Every day, on my 2-block walk to the gym on the Bowery, I pass eleven empty storefronts. Half closed over the last 6 months, 4 restaurants, the most recent being Paulaner. Keith McNally’s Cherche Midi will join the blight when it shutters in June.
I’ve been writing about empty storefronts for years. This post from February 2016 was particularly prescient.
Everyone has finally woken up to the disaster that is bricks-and-mortar retail. And now the blame game begins. Our mayor wants to tax landlords for not finding tenants while the NY Post is blaming Amazon, greedy landlords, hedge funds and retailers themselves.
I disagree with all of them. Even if these spaces were available for a fraction of the asking price, there would still not be sufficient takers and more importantly, nowhere near enough customers. If you doubt me, walk around any of the prime retail locations in Soho, or on Madison or Fifth Avenues. With some notable exceptions, the only people you’ll find in those stores are salespeople and security guards. What you won’t find are shoppers. The only consistently busy stores are Apple (filled with tourists, but a shopper is a shopper), Sephora, Supreme, Eataly and Whole Foods.
So what happened? What are we doing instead of shopping?
For me, shopping feels so yesterday, a waste of time. But don’t get me wrong, I am spending money, just not on “retail therapy.” That term even sounds dated and wasteful.
Read on below for what I am spending my money on. Spoiler Alert: it’s all services and experiences.
HERE’S WHERE MY DOLLARS GO:
TIP: Do this for your (and your family’s) spending. Helps to understand firsthand why retail as we know it, has fallen off a cliff.
- TRAVEL: As you may be aware from reading this blog occasionally, I travel a lot. And it adds up. My upcoming Nordic excursion will set me back $20K on top of the $30K spent on Antarctica. So a good chunk of change spent on experiences vs. things. And I don’t regret one penny of it.
- HEALTH & WELLNESS. Another expenditure I find more valuable than shopping. Approximately $500 a month goes to the gym, my trainer, and My Body Tutor (I’ve lost 14 lbs over the last 6 months).
- SOHO HOUSE MEMBERSHIP. Private club membership for co-working and entertaining. I joined Soho House 2 years ago and have never looked back. Inspired to work there and my favorite spot for dinners and drinks and generally catching up with my friends. An extremely worthwhile expenditure – again, all about experience.
- EATING OUT. Checking out new restaurants is both a personal passion as well as one of my blog topics. I eat out at least 4 or 5 times a week – so $$ add up. However, I have noticed that more restaurants are shuttering. It’s soon going to be a handful of top-end restaurants, all the rest will sadly be variations of fast casual (at least in NYC).
- HAIR BLOWOUTS. Twice a week blowouts are more valuable to me than a new wardrobe. If you’re hair looks great, you look great. I generally hit up my Chinatown salon but when it really matters, I book a Drybar blowout. Unfortunately, too spendy to consider for bi-weekly appointments.
- PEDICURES. Once a month. My local place (Breeze Nail Spa) is always jam-packed and the millennials do not seem to flinch when asked if they’d like to spend an extra $40 for a foot massage.
- WINE. My newest obsession. I’ve dialed up my wine game: $60 bottles vs. my previous $12 selections. I’m drinking less but way better. As my friend and wine guru, Luciana Ramsey always tells me, “Life is too short to drink bad wine.”
Why am I sharing all this spending info?
Because it is proof positive of all the new ways we are spending money – and it also provides clues as to what should be going into all that groundfloor retail space currently sitting empty. Very little of my cash is spent at typical retail stores. However, lots of my expenditures are made at physical locations from co-working spaces to salons to wine stores to restaurants.
Think about where – and on what – YOU are happily spending your hard-earned dollars these days.
AND HERE ARE 5 MORE RETAIL TRENDS TO CHECK OUT:
- This is pop up 2.0. With so many empty storefronts, we’re now seeing leasing that allows both companies and landlords to cancel in 60 or 90 days.
- In my neighborhood, FitHouse Gym, just opened on the Bowery with this kind of lease. Fithouse is planning to open 4 more gyms around NYC using shotgun leases.
- We’re also seeing more SHORT-TERM LEASES of 4-6 months being signed by startup retail concepts. In Boston, along Newbury Street, at least 6 stores are using this short term model including Credo Beauty.
CONVENIENCE STORES ARE BOOMING
With 155,000 locations, the c-store industry operates more than one-third of the total bricks and mortar retail stores in the United States.
- More than 160 million customers daily
- Millennials account for more than one-third of those shoppers
- 61% of shopping trips are driven by immediate needs
- 44% of consumers are visiting c-stores more often
- 57% of shoppers visit between 4pm and 7pm
- 68% stop by on their way to – or from – work.
- Beverages influence shoppers to stop at convenience stores more than any other item. Tying beverage purchases to offers for discounts on add-ons like snacks and candy has become a particularly effective method for generating in-store sales.
SMALLER STORES WITH SPECIALIZED SELECTIONS
- Stores are getting away from being massive, shopping in them is such a hassle.
- Consumers looking to make quick purchases don’t want to wander endless aisles looking for what they want
- Smaller stores are also more cost effective from set up to operating costs to finding space in urban environments.
NYU STUDENTS LOVE SHOPPING ON INSTAGRAM
- Fashion Nova, an online retailer based in Los Angeles, has over 11 million Instagram followers.
- Often featuring celebrities and influencers such as Kylie Jenner, Cardi B and Amber Rose wearing its designs.
- Fashion Nova has rapidly grown a loyal consumer base among NYU students almost entirely through Instagram
WOMEN PREFER ONLINE SHOPPING. MEN PREFER BRICKS & MORTAR (Source: First Insight)
- Female shoppers don’t feel the need to go to stores in the same way men do.
- Women are more price sensitive and bargain hunters whereas men are willing to wait longer but don’t necessarily do their research ahead of time.
- 41% of men will shop at full-priced retailers vs. 18% who shop at discount or off-price retailers
- 38% of women prefer discount retailers over full-price brands (31%).
- 40% of women frequently use their phones/apps to shops, compared to just 22% of men
It’s not just the rent that is driving down shopping activity. We are no longer addicted to mindless shopping. Of course, we all need clothes, household goods, food and a myriad other goods but the concept of “retail therapy” seems hopelessly dated.
What I do know is that if I were a developer or a landlord, I would forget about trying to get traditional retail into my buildings.
I would focus instead on converting groundfloor space into affordable rentals or condos. For the foreseeable future we are over-stored. The only retail that has half a chance of survival at this time, is based on “immediate needs” or services.