Opportunity in the Retail Apocalypse

Downtown Concord. Photo by Matthew J. Mowry.

It’s been one of the biggest business stories of 2017: the so-called “Retail Apocalypse.” Big box conglomerates and centuries-old department stores like Sears, Macy’s and JC Penney are closing locations, laying off workers and filing for bankruptcy. Even retail giants like Wal-Mart are watching profits dwindle, and the once-booming American mall has become something of a ghost town in many cities. It’s a digital retail landscape now ruled by Amazon and other online shopping magnets like eBay, Etsy and subscription shopping services.

It’s a scary time to be a brick-and-mortar shop owner, but if you’re a downtown merchant, this may also be a moment of opportunity. Just like the locally sourced food movement that has revitalized the restaurant industry, the pendulum is swinging back to locally made or locally sold retail goods. And as many NH communities work to make their downtowns a destination for local fare, retail is still critical to that mix.

A Destination
“The key to a sustainable downtown is creating a destination, where people want to do more than just one thing,” says Tim Sink, president and CEO at Greater Concord Chamber of Commerce.

He says that shopping has to be part of a larger experience: “A night downtown is about having dinner, going to a show or a movie, and browsing in the shops. No retailer is going to survive without critical mass and healthy foot traffic, so being part of that total mix is crucial.”

One important component to creating a destination downtown is what Sink calls an “entertainment anchor.” In Concord, that’s the Capitol Center for the Arts; in Manchester, there’s the Palace Theatre and SNHU Arena; and in Portsmouth, the Music Hall and Prescott Park Arts Festival draw people in. The idea, says Sink, is to keep people in the area to discover all the other offerings once they’re done with the entertainment.

For downtowns that have an entertainment anchor, it’s important to keep business hours aligned with events happening at the venue. That’s why merchants in downtown Portsmouth and Concord extend business hours on nights when there’s a show or concert. “If you have hundreds of people walking by your business to see a musical or attend a sporting event and you’re not open, chances are, they won’t be coming back,” advises Sara Beaudry, executive director at Intown Manchester.

Personalized Service
While the sweet deals and free shipping of online retailers are hard to resist, they do come with a downside, says Michael Provost, executive director at Rochester Main Street. “Let’s say you purchase a high-end bicycle online, and it comes to you in a box. It’s up to you to put it together. What happens if you have a piece missing or you have trouble assembling it? You’re on your own,” he says. “It’s this exact scenario that keeps shops like Tri-City Bicycles in downtown Rochester busy.”

Runner’s Alley in downtown Manchester has built its reputation on personalized service, helping customers find the perfect running shoe for their foot shape and fitness level. The level of attention each customer gets when trying on shoes is what keeps people coming back, along with trusted advice from employees who are all runners themselves. The store hosts running clinics and cross country team nights for local high schools. This approach has allowed the retailer to grow into a larger location, moving from its longtime Hanover Street shop around the corner to Elm Street in July.

Jeanine Sylvester, founder and GM of Runner's Alley, at her Manchester store. Photo by Christine Carignan.

They knew they were ready to expand when they found that on busy weekends, the floor space at the Hanover Street store was getting too crowded to accommodate families trying to shop together.

Specialty Merchandise
One reason box stores are flailing may be that they’ve tried to be all things to all people. Specialization is the key. When consumers step away from the computer and leave their homes to make a trip to a store, they want to be wowed by merchandise they can’t find online.

Nancy Merrill, director of planning and economic development for the City of Claremont, says that’s the reason for the continued success of Claremont Spice and Dry Goods, located downtown.

“People come from all over the region to buy items from that store,” she says. “The benefit of that is, these kinds of shoppers who are willing to drive to downtown Claremont to find a specific spice are the same folks who will make the time to stop in to a nearby local bakery or wine shop. We are seeing more foodies come into the downtown who come for the spice shop and then stay for the other things we have to offer.”

But it can’t be all about food. Chelsea Stoddard, owner of Queen City Cupcakes, saw a gap in the retail mix of downtown Manchester. This inspired her to open a second business downtown, a gift and home décor shop called Pop of Color. The shop offers unique gifts for special occasions such as wedding, baby showers and birthdays, along with locally made home décor items.

Chelsea Stoddard, owner of Queen City Cupcakes and Pop of Color in Manchester. Photo by Christine Carignan.

Stoddard intentionally makes sure that all merchandise is $50 or less. It’s a formula that seems to be working.

“As a food business owner downtown, it’s extremely important to have retail alongside your restaurant. That’s what creates a destination. People can’t just eat food all day. They need something else to do when they come downtown. You have to have restaurants and retail working together,” she says.

Stoddard chose Manchester for both businesses because she loves the urban downtown vibe and the walk-by traffic. But she has noticed an oversaturation of restaurants downtown. “I remember when Manchester used to be a place where people would come downtown to shop. At the holidays last year, we were busy; we had the Christmas music going, and we were gift wrapping gifts.

Customers were saying that it reminded them of when Elm Street was the place to go holiday shopping. I’m hoping we can get that back again,” she says.

Business Collaboration
Like the foodies who drive to Claremont, Provost says there is a hardcore legion of comic book fans willing to drive to Rochester to shop at Jet Pack Comics, even from other states. Jet Pack Comics owner Ralph DiBernardo wanted to find a way to “share the love” with his downtown Rochester neighbors.

Ralph DiBernardo, owner of Jet Pack Comics in Rochester. Photo by Matthew J. Mowry.

That’s how Free Comic Book Day, held every year on the first Saturday in May, became a local phenomenon. Businesses in Rochester can opt in and purchase 1,000 comics from Jet Pack to give away, and Jet Pack adds these businesses to an interactive Free Comic Book Day map that customers can download. “When we first started, we had about six local businesses participate, and that’s now grown to 24 businesses,” DiBernardo says. “We average about 5,000 people who come into downtown to get their free comic.” Jet Pack collaborates with businesses such as the Rochester Opera House, The Governor’s Inn and Restaurant, art galleries and other retailers to cross-promote the day. Comic fans converge upon the downtown to eat, read, shop and compete in “Cosplay Idol,” a costume competition.

Jeannine Sylvester, founder and general manager of Runner’s Alley, which also has locations in Portsmouth and Concord, says being involved in communities and connecting with other downtown businesses has helped the store succeed. Runner’s Alley included Millyard Coffee, Moe’s Italian Sandwiches and Stark Brewing Company in its grand opening celebration for the Elm Street store. The Portsmouth location worked with the Portsmouth Paddle Board Company on a paddle-run event. “We try to have relationships in the downtown community. It helps us to survive in downtown if we are connected to one another,” she says.

Investing in Downtown
When communities invest in downtown development, the resulting construction  can play havoc with retailers. But those investments result in long-term dividends for shops and the community. Claremont, for example, is investing to bring its aging downtown infrastructure into the 21st century. Merrill is especially excited about a new MakerSpace that will be housed in the old Sawtooth mill building in downtown Claremont. She believes the MakerSpace will bring a different element of visitors into the downtown who might not otherwise check out the area.

Renovations on the space started in August and are expected to be completed by the end of the year. The total project cost is just north of $500,000 and is being paid for through various grants and tax credits. The hope with the MakerSpace is that the artisans and entrepreneurs who become tenants there will branch out into the greater downtown Claremont area. “The MakerSpace could be a strong driver for downtown redevelopment and business creation,” Merrill says.

The Future of Downtown
Retailers and city planners are taking a close look at how downtowns and businesses must evolve if they are going to attract the next generation. Some retailers, such as Dancing Lion Chocolates in Manchester and the Free State Bitcoin Shoppe in downtown Portsmouth, are accepting virtual currency called Bitcoin.

“The future of downtown is all about the millennial,” Provost says. “This is a person who wants to live, work and play in the same area and not have to own a car or go too far from home to have access to everything.”

Beaudry thinks Manchester is ahead of the curve compared to other downtowns as it continues its revitalization. “[We felt] it was important to include living space as well as retail shops, restaurants and entertainment,” she says. “We do have public transportation and just recently, the city launched a bike share program.”

Concord is also well positioned, with its walkability, mixed-use living and commercial space, and even a movie house and performing arts center within a few miles. “We haven’t seen that millennial demographic really take hold yet, but we know it’s coming,” Sink says.