OPERATIONS

Urban Land Institute looks at retail development challenges in lower-income areas

BY Marianne Wilson

Washington, D.C. — Site and market challenges, underwriting challenges, and operational challenges are the key factors that hamper retail development in some lower-income communities, according to a report from the Urban Land Institute.

The report, Retail in Underserved Communities, defines underserved communities as those that fall into one or more of four categories: urban locations lacking businesses, underserviced markets, locations without cultural offerings, and isolated rural or small towns.

“Although several causes are often identified as common to underserved markets, the essence of the problem is most often weak market conditions,” stated the report. “The creation of a local economy where investors, property owners, the government and retailers make market-rate decisions and obtain satisfactory returns on investment is critical to success.”

The report defines the factors hampering development as:

• Site and market challenges, including site availability and land assembly; lengthy local approval processes; difficulty matching a retailer to the market; and inaccurate or insufficient market information (such as understated household income for the area).

• Underwriting challenges resulting from lenders’ unwillingness to make loans in areas perceived as risky and unlikely prospects for additional investment and development.

• To overcome these obstacles, the report suggests using unconventional approaches to “pitch” the sites to retailers and the provision of financial incentives to retailers. It also suggests that a project be presented as contributing to a place making endeavor to benefit the community.

• In addition, it notes that non-traditional financing sources and tools should be explored.

• Operational challenges, including store size limitations that could inhibit its ability to create a critical mass; distribution and delivery challenges due to narrower streets; unreliable internet service that prevents the integration of online shopping and in-store pick-up service; national anchor store losses; inadequate employee training services; and the perception of the neighborhoods as high-crime areas.

The report, which focuses primarily on urban underserved markets, includes case studies of the East Liberty neighborhood of Pittsburgh; Union Market in Washington, D.C.; and Old Spanish Trail in Houston, exploring how retail development sparked revitalization efforts that are ongoing in each of these areas.

Among the lessons learned from the three case studies:

• Sustained leadership is essential to keep a project on track to completion.

• A “bridge” location that reaches low- and high-income populations is a plus.

• Sharing risk between the private and public sector helps ensure prospects for success.

• Public sector commitments to maintain and improve infrastructure in the area are critical.

• Focus on managing growth, rather than stemming decline or protecting the status quo.

• Capture the land value after the project is completed.

• Focusing on food responds to the national emphasis on providing healthier eating choices in underserved neighborhoods.

• The dense layout of urban underserved communities is conducive to mixed-use projects that include residential space on top of a variety of retail and commercial space.

• Retail development provides prime employment opportunities for the unemployed and under-employed, as well as opportunities for new entrepreneurs to enter the area.

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MARKETING/SOCIAL MEDIA

Hhgregg ranks highest among appliance retailer websites

BY Marianne Wilson

Westlake Village, Calif. — Hhgregg ranks highest among appliance retailer websites, with a score of 865, up by a significant 41 points from 2013, according to the J.D. Power 2014 Appliance Shopper Website Evaluation Study. The improvement is attributed to an increase in the speed of the website, up 63 points to 875, and a redesign of the website review section to include the highest and lowest customer appliance ratings at the top of the site. Following Hhgregg in the rankings are The Home Depot (842) and Best Buy and Lowe’s in a tie (839).

Now in its second year, the study evaluates the usability of appliance brand and retailer websites based on four factors that comprise the overall service experience (in order of importance): information/content; navigation; appearance; speed. Satisfaction is calculated on a 1,000-point scale.

Overall satisfaction with appliance brand websites is higher when shoppers access a website using a desktop/laptop (809) vs. a smartphone (796) or tablet (799). In contrast, satisfaction with retailer websites is higher when accessed using a tablet (831), compared with a desktop/laptop (827) or smartphone (810).

In other findings:

• The incidence of using a smartphone or tablet to research information online has increased to 26%, up from 20% in 2013.

• More than three-fourths (76%) of shoppers indicate retailer websites are highly useful when shopping for appliances.

• Among smartphone/tablet owners, 57% access online content while at a physical store location.

• Seven-in-eight retailer websites employ a dedicated mobile website for smartphone users, while tablet users are directed primarily to the desktop/laptop website. Only one retailer, The Home Depot, directs tablet users to a tablet-specific site.

"Often, brand websites are considered a trusted place for consumers to begin their research process when shopping for an appliance; however, the sites don’t always emphasize the importance of product reviews," said Dan Lawlor, director of research operations at J.D. Power. "Retailer websites focus less on features and add-ons but highlight product reviews. Brands are missing a great opportunity to satisfy customers by highlighting the relevant product reviews in addition to product, model and feature information.

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OPERATIONS

EPA honors Raley’s for GreenChill Partnership

BY Marianne Wilson

West Sacramento, Calif. — The U.S. Environmental Protection Agency’s GreenChill Partnership announced that Raley’s Family of Fine Stores received a GreenChill 2013 Achievement Award for extraordinary leadership and initiative in achieving the Partnership’s mission to better protect the Earth’s ozone layer and reduce the impact on climate change through innovative refrigeration systems. As a recipient of the 2013-2014 Distinguished Supermarket Partner, Raley’s was recognized for its accomplishments in the last year at the FMI Energy & Store Development Conference in St. Louis, Missouri.

Raley’s joined the EPA’s GreenChill Partnership in 2009 and has voluntarily reduced its emissions rate by over 10% over the last five years.

Raley’s GreenChill pilot store, located in Petaluma, California, was the first in the state and just second in the nation to receive GreenChill Gold Level Certification for innovative refrigeration technology. It also received special GreenChill recognition last year for maintaining its GreenChill certification for five consecutive years.

In addition to reducing refrigerant emissions, Raley’s invests in upgrading and modernizing its refrigeration systems to reduce energy loss. The company installed night blankets on refrigerators at each store to limit energy loss during the night hours when the stores are closed.

In 2014, 25 Raley’s stores have no reported leaks and 43 stores are under 9% refrigerant emissions rates, compared to the estimated national emissions rate of 25%.

“Over the past year, Raley’s has proven itself a true leader for the GreenChill Program,” said Tom Land, GreenChill program manager. “Raley’s earned GreenChill’s Distinguished Partner Award for openly sharing their detailed procedures and costs in determining the exact amount of refrigerant installed in a handful of stores.

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