Local retail’s future? Service, clustering and Internet-proofing
By Lou Fancher
If transportation and experiential shopping are twin engines behind future retail in Lamorinda, then Lafayette is a driver, Orinda is uncertain which train to take and Moraga is missing the bus — or more accurately, saying, “No thanks, we’ll stay put.”
This was the takeaway from the second Lamorinda Business Forum on April 25, at which a panel of experts, city officials and business people convened to shed light on “The Future of Retail” in the area. Panelists included Steve Falk, Lafayette’s city manager; Irene Chen, founder and owner of Parker Thatch, a handbags and accessories retailer with online and bricks-and-mortar presence; Tomas Gomez-Arias, a professor with Saint Mary’s College’s graduate business program; Steve Salomon, Orinda’s city manager; and Larry Tessler, a longtime retail specialist.
Seeking to identify how internet shopping, fluid downtown development and elusive consumer trends impact retail in Lamorinda’s three communities, Orinda Chamber of Commerce President Sophie Braccini presented the panelists with a point-blank challenge: “Worldwide, the issue is about the future of retail,” she said. “Downtowns are being deserted because of online business. What are we going to do?”
The panelists agreed that the speed of technological change is a disruptive element. Technology isn’t just the Internet; it’s new supply chains and inventory practices related to distribution — think drones, less stock on site, smaller store footprints, greater need for offsite storage and other modern developments. It’s also new transportation, with e-vehicles and bikes becoming role players.
“I hear almost daily about trouble getting to and parking downtown,” Falk said. Salomon predicted that the use of 2- and 3-wheeler vehicles with large carriers for groceries and other goods, like the kind he said are common in some cities in Europe, will increase dramatically.
Other changes Salomon noted are big-box stores like Walmart that are buying e-commerce competitors or small, limited-stock-on-hand stores in an effort to stay vibrant. “They’re buying a (clothing) company that has only one sample of each item; a new model. You order and they mail it to you. Why? In 2017 through April, there have been 2,880 retail closings. Projections by year end are that it will be more than in 2008, during the peak of the recession,” he said. But large discount bricks and mortar retail, he said would survive because consumers’ price-consciousness has not lessened with the onset of online retail.
Chen said novelty draws consumers to downtowns. “How do you get people into the stores?” she asked. “The main thing is coming in for a lifestyle: something you can’t get online.” Personalized products like the monogrammed bags she sells, finger and toenail shops — “You still can’t get your toenails painted online,” quipped Falk — and corner hardware and grocery stores Chen said would create “stickiness” that keeps a customer in a downtown area for hours.
Knowing the niche — Diablo Foods was mentioned numerous times as a model for its unique goods and exceptional customer service — is essential to the new face of retail. Small, individually-owned, nimble businesses with locally produced goods are most likely to thrive. “The best people to start up small businesses are women, because they keep asking questions. Men stop asking. You cannot stop learning,” said Tessler.
Finding solutions is always more difficult than identifying the problems, but the panelists had ideas. Chen uses Facebook Live and other social media to interact in real time with online customers. Every face-to-face interaction is an opportunity to notice details that might cause a customer to return; invitations from larger retailers or shopping centers to appear as a pop-up store provide access to new markets. Curated, custom mailing lists and newsletters with video content are must-haves, according to Tessler.
Falk said a welcoming, clean downtown area with clusters of Internet-proof businesses like coffee shops, salons and restaurants is essential. Battery-powered bikes, he said, are “the real deal,” and Lafayette is working on a plan to put in a bicycle garage near the BART station that will have valet parking. “You’ll swing up, hop off, and get on BART,” he said.
Salomon partially shifted the burden for attracting consumers off of business owners and onto residents and cities. “It’s up to the community and city councils to have vision and stability and a desire to move forward progressively.” He noted that Orinda hasn’t had a new non-residential building in 30 years and said that fact represents missed opportunity. Moraga Chamber of Commerce President Wendy Scheck said Moraga’s two separated commercial areas and stasis dealing with local property owners were ongoing frustrations. Asked for advice, Lafayette Chamber of Commerce President Jay Lifson said, “The best way to change Moraga is to develop things for the students. It will be really cool.”