATTACHMENTS: Presentation APPROVED BY: LJM RECOMMENDED ACTION: Information Item ISSUE At the last meeting staff briefly reviewed information from Retail Strategies and indicated that we would receive a more detailed presentation, including information about the ICSC conference. Attached is the presentation received. Staff plans to walk the Port Authority through the presentation at the meeting. RECOMMENDATION Information item only. Retail Recruitment Plan Rosemount, Minnesota 2Prepared for Rosemount_MN by Retail Strategies Why Should a Municipality Invest Resources in Retail? Challenges Goals 3 Why Should a Municipality Invest Resources in Retail? Prepared for Rosemount_MN by Retail Strategies Success breeds success. Retail builds on retail. Retail economic impact adds up quickly. Retail attracts the workforce that attracts the primary jobs. Retail influences executives looking to locate their company in your community. Retail enhances quality of life that brings your children home. Retail builds tax base. Retail adds jobs from entry level to managerial. Retail builds communities. 4 Why Should a Municipality Invest Resources in Retail? Prepared for Rosemount_MN by Retail Strategies rise of the millennial 7 Technology Changing Growth of Brick-and-Mortar Prepared for Rosemount_MN by Retail Strategies 8 Doom and Gloom? Prepared for Rosemount_MN by Retail Strategies 9 Seamless Integration is the Key to Survival OMNI CHANNEL Experience Shopping Bricks E-commerce Clicks Prepared for Rosemount_MN by Retail Strategies 10 Returns –The Gift That Keeps on Giving US RETAIL SALES ON TRACK TO REACH $4.0 TRILLION IN 2017 9/100 IN-STORE PURCHASES ARE RETURNED IN 2017, PROJECTED US ECOMMERCE SALES WILL REACH $440 BILLION TOTAL RETAIL RETURNS IN 2017 PROJECTED TO EXCEED $460 BILLION 30/100 ONLINE PURCHASES ARE RETURNED 70-80% OF SHOPPERS MAKING ONLINE- PURCHASES RETURNED TO STORE TO ALSO MAKE A NEW PURCHASE Prepared for Dubuque_IA by Retail StrategiesPrepared for Rosemount_MN by Retail Strategies 11 Brick-and-Mortar Still Dominate Prepared for Rosemount_MN by Retail Strategies 12 Retailers Are Still Expanding Prepared for Rosemount_MN by Retail Strategies 13 2017 Store Openings Retailers Opened 42,000 Stores in 2017 Tenant mixes are becoming increasingly food-based. Specialty food —fast casual & organic grocery are becoming mainstream. Fitness/Health/Spa Concepts Thrift Stores Grocery (Smaller Format) •Discount •Ethnic •Organic •Upscale Fast Food Fast Casual (~40% of restaurant growth) Retail Growth Automotive Discounters Dollar Stores Children’s Apparel Off-Price Apparel Beauty/Cosmetics/Fragrances Pet Supplies Sporting Goods Wireless Stores Banks Retail Contraction Book stores Video Stores Do-It-Yourself Home Stores Mid-priced Apparel Mid-priced Grocery Office Supplies Consumer Electronics Stationery/Gift Shops Shipping/Postal Stores Casual Dining –Older Concepts Prepared for Rosemount_MN by Retail Strategies 14 2018 Planned Expansion 16,500 14,950 2,300 1,800 1,400 750 450 Restaurant Other Apparel Dollar Store Home Grocery Drug Store Prepared for Rosemount_MN by Retail Strategies 15 Retail Strategies Overview We are retail real estate professionals. We will tell your story in a way that matters to retailers. 20 Licensed Retail Real Estate Professionals 34 Team Members 130 Communities Served 4:1 Client to Staff Ratio 44 States Our Team has Located Retailers 1 Goal Create Success for Our Clients Prepared for Rosemount_MN by Retail Strategies 16 Our Partnership Beth Miller Portfolio Director Prepared for Rosemount_MN by Retail Strategies Ford Fitts Retail Development Coordinator Justin Lindsey Business Development Our Partnership Executive Team Accounting Prepared for Rosemount_MN by Retail Strategies Marketing & Research 18 Retail Strategies Process Prepared for Rosemount_MN by Retail Strategies Market analysis-Data, Data, Data We start where the retailers and landlords start.A retail site will only be chosen if it meets all of a retailers’key criteria.This criteria is two fold: market criteria and site criteria.Each retailer has its own formula for determining what market characteristics are needed to allow for a profitable store.Which is why this first step is central to formulating an effective retail recruitment strategy.Through our comprehensive market analysis process we have evaluated,consumer spending patterns,peer communities,local commercial real estate asset,as well as the demographic and psychographic make-up of your unique consumer trade area.Our partnerships with pioneering data organizations allow us to provide the deepest,most accurate,insight into your community and its consumers to retailers and landlords across the country. Strategic Planning –The Playbook Every community offers unique assets and challenges to retailers and developers.Taking the market analysis a step further we have sent a experienced retail real estate team to Huron to view the market first hand as a retail site selector would (Boots on the Ground).Then through connecting with local city leadership and key stakeholders in Huron’s commercial real estate sector we gain the insight and feedback necessary to access the markets strengths and weaknesses.Many times what the data shows is incomplete.Other critical factors such as co-tenancy,sight lines, access and most notable success of existing retail are taken in to account in creating your strategic retail recruitment plan. Retail Recruitment-Connecting The Dots This is where the real heavy lifting begins as we put the data and underutilized real estate assets to work by connecting them with targeted businesses.Retail recruitment is a complex business and involves multiple parties.Our team has National connections that we will put to work on your behalf.We currently know who to contact,their expansion plans,and their site criteria for over 9000 retailers nationwide. Time Resources Experience Connections Your Research 20 Research Partners & Geographic Information Systems Memberships, Subscriptions & Customized Reports Discover: Research Prepared for Rosemount_MN by Retail Strategies 21 where does all this information come from? here are a few of the demographic data sources used Discover: Research Prepared for Rosemount_MN by Retail Strategies 22 9,703 retailers’contact information & site selection criteria Discover: Research Prepared for Rosemount_MN by Retail Strategies 23 3,365 unique variables 7 different geographies defined per each variable 87 category specific reports 23,555 variables to analyze Discover: Research Prepared for Rosemount_MN by Retail Strategies 24 Discover State of Minnesota Population 5.58 Million Rosemount, MN Population 23,728 Prepared for Rosemount_MN by Retail Strategies 25Prepared for Rosemount_MN by Retail Strategies Discover 26 Discover: Drive Time & Radius Prepared for Rosemount_MN by Retail Strategies * Demographics pulled from city center as identified by internal GIS Category 1-Mile Radius 3-Mile Radius 5-Mile Radius 5-Minute Drive Time 7-Minute Drive Time 10-Minute Drive Time Current Year Estimated Population 29,100 55,428 122,895 8,047 38,178 110,985 Number of Households 10,485 20,325 43,140 3,161 13,718 39,526 Projected Annual Growth (5 YR)6.66%7.22%6.63%7.19%6.96%6.46% Median HH Income 2016 $87,488 $88,164 $90,628 $75,955 $92,498 $91,463 Current Year Average Age 36.9 36.6 36.8 37 37.2 37 Average Home Value $307,279 $309,449 $325,734 $280,615 $327,871 $329,450 Current Year % Bachelor's Degree 43%44%42%34%46%44% Daytime Population 21,104 43,235 88,666 10,065 31,211 79,435 Labor Force 17,211 33,109 74,273 4,704 22,720 67,212 27 Discover Mobile Data Collection The location tracked was Aldi and Cub for the time period of March 31, 2017 To March 31, 2018 Prepared for Rosemount_MN by Retail Strategies This mobile tracking service uses data collected from mobile phone users who have agreed within their apps and phone settings to enable location information.By drawing a polygon around a specific business or location we are able to gather valuable data about the customer base that has actively used their mobile device while in the identified location.This tool allows us to see where customers are coming from to shop in your market using actual data.This information is used to optimize your trade area, analyze business locations,compare frequency of visitors,and assist retailers in site selection.This is intended to support the trade area but does not solely define the trade area. 28 Customized Trade Area Discover: Custom Trade Area Prepared for Rosemount_MN by Retail Strategies Each retailer has a specific formula of market criteria they use to determine if they will have a profitable store.Understanding your trade area is extremely important because it sets the parameters for measuring demographic criteria and spending potential sought by retailers and developers.Municipal boundaries,radius rings and drive times are a start to evaluating this information.However,these predefined boundaries are unable to take into account the unique aspects affecting the actual consumer pulling power and local geography of your community.For these reasons a customized trade area is the next step to analyzing a market. A trade area is the geographic area from which a community generates the majority of its customers.A community can have more than one trade area.We define your primary trade area the core base of consumers highly likely to shop and eat in the market at least once a month.Your primary trade area has been created by combining the results from the mobile tracking data with other factors such as:current retail mix in your community,traffic patterns,destination attractions and proximity to competing markets. The time and distance consumers are will to travel to shop is not “one size fits all”.Therefore retailers will analyze their own trade areas differently taking in to account things like existing store locations, competition within their retail category,and convenience. 29 Our Research Prepared for Rosemount_MN by Retail Strategies 201,049 2017 Estimated Population Custom Trade Area Discover: Custom Trade Area 39 female average age 37 male average age 5.1% projected growth rate 2017-2022 211,359 projected 2022 population 30 5% 4% 5% 83% 3% Race Asian Black Latino White Other Our ResearchDiscover: Custom Trade Area Prepared for Rosemount_MN by Retail Strategies CURRENT YEAR ESTIMATED POPULATION BY RACE 31 Our Research Prepared for Rosemount_MN by Retail Strategies Discover: Custom Trade Area 78,032 number of households $83,006 median household income CURRENT YEAR ESTIMATED HOUSEHOLDS BY HOUSEHOLD SIZE 16,930 24,337 13,088 13,051 5,305 1,678 785 23%32%17%17%7%2%1% 1-person household 2-person household 3-person household 4-person household 5-person household 6-person household 7 or more person household 32 Our Research Prepared for Rosemount_MN by Retail Strategies Discover: Custom Trade Area $331,881 average housing unit value CURRENT YEAR ESTIMATED HOUSING UNITS BY TENTURE 2,858 75,174 59,552 15,622 Vacant Housing Units Occupied Housing Units Owner-Occupied Renter-Occupied 33 Our Research Prepared for Rosemount_MN by Retail Strategies Discover: Custom Trade Area 2.66 people per household 23% 72% 58% 27% 30% 4% 2% 2% 10% 6% 4% 6% 1 Person Households Family Households Married-couple family With own children under 18 years No own children under 18 years Male Householder: no wife present: With own children under 18 years No own children under 18 years Female Householder: no husband present: With own children under 18 years No own children under 18 years Nonfamily Households 34 Our Research Discover: Custom Trade Area 218,969 daytime population Prepared for Rosemount_MN by Retail Strategies 4%9%6%3%47%2%29% DAYTIME POPULATION Children at home Retired/Disable persons Homemakers Work at Home Employed Unemployed Student Populations 35 Discover: Research & Analytics Prepared for Rosemount_MN by Retail Strategies 36 ESRI Tapestry SegmentationOur ResearchDiscover: Psychographic Profile Prepared for Rosemount_MN by Retail Strategies TAPESTRY HOUSEHOLD SEGMENTATION AREA PROFILE 5 mile Radius –Aldi, Rosemount, MN 25.8% 14.9% 11.8%11.3% 8.5% Soccer Moms (4A) Professional Pride (1B) Savvy Suburbanites (1D) Home Improvement (4B) Boomburbs (1C) 37 ESRI Tapestry SegmentationOur ResearchDiscover: Psychographic Profile Prepared for Rosemount_MN by Retail Strategies 38 ESRI Tapestry SegmentationOur ResearchDiscover: Psychographic Profile Prepared for Rosemount_MN by Retail Strategies Focus Categories 40 Discover: Opportunity Gap Total Market Leakage -$705,132,330 Prepared for Rosemount_MN by Retail Strategies This number shows that supply Is actually higher than demand. This is common in suburbs of very large cities. Finding the specific categories where they are leaving the market is the key. 41 Discover: Opportunity Gap Prepared for Rosemount_MN by Retail Strategies CUSTOMIZED RETAIL CATEGORY GAP ANALYSIS Data Source: STI: Market Outlook $17,117,035 $35,034,432 $67,338,475 $110,349,363 Electronic Shopping & Mail-Order Houses Sporting Goods, Hobby, Book, Music Stores Foodservice and Drinking Places Clothing & Clothing Accessories Stores 42 Discover: Peer Analysis Prepared for Rosemount_MN by Retail Strategies Address City State Residential Pop Daytime Pop Median HH Income Market Supply Dollar Tree Rosemount MN 54,604 41,767 $88,074 $483,764,319 5000 Chandler Ct Marion IA 51,628 46,807 $68,447 $959,231,172 1974 Vandalia St Collinsville IL 49,270 42,066 $63,070 $481,745,273 4400 W Elm St Mchenry IL 44,559 45,898 $67,421 $612,616,068 701 8th St Sw Altoona IA 56,659 43,094 $64,822 $718,250,875 66078 Van Dyke Rd Washington MI 48,636 41,583 $80,507 $645,218,187 1430 S Lapeer Rd Oxford MI 43,738 40,758 $79,788 $737,731,935 City Comparison Report –10 Minute Drive Time 43 Discover: Peer Analysis Prepared for Rosemount_MN by Retail Strategies 0 9 1 6 1 4 1 4 1 2 21 0 0 1 12 5 16 4 6 3 5 2 4 26 1 1 Arts & Entertainment Automotive Clothing & Accessories Computer & Electronics Full Service Restaurants General Merchandise Grocery & Supermarket Hardware & Garden Hobbies & Crafts Home Furnishing Quick Service Restaurants Shopping Sports & Recreation PEER ANALYSIS BY CATEGORY Rosemount Peer Average Boots on the Ground 45 Current Retail Overview Prepared for Rosemount_MN by Retail Strategies Current Real Estate Overview Retail Prospects 47 Discover: Top Categories for Recruitment Prepared for Rosemount_MN by Retail Strategies General MerchandiseRestaurants Building Supplies & Hardware Clothing and Apparel Outreach 49 Connect Prepared for Rosemount_MN by Retail Strategies 50 Conference Representation Retail Strategies represents our Client Communities at more than a dozen Retail Real Estate Conferences Each Year. At each conference we connect directly with industry leaders to discuss our Client Communities and position them for growth. Prepared for Rosemount_MN by Retail Strategies 51 Marketing Guide Prepared for Rosemount_MN by Retail Strategies Implementing your Strategy Contact developers, retailers, tenant representatives and franchisee groups both regionally and nationally Make direct and indirect connections through conference representation, in person meetings, phone calls and emails Coordinate and communicate our efforts with local brokers, property owners, and city staff on an on going basis Follow industry trends as well as changes in your local market to continuously adjust our strategy and improve our efforts to maximize the retail potential in your community Discover Connect Implement Focus Prepared for Rosemount_MN by Retail Strategies 120 18th Street South, Suite 120, Birmingham, AL 35233 205.314.0386 retailstrategies.com Thank you!