As US economic and population growth pivots from the suburbs back to cities, the retail industry must re-evaluate how it caters to the wants and needs of today’s urban shoppers. To be successful urban players, suppliers and retailers must integrate three uniquely urban drivers into their traditional operational, financial, and marketing tactics.
- Density: High concentrations of people, services, and ideas
- Specialization: Need for and sustainability of niche services and products
- Choreography: Explicit and implicit coordination of services and people
While “urban” can be defined in countless ways, Kantar Retail is specifically focused on the dense cores of large American cities. These are typically central business districts and their immediate surrounding neighborhoods, which have mixed-use development, apartment-based housing, multiple transit options, and high levels of pedestrian activity.
As cities continue to grow in importance for America’s future success, this month’s Big Idea articulates how cities manifest Kantar Retail’s traditional and unique retail drivers, leading to a new understanding of how retail tactics must be properly calibrated to work in the distinctively urban environment. Not only will success in the urban space help the retail sector align with growing opportunities, but also techniques tested and refined in brutally competitive urban settings will help inform decisions that can lead to greater retail sophistication and productivity across the landscape.
When recalibrating for a retailing environment that focuses once again on satisfying the needs of urban shoppers, Kantar Retail’s fundamental concepts of volatility, connectivity, and polarization help to explain the specifics of the urban landscape.
- Volatility: While urbanites themselves are regularly experienced with unexpected change, cities as a whole have been swifter to recover from the effects of the recession.
- Connectivity: Cities have greater access to wireless, cable, and Internet services, enabling greater productivity and engagement.
- Polarization: Urban regions have higher levels of ethnic and cultural diversity, as well as wider divides between the rich and poor.
However, it’s also critical to examine the uniquely urban drivers that impact cities and the characteristics that change the nature of interactions, lifestyles, and retailing.
- Density: The sheer proximity and concentration of people, services, and ideas fundamentally forces people to make different lifestyle and business choices.
- Specialization: Urban participants, whether individuals or businesses, must clearly define their value and role within the market due to the increased concentration of competition.
- Choreography: Cities require a higher level of coordination between organizations, or individuals, to ensure that daily processes run smoothly.
While underlying drivers in the urban landscape fundamentally change how shoppers live, shop, and work within the urban market, the traditional considerations of product, price, place, and promotion are still critical to urban day-to-day operations. For tactics to resonate with urban shoppers, retailers and suppliers must ensure that each of the urban drivers of density, specialization, and choreography provide the starting point for developing urban-focused strategies.