Urban incubators: Fueling accelerated retail growth
Ken Nisch, Chairman, JGAJacques Panis, President, Shinola
Christine Sturch, Midwest Design Coordinator, Whole Foods MarketEric Yelsma, Founder, Detroit Denim Co.
• Dynamic. Retail is critical to vibrant cities.
• Integrated work, live, play create vibrancy.
• Growing urban markets are prime spots for the new retail model “Retail 2.0”
• New faces, hybrids, grass roots & innovative legacy brands are beginning to invigorate urban cores.
What WAS & what HAPPENED
what’s WORKING NOW
what’s NEXT
Retail challenges:
• Growth limited by saturation of
traditional shopping areas
• “Small” is better
• Experience > things
• Over-stored/over-spaced
• Department store relevance
• Legacy brand relevance
Core city retail challenges:
• Fragmented ownership & leasing, marketing
• Convenience, service base, not real shopping
• New millennial, gen-Z & legacy urban base
• Fun/fringe vs. needs & wants
• Physical realities
• Investment--ready to open
• Politics, marketing
Now let’s see what WAS & what
HAPPENED by taking a look at
Detroit…
LATE 1800S & EARLY 1900S
S. S. Kresge
(Kresge’s Kmart)
J. L. Hudson (Hudson’s)
Crowley brothers (Crowley’s)
Ernst Kern (Kern’s)
By 1920
Detroit
became
the
richest
city in
the
world“There were so many
people, you couldn’t
even see the pavement.”
–Detroit Historian Michael Hauser
1934: Shoppers outside of
Detroit’s Kresge’s
1945 – EARLY 1950’s:
●3+ million sq ft of retail space; 300 retailers
●Hudson’s:1.2 million sq ft; $163 million sales
peak ($1.4 billion today)
MID-LATE 1950’s & ON:
●Hudson’s sales fell to $45 million.
●By 1983, all dept stores had closed along with 250
specialty stores.
●Population dwindled from 1.8 million to 675,000.
Detroit’s
retail
resurgence
begins…
adding
500,000+
sq ft of
retail space
New
development
of former
Hudson’s site
in Detroit
began Dec 2017
RECENT DETROIT DEVELOPMENT INVESTMENTS:
• $1 billion New Center/Midtown
• $1.2 billion Olympia/Arena
• $2.2 billion Bedrock
• $1 billion Riverfront
• $1 billion medical/education
Suburbs = “over” retail
Cities = “under” retail
170 retailers & restaurants
in Midtown alone, 65 are
women or minority-owned
30+ retail entrepreneurs
(75% based here),
participated in first annual
Downtown Detroit Markets
pop-up shop hub in 2017
Detroit’s new Nike
Community Store
Hires 80% of its team
from within a 5-mile
radius
Requires staff to
volunteer in the
community
Detroit’s accelerated retail growth is being fueled by:
• Local entrepreneurs & skilled craftsmen aka
MAKERS like Detroit Denim
• Impactful chains aka
CATALYSTS like Whole Foods
• Specialized job creators & industry invigorators aka
PIONEERS like Shinola
Eric D. Yelsma
Founder
DET, MICH
Structure
Brand
Manufacturer
Retailer
History2008 - Got fired
2010 – Incubator in Detroit
2011 - Store created
2016 - Moved
2018 –
2010-2015
A Small Business Owner in Detroit
Q: How did this happen?
Q: How’d it take shape?
Q: How did the city help?
Q: How did you grow?
Q: What does it look like,
how does it end?
Resurgence?Ease of doing business
Many neighborhoodsdeveloping (Downtown, Mid-town, Cork-town, West End, Indian Village, New Center, North End etc….)
Spotlight on city
Plenty of room!
Detroit’s Resurgence!
Why Do Retail?
Customer Experience
Connection
Story
Service
Future
Product Portfolio
Website
New Store
201720 pair/day
2020250 pair/day
20231,000 pair/day
End. Thank you.
Food is Fuel
Source: mapdetroit.blogspot.com
Source: detroitfoodmap.com/
Source: mapdetroit.blogspot.com
Why Detroit?
Future WFM?
Betti
Oran
Dan
Phil
Sue
Detroit
Original location: Austin, Texas 1980
CONSCIOUS
CAPITALISM is…
Becoming more
aware
of the higher
potential of business
and how it CAN be in
this world.
“A business that makes nothing but money is a poor business.” –Henry Ford
Committed over $14 million so far,
committing $25 million.
Over 200 loans Provided
Hired Over 70% from community
Hired Over 70% from community
Asked a lot of Questions
Hired Over 70% from community
Asked a lot of Questions
Had a passionate leader
Hired Over 70% from community
Asked a lot of Questions
Had a passionate leader
Connected with Community
Opening Day in Detroit, June 2013
Partnered with 40 cities across U.S. since 2014
LET’S RECAP…WHAT’S NEXT?
RETAIL 2.0:• Urban, under-retailed markets
• Concentrated ownership/landlord control
• “Subscription” style
• Co-working spaces
• Live/Work
• Hybrid
THANK YOU!FOLLOW US ON TWITTER AND INSTAGRAM
@JGA_INC
VISIT US ON THE WEB @ WWW.JGA.COM
JOIN US ON RETAIL FOCUS! EMAIL [email protected]
WITH “SUBSCRIBE” IN THE SUBJECT LINE
TO SUBSCRIBE!
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