Near the end of the column she writes, “Bookstores are not likely to survive when the world is fully Kindle-ized, except perhaps for specialty shops. Ditto for music stores.” This passing remark begs a much larger question: What is the future of urban retail in the Internet age? My father recently pointed out in conversation that the easiest way to find the answer is probably to analyze what we buy online, and what we are less likely to seek on the web. At the moment, the top candidates for the latter seem to be food, clothing and furniture, services (hair/nail salons, medical offices), personal banking, experiences (dining out, theater, clubs, bowling), and items we need right away (toilet paper, toothbrushes, medicine). In other words, the Internet has not only redefined retail, it continues to offer a guide to what retail businesses are good bets for the future.
This is not just an urban phenomenon. The Internet has also changed the retail landscape in the suburbs substantially. I grew up in the Philadelphia suburbs near the Plymouth Meeting Mall. On a recent business trip to a Plymouth Meeting office building, I was shocked to see that the mall’s exterior – once a blank wall, fronting the massive parking lots – was now activated, surrounded by dozens of new chain restaurants and a Whole Foods supermarket. In short, its management determined that the future of the mall was not rooted exclusively (or even primarily) in reviving the interior stores, but in bedecking its exterior with these Internet-resistant business categories.
Before the Internet, suburban-style big-box stores were the biggest threat to urban retail vitality. While some big-box chains that focus on the most Internet-vulnerable categories (like Borders) are threatened, it still seems like a number of national, big-box stores are fairly resilient today. Thus these major retailers are also necessarily part of the equation of figuring out urban retail in the Internet age.
Previously, almost none of these stores would locate in an urban-style context, insisting on building boxes in massive parking lots as their exclusive business model. Some big-box stores still do not have an urban design and won’t go beyond their familiar suburban-style look. But these days, many have wised up and now have urban design templates. Savvier cities have found ways to woo these stores downtown (I was recently in an urban-style Best Buy in Manhattan; Manhattan's Home Depot is shown above).
In today’s economy it becomes more important than ever for cities to figure out how to utilize these stores as anchors for urban commercial corridors. In Philadelphia we have many of these big-box stores, but located far away from the downtown and major commercial corridors. It is well known that big box stores have relatively short life spans in suburban-style locations, often staying open only ten or fifteen years before seeking a new spot, leaving vacant “grayfields” behind. Philadelphia should make it a focus to ensure that when its South Philly big boxes close down that the City provides the carrots and sticks to bring these retail anchors to dense, urban-style commercial corridors. This is something the City should be thinking about proactively, rather than waiting for the not-so-distant day that one of the South Philly mega-retailers is ready to shut its doors and move to the next shopping center down the block.
I would argue that cities still have the strongest chance to keep small, diverse, and privately-owned retailers open, but it depends on their ability to understand the new market forces brought on by online shopping, and the necessity of centralizing their major retailers so as to create the critical mass of shoppers needed to provide the kind of retail we have traditionally come to expect from urban shopping. Small commercial corridors can certainly stay relevant based on the perpetual need for place-based, Internet-resilient businesses. However, downtowns and larger urban commercial corridors continue to need anchors.