Virtual to Visceral

Online retail sales continue to increase – both in absolute terms and as a percentage of total retail sales. The fact remains, however, that online commerce takes place in what is essentially a one-dimensional transactional venue.



A shopper has in mind buying a shirt or a pair of pants. She goes to her favorite store’s website and makes the purchase. Done. Aside from a handful of truly well-executed omnichannel strategies from select retailers, online shopping can be compared to a brief hop-on-hop-off tour of New York City or London: it gets the job done, but some essential parts of the experience get lost in the process. As a result, retailers have shifted to a more hands-on approach, launching brick-and-mortar concepts that capture sensory experiences.



What is happening in retail is also happening in hospitality: a behavioral shift from transactional to experiential; from the virtual to the visceral. As perspectives evolve across the hospitality sector, a new and expanded set of criteria is providing prime qualitative data for site selection and opening up memorable and intriguing new possibilities.



Consider the following neighborhoods, which either already have a robust hospitality presence or seem primed to accommodate such an influx:



• Abbot Kinney Boulevard and Venice, California – an area known for Venice Beach, but also a vibrant artisan and foodie community anchored by the Abbot Kinney Marketplace. It is no coincidence that there are, at the time of this writing, 217 home-rentals through Airbnb on and around Abbot Kinney Boulevard and Venice Beach. A number of boutique hotels dot this pedestrian-friendly area, including the Hotel Erwin and the Inn at Venice Beach. And the landscape is abundant in unique restaurants that serve seasonally sourced meals such as South End and The Tasting Kitchen. This is a perfect habitat for a Warby Parker store, which also includes TOMS flagship store, a Robert Graham store, Timbuk2, and many upscale local retail boutiques. Now, I can always buy a new shirt through Robert Graham’s website. But, it’s far more interesting–and far more memorable – to go into the store and experience the vibe that is Abbot Kinney Boulevard in the process.



• A Bonobos fitting store is situated in a similar ecosystem along West Armitage Avenue in the North Chicago neighborhood of Lincoln Park. This is one of the most sought after Chicago neighborhoods. Lincoln Park itself is the most obvious draw – including public amenities like the zoo, natural history museum and cultural center–but proximity to the scenic Lake Michigan shoreline brings additional appeal. Villa D’ Citta is a nearby bed and breakfast located in a Tuscan-style villa built in 1897. This is one of the few hotels in Lincoln Park proper, as the primary hospitality concentration is further south along North Michigan Avenue. Butcher & The Burger, Summer House and Fuh are nearby restaurants that appeal to the mostly millennial crowd. Lincoln Park would be a strong trade area candidate for opening a boutique-style hotel under a quality brand as an adaptive reuse project closer to DePaul University and along W. Armitage or N. Halsted Avenue. For example, a Hyatt House or an AC Hotel by Marriott (similar to the property in the Kansas City – Westport area).



The reality is that urban hospitality concepts and upscale retail boutiques go hand-in-hand. They benefit from the same environments, and they complement each other in a host of different ways. In fact, the interrelationship between the two segments helps to create the experiences that draw people in (and bring people back) to a given location. Consumers will return over and over again to places that left an indelible impression. They come back to shop, to eat, or simply to visit–some even move into the neighborhood and find themselves walking or biking to work.



Here’s a thought for hoteliers: consider taking further advantage of that interrelationship with retail – and of the experiential power of memorable places and spaces – to the next level with smaller boutique-style hotels located above a chic, ground-level retail boutique like Fabletica, Birch Box, Bonobos, Robert Graham, etc.



For property developers, it makes sense to explore the adaptive reuse of historic buildings along or near streets like W. Armitage or Abbot Kinney. There are opportunities out there to execute unique and successful projects like the new 67-room Charmant Hotel that recently opened in La Crosse, Wisconsin. The brick building that houses the boutique hotel was built in 1898, and is the former headquarter of the Joseph B. Funke Candy Company. Even in cases where a hotel is not a good fit, there may be potential to repurpose historic or interesting buildings into urban hip residential units or perhaps a small-footprint creative office space for tech-startups and entrepreneurs. The potential to connect with guests or shoppers on a visceral level – enhancing your brand and your bottom line in the process – is simply too good to ignore.

Jerry Hoffman, president and CEO of Hoffman Strategy Group, brings 30 years of economic and market analysis that provides insights for all pieces of mixed-use projects. Core project specialties include urban retail corridors, infill, and suburban mixed-use as well as shopping center repurposing and redevelopment, entertainment district development, university-led development, and adaptive reuse of property. To learn more, visit http://hoffmanstrategygroup.com or connect with Jerry at [email protected].