Retailer's Foot Fetish is Fuel for Feat

On a recent trip to Portland, OR, I deliberately visited the hip urban mixed use neighborhoods.  The site visits were driven by a curiosity about the role foot traffic plays in retailer performance.

View of NW 10th Street from NW Lovejoy Street, Pearl District, Portland, OR - June 27, 2014

View of NW 10th Street from NW Lovejoy Street, Pearl District, Portland, OR - June 27, 2014

Fittingly, the Pearl District is, well, the pearl of the city's oyster.  An eclectic mix of independent retailers like Perch Furniture in cohabitation with REI, Patagonia, Babette, Jack Spade, Silkwood, Safeway, Whole Foods, and Office Max.  The arrangement of stores among the high rise luxury apartments and condominiums promotes walking.  When your feet get tired or you're shopping bags get too heavy, then hop on the Portland Streetcar.

But this is just one of the many neighborhoods that mother's a very youthful energy to Portland.  Other areas include the Hollywood District, Jade District, Midway, and along Hawthorne Street.

As I walk the streets, visit with the retailers, enjoy coffee and a scone in the park, and gaze at the urban space, my mind wonders about what makes this work.  Why are these retailers in this space?  How are they doing?  Who are their customers, and from where do they come?  And, what are the ingredients for creating a sense of community in these urban mixed use areas?

Here are some characteristics that I believe are essential to successful performance of retailers and to place-making in urban mixed use neighborhoods.

Density - Simply, it is better to have more feet on the street.  There are about 12,300 residents within a one mile radius using the Pearl District as the centroid.  For Portland - 4,435.

Daytime Population - Underscoring the importance of feet-on-the-street, commercial activity is another consumer pull factor.  For the Pearl District, there are 3.8 times more daytime workers than residents within that same one mile radius.  Portland is 1.21, overall.

Lifestyles - The retailers mentioned above have located where the consumer lifestyles, preferences, tastes, and behaviors closely match their targeted customer segmentation.  The Pearl District's urban edge profile, described by Mosaic household cluster, is one of an "eclectic mix of never-married singles, their ages ranging between 25 and 45, looking to enjoy a hip and active life in vibrant downtown neighborhoods before settling down."  Over 32% of the Pearl District residents are between the ages of 25 and 34; under 20% for the City of Portland.  Nearly 82% of the Pearl District residents rent; 47% are renters city-wide.

Differentiation - Retailers use differentiation strategies in dense markets to capture market share opportunities.  Such strategies include vertical differentiation vis-a-vis merchandising, price, and brand.  Examples in the Pearl District include Safeway and Whole Foods in the grocery market; REI, Patagonia, and Filson for sporting goods and outdoor clothing; and Perch Furniture, Christopher David, and EFW Modern for furniture and home furnishings.  For hospitality, Residence Inn Marriott and The Mark Spenser Hotel.  

Co-tenancy - There is interdependence among retailers, daytime workers, residents, and visitors in mixed use neighborhoods.  Location of stores, offices, restaurants, transit stops and routes, salons and spas, pilates and yoga centers, and other attractions is intentional and serves both to optimize foot traffic and to take advantage of foot traffic.

To tie these together, practically: I can leave my residence at the Chown Pella Lofts on NW 13th Avenue,  turn the corner and shop for a new pair of James Jeans at Leanna NYC, have a casual meal with a glass of wine at Oba, and finish shopping for my wife at Silkwood.  I hop on the Portland Streetcar at NW 11th and Johnson and travel back home to Glisan Street.  Back home I complete a report for a client located 1,000 miles away.  Afterward, I make dinner using the fresh pasta from Justa Pasta.

That is lifestyle.  And, the lifestyle-retailers are naturally woven into the fabric of the neighborhood.  This is why I chose the title for this blog: Retailers performance is fueled by foot traffic.  The fetish is about paying careful attention to site location characteristics.


Jerry L. Hoffman

Hoffman Strategy Group LLC, 4424 Hallcliffe Road, Lincoln, NE, 68516, United States

Jerry L. Hoffman is owner of Hoffman Strategy Group LLC, a firm nationally known for strategic development, economic analysis, and market location consultancy.