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Urban Retailing: Density, Specialization, & Choreography
Presented by:
Amy KooSenior Analyst
Copyright © 2013 Kantar Retail. All Rights Reserved.
501 Boylston Street, Suite 6101, Boston, MA 02116 (617) 912-2828 [email protected]
No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photography, recording, or any information storage and retrieval system now known or to be invented, without the express written permission of Kantar Retail.
The printing of any copies for back up is also strictly prohibited.
Disclaimers
The analyses and conclusions presented in this seminar represent the opinions of Kantar Retail. The views expressed do not necessarily reflect the views of the management of the retailer(s) under discussion.
This seminar is not endorsed or otherwise supported by the management of any of the companies covered during the course of the workshop or within the following slides.
What Do We Mean by Urban?
⁄ Cities with populations of ½ million+ people
⁄ Multi-story, mixed-use developments
⁄ Housing includes apartments, not just standalone homes
⁄ Availability of multiple transit options
⁄ High pedestrian activity
3
Dense urban cores, typically central business districts (CBD) and immediate
surrounding neighborhoods
Source: Kantar Retail analysis, store visits
Urban Growth Is a Demographic Reality
⁄ Boomers want services and access after they can’t drive⁄ Millennials want economic opportunities and active lifestyles
4
“ Both young workers and retiring Boomers are actively seeking to live in densely packed, mixed-use communities that don't require cars, that is, cities or revitalized outskirts in which residences, shops, schools, parks, and other amenities exist close together.”
- Harvard Business Review, May 2010
Source: Kantar Retail analysis, Harvard Business Review, US Census Bureau
Metropolitan: core urban area of 50,000+ residents and the surrounding county/countiesMicropolitan: core urban area of 10,000-50,000 residents and the surrounding county/countiesRural: all areas outside of Metropolitan or Micropolitan regions
GROWTHCHANGE IN
POP. SHARESHARE OF 2010 POP.
Total US 9.7% - 100.0%
Metropolitan 10.8% 0.8% 83.7
Micropolitan 5.9% -0.4% 10.0%
Rural 1.8% -0.5% 6.3%
Metros in the South and
West
Highest growth areas
Inner cores of cities and their closest suburbs
Where Boomers and Their Children Reunite
5
Universal Marketplace Drivers Remain…
Connectivity
PolarizationVolatility
Source: Kantar Retail analysis
6
…But Three New Drivers Are Critical to Understanding Urban Market Dynamics
DENSITY
SPECIALIZATION
CHOREOGRAPHY
High concentration of people, services, and ideas Need for and sustainability of
niche services and products
Explicit and implicit coordination of services and people
Source: Kantar Retail analysis
Density Forces Different Lifestyle and Operating Choices
Living, working, and storage space is compressed, with an emphasis on maximizing its productivity
Individuals transport only what they can carry by hand because of limited car use
Urban messaging is more costly, but is influential to both market residents and distant trendsetters
More competitors and higher costs demand clear positioning and greater innovation
7
Source: Kantar Retail analysis, store visits
Specialization Is Necessary in a Crowded and Competitive Environment
Urban players must accentuate their differentiation to avoid commoditization
Markets for niche interests are possible because of sufficient critical mass
Local cultural cues are strongly promoted and are used elsewhere to signal solidarity
Personal, authentic connections are highly valued because anonymity is the default
8
Source: Kantar Retail analysis, store visits
Choreography Creates Order and Encourages Cooperation
The opportunity to rent, share, and borrow resources makes ownership a more considered decision
Cities are fast paced and operate with expanded hours
Visual and multilingual communication helps direct those with differing needs in public spaces
Time is more highly regimented because wasted time is explicitly seen as opportunity cost
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Source: Kantar Retail analysis, store visits
Successful Urban Retailing Tactics Merge Density, Specialization, & Choreography with the 4 P’s
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PRODUCT
PLACE
PRICE
PROMOTION
Source: Kantar Retail analysis
Urban Retail Manifesto for the Next Decade
1. Commit shopper research resources to better understand urban trip missions and lifestyles
2. Understand how urban shoppers navigate the physical store and align adjacencies accordingly
3. Use punctuated and bold marketing to gain attention in competitive urban areas
4. Tailor messaging to target multiple shopper segments
5. Utilize multiple media outlets, including those that are non-English
6. Weigh assortment toward immediate and short-term consumption items
7. Balance convenience and operational considerations when weighing price decisions
8. Utilize mobile and digital technologies in the physical environment to reach and engage the urban shopper
9. Leverage the higher urban diversity to inform efforts across the US landscape
10. Retool your supply chain to support product flow to and within urban neighborhoods
11. Prepare for higher costs to serve due to more expensive labor and real estate
11
Source: Kantar Retail analysis
© Copyright 2013 Kantar Retail
501 Boylston StreetSuite 6101Boston, MA02116
F +1 630 245 5647
www.KantarRetailiq.com
Amy Koo
Senior Analyst
T +1 617 912 2872
