Downtown and Business District Market Analysis

Josh Clements, Iowa State University-Extension

Jenny Garner, University of Illinois-Extension

Bill Ryan, University of Wisconsin-Extension

The Market Analysis Process

Funding - North Central Regional Center for Rural Development (NCRCRD) Seed Grant

Presented at the

Community Development Society Annual Meeting

July 20-23, 2014, Dubuque, IA

http://ncrcrd.org/

Outline of the Process

I. Understanding the Market

II. Analysis of Opportunities by Sector

III. Putting Your Research to Work

How do we fill storefronts and reuse downtown

space?

Is there potential for

downtown housing?

How are consumers changing?

How can we assess

potential for

businesses development?

How can the physical environment be improved?

How can we encourage

residents to buy-local?

How can independent

businesses

co-exist

with large-format stores?

What could be our

market niche?

What image, branding and

marketing changes are

needed?

How can we retain

and expand existing

businesses?

Purpose of a Market Analysis

1. To support business development

with reliable data that accurately

describes the market.

2. To research issues specific to your

particular community.

3. To provide a foundation for

developing economic development

strategies for a business district.

http://fyi.uwex.edu/downtown-market-analysis/


Trade Area Analysis

Factors to Consider:

• Population

• Proximity of competing

centers

• Local mix of businesses

• Local destination attractions

• Traffic patterns

Tools to Use:

• Focus groups

• Mapping using geographic

features (distances,

highways, drive-times, etc.)

• Mapping using customer

addresses and zip codes

A trade area is the geographic area from which a community

generates the majority of its customers. A community may

have both a convenience and a destination trade area.

What is the Best Method for Defining a Trade Area?

Answer on Your Clicker

A. A 15-mile Ring – its simple and site selectors use it

B. Zip Code Area – covers the local mail delivery area

C. County Boundaries – economic data is readily available

D. Customer Origin Data –where people are actually from

E. Combination of these and other methods

Establishing Trade Area(s) Using GIS


Demographic & Lifestyle Analysis

Demographic Data:

• Population and households

• Housing ownership and value

• Income

• Age, gender and ethnicity

• Educational attainment

• Employment

Lifestyle Data:

• Households in a trade area

are segmented into unique

clusters that describe their

lifestyle, characteristics

• Examine spending propensity

for a variety of goods and

services

Demographic and Lifestyle data can provide insight into local

consumer buying behaviors and preferences. Comparison are

made to state and national averages.

What group do downtown urban amenities appeal to?


A. Baby Boomers (born 1946-1964)

B. Generation X (born 1961-1984)

C. Millennials (born 1977-2003)

D. Generation Z (born 1996 to present)

Source: PUMA 2014 Global Trends

Analysis of Trade Area(s) Using Tables and Maps


Local and Regional Economic Analysis

• Industry Concentrations and Employers

• Labor Force and Employment Levels

• Entrepreneurial Activity

• Business Climate Analysis

• Real Estate Activity

• Transportation Patterns

• Institutions

• Tourism and Community Attractions

• Quality of Life Measures

Economic data can help describe downtown’s position in the local and regional economy and identify factors that are of competitive advantage.


Business Owners Survey

Purpose of Questions:

• provides information on

business needs to support

retention and expansion

efforts.

• Allows business community

to share ideas for new

economic activity in the

community.

Possible Methods to Use:

• Written Survey

• Telephone Survey

• Web-Based Survey

• Business Visitations

• Focus Groups

A business owner survey invites business owners to share their

perspectives regarding the current and future economic health

of the business district.

Provides Information on:

• Who they are and how to

reach them.

• Where, when and why they

shop for various goods and

services

• How downtown can be

improved in terms of retail as

well as other uses.

Possible Methods to Use:

• Written Survey

• Telephone Survey

• Web-Based Survey

• Social Media

• Intercept Surveys

• Focus Groups

A survey can help you understand the attitudes and shopping

behaviors and preferences of current and potential consumers

specific to your trade area.


Consumer Survey

Surveys – Download Examples and Templates

Toolbox includes:

• Question-bank to help you

determine what questions are

most relevant to your analysis

• Downloadable survey templates

that can be customized for your

community.

• Examples of surveys that have

been customized and

implemented in various cites.

Structure of Sessions:

• 7-10 people with common characteristics (perhaps same

market segment)

• Minimum of three groups

• Conducted by a trained facilitator

• Non-threatening environment

• Used to understand human behavior

• Not used to collect facts

A carefully planned discussion to collect qualitative data about

feelings and perceptions regarding the downtown area.


Focus Groups

What is an Important Benefit of Conducting Focus Groups?


A. Allows interactive exploration of an idea or issue.

B. Doesn’t require skilled moderators.

C. Can generalize to the population.

D. Easy to analyze or assess consensus.

Identifying Comparable

Places:

• Similar in Demographics

• Similar in Location

• Similar in Urban and Rural

Characteristics

• Similar Function

Identifying Successful

Districts:

• Knowledge from existing

study group members

• Recognized downtown

successes

• Research websites of

downtown or Main Street

organizations

Examining Similar Cities and their Business Districts is useful in

identifying potential business opportunities and economic

development strategies.


Peer City Comparisons

Includes tools for estimating demand and supply for selected

business categories. Business opportunities are examined in

terms of quantitative and qualitative factors

Realistic Retail/Service

Business Opportunities

Demand Supply

Reasonableness Check


Examining Retail Opportunities

What is an Obstacle to Measuring Local Retail Demand and Supply?


A. Trade areas vary

B. Difficult to obtain reliable data

C. Difficult to measure internet sales

D. Stores rarely fit into clean and discrete categories

E. All of the above

Retail Analysis Tool: Gap Analysis Calculator

Includes techniques for estimating demand and supply for

various downtown uses. To the extent possible, opportunities

are examined in terms of quantitative and qualitative factors


Analysis of Other Property Uses

• Restaurants

• Arts and Entertainment

• Housing

• Office Space

• Lodging

Housing is an essential, often overlooked, element in the vitality

of a downtown.


Housing

Benefits:

• Increased foot traffic

• Increased “eyes on the

street”

• Support local businesses

• Housing for Downtown

Businesses

Assessment Steps:

• Estimate Demand

• Determine Supply

• Assess Need

• Identify Opportunities

• Identify Challenges

• Niche Development

• Image, Branding, Marketing

• Space Usage

• Business Retention/Expansion

• Business Recruitment

• Entrepreneurship

• Benchmarking

Market analysis findings can provide a solid and objective

foundation for launching economic development strategies for

your district.

III. Putting Your Research to work

Using Your Market Analysis

Pop. 7,479

Silvis is located in northwestern Illinois and calls itself “City of Progress”. It known for Hero Street, a historic landmark where 100 residents from 25 homes served their Country in conflict. Much of its early settlers derive from working on the largest terminal of the former Rock Island Lines.

36

Other notes: Downtown businesses include several destination restaurants, and another business district hosts the PGA tour every summer TPC at Deere Run.

Downtown Images

38

Mayor Tom Conrad

http://youtu.be/XOzwtZWsius

39

Four Goal Areas

• Marketing plan and brand strategy

• Main Street program

• Capture thoroughfare traffic using the First Ave/Downtown corridor

• Organize and expand tourism as a revenue base

40

41

Strengths Weaknesses Access to industrial rail Car lots Authentic Mexican grocery store Condition of some buildings City-owned greenhouse Vacant buildings Easily accessible from east and west Five miles from Mississippi River Interstate access (I-74, I-80, I-88 leads to Chicago) Longevity of business owners Main Street designation Managed speed into the downtown Railway Park and restored caboose Two-lane, two-way traffic Vacant lots Well maintained and well lit


Trade Area Analysis

• Why create a trade area?

• Methods and tools for defining a trade area

• Introduction to online tools to draw a trade area

Trade Area Considerations

Factors to Consider:

• Population

• Proximity of competing

centers

• Local mix of businesses

• Local destination attractions

• Traffic patterns

Tools to Use:

• Focus groups

• Mapping using geographic

features (distances,

highways, drive-times, etc.)

• Mapping using customer

addresses and zip codes

A trade area is the geographic area from which a community

generates the majority of its customers. A community may

have both a convenience and a destination trade area.

Method 1: Business and Customer Focus

Groups

Retail Item Where do

you go to

shop?

How far are

you willing

to drive?

Which other

communities

shop in your

town?

Groceries

Drugstore

Hardware

Method 2: Select Geographic Features

• Mapping tools

• Rings

• County or Zip code area

• Drive Time

• Equal competition areas

Rings

Drive Time

Equal Competition Areas

Method 3: Law of Gravitation

Method 4: Use Customer Data

• Customer Address or Zip Code Data

• Zips easier to collect

• Electronically in Excel or Access is best

• Collection worksheet in toolbox

Establishing Trade Area(s) Using Customer Data

Establishing Trade Area(s) Using Customer Data

Finalizing Trade Area - Combining Methods

54

Trade Area

http://youtu.be/F5ueMC66L2I

http://youtu.be/hqb4yTXj5bs


Demographics and Lifestyles

• Demographic Analysis

• Lifestyle Analysis

• Spending Potential

56

Types of Data

• Population/households

• Age

• Income

• Education

• Occupation

• Ethnicity

• Residence

Demographic Analysis

Data Sources

Public Sources:

• US Census Bureau

• State and University Data Centers

Private Sources (examples):

• ESRI

• Claritas

• Others

57

Population/Households

What it tells us:

• Market size

• Future growth

• Average number of people that live together (household).

Trends in the U.S.:

• 309M in 2010, double that of 1950

• Average Household Size of 2.58

58

Age

What it tells us:

• Predominance of certain age categories (each with different

personal expenditure preferences

• Under 18

• Over 65

Trends in the U.S.:

• 13.3% were 65 and older

in 2011 vs. 8.1 % in 1950 (US Census)

59

Income

What it tells us:

• Distribution of income in the trade area as an indicator of

spending power

Trends in the U.S.:

• Median Household Income of $50,500 (US Census, 2011)

• 32.5% earn more that 75,000

• Impact of the Great Recession

60

Education

What it tells us:

• Potential market support in certain product categories and for

certain businesses

Trends in the U.S.:

• 28.5% have 4 or

Or more years of

college

61

Occupation

What it tells us:

• Distribution of white-collar, blue-collar and service sector

employees as an indicator of trade area preferences

Trends in the U.S.:

• Growth in service sector employment (2011 US Census)

• Retirement of baby-boom generation will stall the growth of the

workforce in many areas

62

Ethnicity

What it tells us:

• Composition and diversity of trade area and variation in

preferences for different goods and services

Trends in the U.S.:

• Increased diversity

• Now only 63% are “white alone” (2011 US Census)

63

Residence

What it tells us:

• Ownership levels may indicate propensity to shop for home

furnishings, equipment and upkeep

Trends in the U.S.:

• The homeownership rate in the U.S. declined to the lowest in

almost 19 years as rising property prices and mortgage rates

held back demand. Source: Bloomberg April 2014

64

65

Data Sourc es - Applied Geographic Solutions 2000 Estimates and U.S. Census Bureau

0 2 4

Miles

Local RoadSecondary Road

Major Highway

Interstate Highway

Major Water

Population Density (Persons/Sq Mi)

1 to 250251 to 500501 to 750751 to 1,0001,001 to 1,2501,250 to 1,5001,500 to 1,750

1,750 to 2,0002,000 or More

Area of Inte rest

La Crosse Area Population Density

DowntownLa Crosse

%[

Mi s

si s

si p

pi

Riv

er

Use GIS to Visualize Data

66


67

$T

$T

$T

$T $T

$T

$TBrown Deer Rd.

Dean Rd.

Bradley Rd.

Ran

ge

Lin

e R

d

Riv

er R

d.

Upp

er R

iver R

d.

Median Household Income - $75,238

Age Over 65 - 23.2%

Bachelor's Degree - 32.8%

Home Owner - 77.2%

Neighborhood Demographics

Sample Visitor Neighborhood

Neighborhood BoundaryStreets

$T Visitor Origin


68

Households in each trade area can be segmented into unique clusters that describe their demographic, lifestyle, media and purchasing characteristics. These systems help you know the potential customer in your area including what they buy and how to reach them.

Free zip code data:

• Community Tapestry by ESRI Business Information Solutions). http://www.esri.com/data/esri_data/tapestry

• Claritas PRIZM by Nielsen. http://www.claritas.com/MyBestSegments/Default.jsp

Lifestyle Analysis

http://www.esri.com/data/esri_data/tapestry

http://www.esri.com/data/esri_data/tapestry

http://www.claritas.com/MyBestSegments/Default.jsp



Sample buying habits and preferences

Source: Nielsen PRIZM 2014

Downscale Younger w/ Kids

Bedrock America consists of economically challenged families in small,

isolated towns located throughout the nation's heartland. With modest

educations, sprawling families, and service jobs, many of these residents

struggle to make ends meet. One in five live in mobile homes. One in four

haven't finished high school. Rich in scenery, Bedrock America is a haven for

fishing, hunting, hiking, and camping.

Demographics Traits

•Urbanicity: Town/Rural

•Income: Downscale

•Income Producing Assets: Low

•Age Ranges: <35

•Presence of Kids: HH w/ Kids

•Homeownership: Mix, Renters

•Employment Levels: WC, Service, Mix

•Education Levels: High School Grad

•Ethnic Diversity: White, Black, Hispanic, Mix

Lifestyle & Media Traits

•Shop at Walmart Pharmacy

•Buy tricycles

•Read Baby Talk

•Watch Cops

•Buy pre-owned vehicle

Spending Potential

Estimates for a trade area are

based on demographic data and

available from:

• Private data firm reports

• Extension's “Gap Analysis

Calculator”

70

Spending Potential Using Private Firm Reports

Potential sales in the trade area are also available through

purchase from private data firms based on their internal

models. See the “Food and Home” (mostly grocery stores)

example below:

Food at Home: Total $ $49,306,088

Average Spent $4,024.00

Spending Potential Index 90

Data Note: The Spending Potential Index represents the amount spent in the area relative to a national average of 100.

Source: Consumer Spending data are derived from the 2005 and 2006 Consumer Expenditure Surveys, Bureau of Labor Statistics.

ESRI

Spending Potential Using

the Gap Analysis Calculator Grocery store calculation:

U.S. sales per capita by based

on the U.S. Economic Census

($1,631)

The ratio of local trade area per

capita income to U.S. per capita

income ($25,537/$26,739)

Trade area population (29,897)

Multiplication of above figures

is equal to the “Potential Sales

in Trade Area” ($46 million)


Local and Regional Economics

Economic data can help describe downtown’s position in the local and regional economy and identify factors that are of

competitive advantage.

• Industry Concentrations and Employers

• Labor Force and Employment Levels

• Entrepreneurial Activity

• Business Climate Analysis

• Real Estate Activity

• Transportation Patterns

• Institutions

• Tourism and Community Attractions

• Quality of Life Measures

This part of the toolbox includes

sections to analyze:

Analyzing Economic Data Using GIS


Conducting Surveys and Focus Groups

1. Importance of Business Owner Research

2. Importance of Consumer Research

3. Types of “Primary” Research

4. The Process of Conducting a Survey

5. The Process of Focus Groups

6. Social Media?

1. Importance of Business Owner

Research Business owner research engages the business community

in the market analysis process. It invites business owners

to share their perspectives regarding the current and future

economic health of a business district.

78

• What business challenges are you facing? Red flags?

• What business incentives or assistance would be helpful?

• Characteristics of your business: category, years of operation, space occupied, employment, etc.

• Market characteristics: busiest times, impact of community events, advertising effectiveness, target markets, etc.

• Toughest competition and the products or services that differentiate your business.

• Businesses that complement your business the most and those you would most like to see come downtown.

Sample Questions - Business Owner Research

2. Importance of Consumer Research

A market analysis should include local research to fully

understand the uniqueness of your particular market and its

consumers.

80

• When do you typically shop for non-grocery items?

• What restaurants or types of cuisine do you prefer?

• Which events have you attended in the last 12 months?

• How often do you come downtown and why?

• How often and why do they shop at competing locations?

• Which businesses would you patronize if opened downtown?

• Demographics: gender, age, address, income, etc.

• Attitudes about the downtown and the community.

Sample Questions – Consumer Research

3. “Primary” Research

Secondary data is existing data which has

been collected, including U.S. census data,

county based economic data, school district

data, health department data, etc.

Primary data is information that you collect,

including surveys, case studies, focus

groups, interviews, pilot tests, observational

studies, etc. Data can be collected from

Consumers

Business operators and property owners

Mail Surveys

Usually cost efficient (few workers needed)

Lots of planning and development time.

Can get very good lists for sampling.

Can generalize to the population.

Can assess users and nonusers of downtown.

Fairly easy to analyze.

But . . . Still costs money (postage, data entry). Low

response rate. Self-selected respondents. Possible

language or literacy barriers. Cannot clarify information or

see if questions are confusing.

83

Sample Surveys in the Downtown & Business

District Market Analysis toolbox

• Business Owner

Survey

• Consumer Survey

84

Ability to target actual downtown users

Immediate (downtown experience is fresh in their mind)

Can target users by location, date and time of day

Expressive (can observe/record body language)

Cheapest (with volunteer interviewers)

But… More workers required. Time consuming. Misses

nonusers. Difficult to get a large sample.

Intercept Surveys

Telephone Surveys

Can clarify questions and expand on responses.

Reduces time spent reaching respondents.

Address issues quickly if calls are made from a call center.

Broad, random sample.

Target respondent by asking for him/her.

Can assess users and nonusers of downtown.

Fairly easy to analyze.

But . . . Not everyone has a listed number (cell phone users.

Excludes segments of the population. Only simple questions.

Labor intensive. Negative attitudes regarding phone surveys.

Online Surveys

Software/programs available free of charge.

Easy to format and develop.

Inexpensive to design, distribute, and collect data.

But . . . You must have a list of email addresses and make

random selections from the population. Excludes certain

segments of the population.

Personal Interviews

Flexible to Implement

Reach hard-to-reach populations.

Encourages responses and gathers depth of information

Targeted precisely.

But . . . Personal interviews sacrifice anonymity, and are

too costly to use to generalize to the entire population.

They require trained interviewers.

Focus Groups

Allow exploration of the idea or issue. Interactive.

Get details of “why” people feel and act the way they do.

Respondents can fully express their views.

Targeted

Fast and cheap.

But . . . Need skilled moderators. Cannot generalize to the

population. Can’t ask about information that should be

confidential. Interactive can create peer pressure. Hard to

analyze or assess consensus.

$ Time (staff, volunteers, time managing volunteers)

$ Dollar costs: postage, printing, telephone time, recorders

$ Training for interviewers

$ Participation requirements

$ Project time (how long to implement and get results)

$ Data entry

$ Data analysis

Figuring the Cost of Primary Research

4. The Process of Conducting a Survey

1. Define goals.

2. Develop and define method.

3. Ask: will this work within our constraints?

4. Develop survey instrument(s).

5. Identify population, select sample; develop contacts.

6. Test the survey instrument (often questionnaire).

7. Implement survey process.

8. Collect data.

9. Analyze data.

10. Prepare report.

• What questions are we trying to answer?

OR

• What problem/issue are we trying to address?

AND

• What new information do we need to address this issue?

Survey Design

Consider:

What survey method will we use?

Is this question part of another survey that we need to

match?

Will our proposed response group be able to answer this

question or provide this information?

Is there a standard way to think about the answer to this

question, that enables respondents to report accurately?

Will we be able to use this information if we get it?

Developing Survey Questions

5. The Process of Focus Groups

1. Define goals.

2. Selecting and Inviting Participants

3. Moderator and Assistant Moderator Skills

4. Beginning the Focus Group Discussion

5. Asking Questions that Yield Powerful Information

6. Systematic Analysis Process

7. Reporting the Results

Sample questions for a downtown resident focus group:

Think about our community. What do you feel are the

advantages of living downtown compared to other

surrounding communities? What are the disadvantages?

Consider the amenities present in our downtown such as

entertainment and cultural venues, dining establishments,

and shopping opportunities. Which amenities contribute

most to your quality of life downtown? What additional

amenities would improve downtown as a place to live?

Developing Focus Group Questions

95

Concern Citizens & Businesses

http://youtu.be/q_I3WHFahWc


Peer City Analysis

1. Identifying Peer Cities

2. Comparing Peer City Business Districts

3. Learning from Peer Cities

1. Identifying Peer Cities

Socio-Economic Measures

• Demographics

• Household Income

Geography

• Relationship to regional Cities

Other Characteristics

• University or Hospital presence

• Economic niche (tourism, commuter, etc.)

2. Comparing Peer City Districts

Research

• Determine significant similarities and differences

Data

• Demographic & Lifestyle

• Employment

• Housing

• Vacancy Rate, Rents

• Retail & Service mix

3. Learning from Peer Cities

Determine Learning Objectives

• Just data, or qualitative lessons?

• Visit and/or Interview Stakeholder(s) in Peer Cities?

How Does Our Community Compare?

• Business Mix, Housing

What has worked, not worked?

Grain of Salt

Peer City Example

Group 1: University

Cities

Population 2000-2010 Pop.

Growth Rate

Pop. In

Family HH

Pop. In Non-

Family HH

Pop. In Group

Quarters

Median

Age

Median

HH Inc.

% Rented

HH UnitsUniversity Enrollment

Whitewater, WI 14,390 0.6% 5,553 5,294 3,451 22.9 $36,415 66.0% Universit of Wisconsin - Whitewater 10,230

Carbondale, IL 25,902 1.7% 10,238 12,064 3,241 23.5 $25,021 75.1% Southern Il l inois University 18,847

Charleston, IL 21,838 0.4% 9,807 7,983 3,798 23.9 $31,781 56.6% Eastern Il l inois University 9,700

Macomb, IL 19,288 0.4% 8,244 7,055 3,711 24.1 $34,793 58.1% Western Il l inois University 12,200

Menominee, WI 16,264 0.8% 7,267 5,701 2,984 24.1 $41,324 59.7% University of Wisconsin - Stout 9,339

Northfield, MN 20,007 1.2% 12,338 2,965 4,540 26.4 $60,164 31.4% Carleton College; St. Olaf College 1,991; 3,007

Platteville, WI 11,224 1.3% 4,646 3,825 2,620 23.4 $43,050 54.3% University of Wisconsin - Platteville 8,624

Ripon, WI 7,733 0.3% 5,265 1,501 887 36.9 $41,458 38.0% Ripon College 931

River Falls, WI 15,000 1.4% 8,414 4,047 2,471 24.6 $53,306 44.9% University of Wisconsin - River Falls 6,796

Whitewater, WI

Peer City Example

Whitewater, WI

Research Questions:

• What is your relationship to your University?

• What businesses thrive in these communities?

• Are Whitewater’s housing pressures unique, and what

to do about them?

• How to successfully utilize local assets?

• Composition of the business/industrial park?

• Strategies to grow local University spin-off firms

II. Analysis of Opportunities by Real Estate Sector

• Retail/Services

• Restaurants

• Housing

• Office

• Lodging

Includes tools for estimating demand and supply for selected

business categories. Business opportunities are examined in

terms of quantitative and qualitative factors

Realistic Retail/Service

Business Opportunities

Demand Supply

Reasonableness Check


Examining Retail Opportunities

/

Retail Analysis Tool #1: Business Mix Analysis

Comparison with Wisconsin cities/villages with 2,500-5,000 Pop. (Average of 60 Downtowns)

NAICS Description Number Sales (000's) Full-service restaurants 4.57 2,515 Beauty salons 3.52 573 Drinking places (alcoholic beverages) 3.08 784 Gasoline stations 1.72 6,295 Other amusement (bowling, golf, fitness) 1.63 779 Automotive mechanical & electrical repair 1.30 491 Gift, novelty, & souvenir stores 1.08 378 Used merchandise stores 1.08 466 Grocery stores 1.07 8,084 Automotive parts, accessories, & tire stores 1.05 1,032 Appliance, television, & other electronics stores 0.93 1,459 Florists 0.88 210 Barber shops 0.78 71 Sporting goods stores 0.73 348 Pharmacies & drug stores 0.72 1,720

Retail Analysis Tool #2: Gap Analysis Calculator

Let’s go live with Excel and

Enter Some Assumptions.

Retail Analysis Tool #3: Pull Factors

Pull Factors measure the strength of a trade area. It allows

you to measure trends in sales and analyze your

performance against competitors.

A pull factor bigger than 1.00 means the area is “pulling” in customers.

Pull Factor = Community Sales Per Capita

State Sales Per Capita

• Case studies of downtown retail and service businesses that:

build on downtown’s character and

offer products and services not found in big box stores.

• Searchable by

Type of business

Size of community

“Reasonableness Check”

Innovative Downtown Businesses Clearinghouse

Retail Analysis Worksheet to Compare Demand

and Supply

Includes techniques for estimating demand and supply for

various downtown uses. To the extent possible, opportunities

are examined in terms of quantitative and qualitative factors


Analysis of Other Property Uses

• Restaurants


• Housing

• Office Space

• Lodging

Housing is an essential and often overlooked element in

revitalization of downtown districts. Changes in demographics,

demand, and economics are creating new opportunities in

communities of all sizes. How can we determine specific

opportunities in a particular community?


Housing

Raise your hand….

Housing

• Is housing part of your downtown vitality plan?

• Is housing part of your community’s economic development

approach?

• Is housing part of your community sustainability strategy?

• Do you know what your City’s zoning allows downtown?

• There has been no new development in the downtown for

years… decades…

“Housing Must Be Downtown’s Political and Business Priority” - Jennifer T. Moulton, former Director of Community Planning, City and County of Denver

Examining Housing Opportunities

Housing Snapshot

• Local Demographic Data

• Local Economic & Employment Data

• Housing Affordability & Cost Burden

Comprehensive Needs Assessment

• Greater Data Detail

• Investigate Policy & Infrastructure Opportunities & Barriers

• Engage Housing Industry Stakeholders

Successful downtown revitalization efforts often focus on creating

synergy from the optimal mix of building and space uses.

Housing Analysis Options

Characteristics

• May be 3-12 month process

• Utilize local public, private, and survey data

• Identify specific needs and opportunities

• Engage decision makers, industry, and public in conversation

Data

• Local Development Figures (# units, price, historical trends)

• Sales Data (# units, price)

• Map spatial trends in development, value

Comprehensive Housing Assessment

Define Housing Market Area

• Typically entire community and surrounding geography

Population & Households

• Unit of analysis is the household

Age

• Generational differences may translate into housing priorities

Income & Employment

• Income determines affordability

• Assess employment trends

Latent & Move-up Demand

Housing Demand

Data Required:

• Number and Type of Units

• Tenure

• Vacancy Rate

• Housing Prices

• Rental Rates

Housing Supply

Housing Need

Assessment

Survey & Focus Group Research

Interviews

Review data, analysis, and insight with planning team

Opportunities, Barriers, Priorities

• Is housing part of the Downtown Plan?

• What does zoning permit for housing in and near downtown?

• What are the stated community’s priorities regarding housing?

Housing Opportunities

III. Putting Your Research to Work:

Making Recommendations

• Niche Development

• Image, Branding, Marketing

• Space Usage

• Business Retention/Expansion

• Business Recruitment

• Entrepreneurship

• Benchmarking

• Niche strategies allow a downtown to gain a dominance in

certain business categories

• Niches work well in highly competitive business environments

(market differentiation)

• Niches require cooperation between local businesses (education

about niches)

• Niches can be based on consumer segments or product

segments

A niche is a critical mass of businesses serving a common

market segment(s) that is also jointly marketed and promoted.


Niche Development

Corning, NY

Pop. 11,000

Home of:

Corning, Inc.

Museum of Glass

Rockwell Museum of Western Art

123

Niche: Art Glass:

Hot-glass studios, art galleries, apparel, antiques, home

accessories, gifts, micro-breweries add restaurants

Continued –Niche Development

Saratoga Springs, NY

Pop. 26,000

Historic resort town:

mineral spring spas

horse racing

Skidmore College

Performing Arts Center

124

Niche: Women’s Clothing

Independent women’s clothing stores, accessory stores, gift shops,

spas, skincare, massage, salons, and cafes. A number of chains

have located downtown (Eddie Bauer, The Gap, Borders, etc.).


Sheboygan Falls, WI

Pop. 7,000

Historic and well-restored

community near the

Kohler factory. Five

miles from Sheboygan

and Lake Michigan.

125

Niche: Home Improvement

Paint, furniture, lighting, hardware, antique, landscape, and

gardening stores along with interior design and art studios. An

annual event called Home & Hearth promotes home

improvements and decorating.


Waynesville, OH

Pop. 2,600

Waynesville is located in

southwestern Ohio

and calls itself "The

Antiques Capital of the

Midwest",,

126

Niche: Antiques

25 downtown antique shops and a number of specialty gift shops,

food & drink establishments, art galleries, and furniture stores.


New Glarus, WI

Pop. 2,100

New Glarus is located in south-central

Wisconsin and calls itself

“America’s Little Switzerland”. It

has become famous for its

authenticity, built on its Swiss

heritage.

127

Niche: Ethnic Heritage

Businesses include a butcher shop, bakery,

brewery, restaurants, lodging, and festivals

related to its Swiss heritage.


Reading OH

Pop. 11,000

Reading is a suburb of

Cincinnati

128

Niche: Weddings

Focuses on bridal shops and supporting businesses such as

florists, photographers, jewelers, and stationary stores. There

are 31 such stores.


1. Define Your Key Markets Segments and Market Position

2. Improve the Image and Develop a Brand for Downtown

3. Implement Marketing Programs

Uses market information to learn about your downtown’s key

consumer groups and how to reach and serve them better.


Image, Branding, Marketing

Define Your Key Markets Segments and Market

Position

Use Your Market Analysis Findings to Answer the Following:

• What is my geographic market?

• What are my target market demographic characteristics?

• How is my consumer market changing and how can

businesses effectively respond?

• What customer segments am I currently attracting and

which ones offer potential?

• Who is my competition?

Improve the Image and Develop a Brand for

Downtown


• What negative perceptions/realities affect downtown’s

ability to attract customers?

• What positive perceptions and amenities currently draw

people downtown?

• What information do I need to effectively brand my

downtown business district?

• What steps should I take to make downtown more

attractive to its target market segments?

Implement Marketing Programs


• What types of advertising, promotions and P/R would

effectively reach current and potential customers?

• How do I evaluate return on my advertising and/or

marketing investment?

• What special events might be popular in my downtown?

• What special promotions might my business district want

or need?

• How can existing businesses (individually or collectively)

sell more goods and services to event visitors?

133

Branding

http://youtu.be/h_acHNOJOdo

Downtown Business Arrangement

• "A-Street" and "B-Streets"

• Pedestrian interaction.

• Consider auto access.

• Consider walking distance and use of both sides of street

• Street-level and upper-level units.

Clustering

Involves geographically grouping certain businesses together so that both the customers and business operators benefit.

Successful downtown revitalization efforts often focus on creating

synergy from the optimal mix of building and space uses.


Space Usage

Ente

rtain

ment:

Theate

rs

Ente

rtain

ment:

Bars

&

Resta

ura

nts

Reta

il:

Com

parison

Reta

il: S

pecia

lty

Reta

il:

Convenie

nce

Hote

l

Off

ices

Resid

ential

Residential

Offices -

Hotel

Retail: Convenience

Retail: Specialty Stores

Retail: Comparison

Entertainment: Bars &

Restaurants

Entertainment: Theaters -

Level of Market Synergy in Mixed Use Development

Strong

Weak or Uncertain

- Neutral, Absence of Synergy

Potential Market Conflict

Source: Real Estate Market Analysis: A Case Study Approach

Compatibility of Mixed Uses

Form a business retention and expansion team

Why is it important?

• Researchers estimate that existing businesses create a large percent of all new jobs.

• Businesses that stay competitive are more likely to remain in the community – and possibly expand.

• Keeping an existing business is often easier and less costly than recruiting a new business.

• Businesses considering coming to the community will talk to existing businesses. Odds for attracting new businesses are better if existing ones are happy with the community.


Business Retention/Expansion

1. Forming a business retention and expansion team

2. Identifying warning flags

3. Offering individual business assistance

4. Developing business retention and expansion strategies

BR & E Process

• Step 1: Assemble a Team

• Step 2: Create a Supportive Business Environment

• Step 3: Assemble Recruitment and Marketing Materials

• Step 4: Design an Ideal Tenant Mix

• Step 5: Identify Prospective Tenants

• Step 6: Contact Prospective Tenants

• Step 7: Close Deals with Prospects

The key is to honestly demonstrate that the community is a

profitable place to do business.


Business Recruitment

Sample Worksheet Summarizing Opportunities

Supported in Study: N

AIC

S C

od

e

Category

Market Opportunities

Focu

s G

rou

p R

esu

lts

Co

nsu

me

r Su

rve

y

Bu

sin

ess

Ow

ne

r Su

rve

y

Bu

sin

ess

Mix

An

alys

is

De

mo

grap

hic

An

alys

is

Surp

lus/

leak

age

St

ud

y

442 Furniture/Furnishings X

443 Electron/Appliance X X

444 Building material and

garden equip dealers

Garden store

Hardware store X X X X X

445 Food and beverage

stores

Grocery store

Specialty food (local foods, meats, cheese,

wine)

X X X X X X

Finalizing Your Wish List: • Is there appropriate space in the district for this type of

business?

• Will it complement existing businesses?

• Will it serve targeted market segments?

• Does it fill an important gap in the business mix?

• Will the business strengthen an existing cluster of businesses?

• Was this business category identified as important in local

consumer research?

• Does market demand and supply data support the need for this

types of business?

• Does the business fit it with the market position and vision

statements?

1. Use information from your market analysis to find clues about

prospective entrepreneurs.

2. Use information to examine the strengths and weaknesses of

your district’s infrastructure as it relates to entrepreneurship.

3. Your market analysis may provide ideas on how to build

connections among entrepreneurs and the community.

Use your market analysis to support entrepreneurship in your

downtown or business district.


Entrepreneurship


Benchmarking

• Demographics

• Employment Indicators

• Investment Indicators

• Housing

• Office Space


• Lodging

• Retail and Services

• Restaurants

• Transportation and Safety

Statistical data assembled in your market analysis can be used

to establish goals and measure progress (benchmarking)

related to the downtown economy.

144

The Report

http://youtu.be/9QElN8oF0WM

Josh Clements [email protected]

Jenny Garner [email protected]

Bill Ryan [email protected]

Questions: Please Contact Us:

Funding - North Central Regional Center for Rural Development (NCRCRD) Seed Grant

mailto:[email protected]



http://ncrcrd.org/

Date post:	14-Jul-2015
Category:	Government & Nonprofit
Upload:	community-development-society
View:	215 times
Download:	1 times

Downtown and Business District Market Analysis

Government & Nonprofit