1、June 20232023s Top RegionalRetail HubsDiscover four metro areas where retail is thriving despite thewider macroeconomic challenges and find out the uniquefactors driving success in each region.Table of ContentsTable of Contents2Retail is Rallying31.New York,NY:Resurgence of Retail Visits with the Re

2、turn to Office42.San Jose,CA:Upscale and Luxury Retailers Attract the Right Customers83.New Haven,Bridgeport,and Hartford,Connecticut:New Residents Lead to Surgesin Home Improvement Retail114.Washington,D.C.:DTC Brands and Retailers Seizing Opportunities to Captivate aYounger Audience15Final Thought

3、s18Key Takeaways18Retail is RallyingThe retail segment has experienced a dramatic few years.Visits to stores spiked in thesecond half of 2021 as shoppers engaged in revenge shopping but the rally wasshort-lived as the Omicron wave of early 2022 followed by record gas prices andsubsequent inflation h

4、ampered the burgeoning recovery.Still,consumer demand forin-person shopping remains strong although foot traffic data indicates thatbrick-and-mortar retail performance in 2023 exhibits significant regional variations.This white paper takes a closer look at four regions that exhibited strongyear-over

5、-year(YoY)retail growth between January and May 2023 to see whatsdriving their recovery.We analyzed three CBSAs(core-based statistical areas)NewYork-Newark-Jersey City,NY-NJ-PA;San Jose-Sunnyvale-Santa Clara,CA;andWashington-Arlington-Alexandria,D.C.-VA-MD-WV as well as one region consisting of 2023

6、 Placer Labs,Inc.|More insights at placer.ai|2three additional CBSAs(the New Haven-Milford,Bridgeport-Stamford-Norwalk,andHartford-West Hartford-East Hartford CBSA).The analysis leverages locationintelligence to explore what the office recovery means for local businesses,wherevalue-priced chains are

7、 succeeding,and how an influx of newcomers is boostinghome improvement stores.The report also reveals where luxury shopping is thrivingand how student populations can help drive brand awareness and growth.Read on to discover what is helping these four regions thrive and how locationanalytics can hel

8、p retailers tap into this success for their own cities.2023 Placer Labs,Inc.|More insights at placer.ai|31.New York,NY:Resurgence of Retail Visits with theReturn to OfficeManhattan is the heart of the New York-Newark-Jersey City,NY-NJ-PA CBSA,capturingabout a quarter of retail visits in its CBSA.And

9、 although the city was hard-hit by thepandemic with many speculating that the Big Apple was“over”Manhattan hasmade a strong comeback.Foot traffic data so far into 2023 reveals that YoY visits to Manhattan offices havesurpassed the nationwide average.This recovery,impressive in its own right,alsoseem

10、s to be helping drive retail visits up.May 2023 visits to retailers in the New YorkCBSA were down just 5.4%YoY,compared to an 8.2%YoY drop in retail visitsnationwide.Looking at the performance of specific Manhattan retail corridors(high street areaswith a high concentration of shops)further emphasiz

11、es Manhattans strength.May2023 visits to Times Square&42nd Street,North 5th Ave.,and the Flatiron retail 2023 Placer Labs,Inc.|More insights at placer.ai|4corridors were 12.8%,10.2%,and 13.8%higher than in May 2022,compared to just a1.7%YoY visit increase in nationwide retail corridor visits.The cor

12、relation between increased office occupancy and retail visits helps illustratewhy a return to in-person work has been a priority for many cities.Office foot trafficcan drive consumer spending,helping prop up both small and large businesses.Zooming in on the Flatiron Retail CorridorThe Flatiron retai

13、l corridor,named for its iconic building,is home to a wealth of shopsand office buildings.As workers returned to their offices full-time or in a hybridmodel visits to local businesses followed.A closer look at office buildings surrounding the Flatiron neighborhood highlights thesymbiotic relationshi

14、p between offices and retail visits.The retail corridor saw visitsincrease by 24.3%YoY between January and May 2023,and the office buildingssurrounding the area also experienced impressive foot traffic growth.2023 Placer Labs,Inc.|More insights at placer.ai|5Diving deeper into the visitor journey da

15、ta for select Flatiron businesses furthersupports the connection between return to office and local retail performance.January May 2022 and January-May 2023,the Flatiron retail corridor as a whole,aswell as several stores within it,saw an increase in the share of visitors coming fromwork.As more emp

16、loyees return to in-person work,local businesses can once againrely on lunchtime or post-work visits to help drive sales and improve growth.2023 Placer Labs,Inc.|More insights at placer.ai|6Manhattans retail and office recovery reveal the important role that office blocks playin supporting local est

17、ablishments.2.San Jose,CA:Upscale and Luxury Retailers Attractthe Right CustomersOn the West Coast,the San Jose-Sunnyvale-Santa Clara CBSA is thriving.The CBSA,nestled within the tech-heavy Silicon Valley,has seen its consumer activity remainstrong during economic uncertainty.So far into 2023,shoppi

18、ng centers in the CBSA outperformed their counterpartsnationwide and within California on a YoY visit basis,suggesting that there issomething in the valley keeping visits up.2023 Placer Labs,Inc.|More insights at placer.ai|7A closer look at shopper demographics suggests that people frequenting these

19、shopping centers come from higher-income trade areas than visitors to otherCalifornia retail destinations.Between January and May 2023,44.4%of the tradeareas of San Jose-Sunnyvale-Santa Clara CBSA shopping centers consist of censusblocks where the median HHI is over$200K/year.In contrast,during that

20、 sameperiod,only 24.7%of trade areas of shopping centers in California consisted ofcensus blocks with that HHI,and most 27.5%fell into the$50K to$100K/yearbracket.2023 Placer Labs,Inc.|More insights at placer.ai|8Perhaps unsurprisingly,then,high-end retailers are thriving in the region.Brands likeTe

21、sla,Williams-Sonoma,and Burberry are seeing impressively high YoY visits,particularly when put in context with the wider retail performance in California.Visitsto Williams-Sonoma and Burberry decreased YoY by 2.3%and 3.4%,respectively,between January and May 2023 in California as a whole,but grew in

22、 the SanJose-Sunnyvale-Santa Clara CBSA.Similar patterns repeated across other luxurybrands examined,indicating that these brands have set up within reach of a receptiveaudience.2023 Placer Labs,Inc.|More insights at placer.ai|9The retail strength of the San Jose-Sunnyvale-Santa Clara CBSA highlight

23、s howunderstanding the spending capabilities of a given region and catering to that nichecan lead to strong retail growth.3.New Haven,Bridgeport,and Hartford,Connecticut:New Residents Lead to Surges in Home ImprovementRetailConnecticut became a go-to destination for New Yorkers during the pandemic.D

24、espite a slight decrease in population from its peak in June 2022,the number ofresidents within the New Haven-Milford,Bridgeport-Stamford-Norwalk,andHartford-West Hartford-East Hartford CBSAs was up by 1.2%in April 2023 comparedto March 2019.Today,these three metro areas,collectively considered here

25、,areseeing some of the strongest retail performance in the country.2023 Placer Labs,Inc.|More insights at placer.ai|10The counties of Fairfield(Bridgeport),Hartford,and New Haven are also seeing aninflux of newcomers from areas with higher median home values.An analysis ofZillows housing data layere

26、d onto Connecticuts population change reveals a patternof higher-income homeowners moving into more affordable areas.Among the topnine origin counties,only one Hampden County has a lower median home value($305K)than its destination,Hartford County,where the median home value is$385K.2023 Placer Labs

27、,Inc.|More insights at placer.ai|11The combination of the shift from higher to lower HHI area and from areas morelikely to see home rental than home ownerships indicates that these newcomerslikely sold their higher-priced homes in their origin counties,and purchased new,more affordable homes in Conn

28、ecticut leading to an increase in disposable incomeavailable to spend at local retailers.And with a new house comes the motivation toundertake various home improvement projects so,unsurprisingly,visits to localhome improvement stores jumped along with the population.Comparing home improvement foot t

29、raffic data to a March 2019 baseline of zeroreveals a surge in visits to stores like Harbor Freight Tools and Ace Hardware.Andwhile visits have moderated since 2021 when counties first saw the major influx innewcomers and home improvement visits spiked nationwide they still remainsubstantially and c

30、onsistently higher than they were in March 2019.2023 Placer Labs,Inc.|More insights at placer.ai|12The impact of these wealthier newcomers extends beyond the rise in foot traffic tohome improvement stores.Analyzing the trade areas of home improvement retailersreveals that the median HHI in the trade

31、 areas of three out of the four major chains inthe three CBSAs analyzed increased between Q1 2022 and Q1 2023.2023 Placer Labs,Inc.|More insights at placer.ai|13The domestic migration to Connecticut and subsequent increase in homeimprovement visits and trade area median HHI highlights the positive i

32、mpact thatnew residents can have on a regions retail.4.Washington,D.C.:DTC Brands and Retailers SeizingOpportunities to Captivate a Younger AudienceDiving into the retail data for the Washington-Arlington-Alexandria,D.C.-VA-MD-WVCBSA reveals that Washington,D.C.is becoming a magnet for direct-to-con

33、sumer(DTC)and digitally native brands(DNBs).DNBs typically establish their presencethrough online platforms,with some making the leap from digital to physicalstorefronts.And the Georgetown neighborhood in the nations capital has emergedas an ideal location for these brands to test the waters of a br

34、ick-and-mortar formatbefore expanding their presence to other cities.2023 Placer Labs,Inc.|More insights at placer.ai|14Georgetown is home to the eponymous university and a vibrant community of youngstudents and professionals.And perhaps unsurprisingly,the area around theuniversity(depicted in light

35、 yellow)skews younger than other D.C.neighborhoods.This demographic composition creates an attractive opportunity for DNBs to establishtheir presence,as they can tap into a population of Internet-savvy students who areenthusiastic about exploring the physical stores of a favorite online brand.2023 P

36、lacer Labs,Inc.|More insights at placer.ai|15Another benefit to establishing an experimental brick-and-mortar location in aneighborhood like Georgetown is that many of the residents are transient.Withconsumers under the age of 40 tending to prefer brands with a strong omnichannelpresence,DNBs can ef

37、fectively target a cohort that is particularly receptive to theirproducts.And since many of the areas shoppers are students who come to the cityfor a few years and move on taking their brand preferences with them theinvestment in Georgetown stores can boost these brands long-term nationwideperforman

38、ce.And aside from its role as a DNB launching pad,the Georgetown area experiencedimpressive YoY growth in retail visits,especially among brands popular with youngeraudiences,like Urban Outfitters(7.0%),Outdoor Voices(17.6%),and Dr.Martens(11.5%).Popular DNBs Warby Parker and Everlane also showed vis

39、it growth,withvisits up 30.1%and 25.0%,respectively,for the two companies.2023 Placer Labs,Inc.|More insights at placer.ai|16Younger consumers are a crucial demographic for retailers to capture,and brandsthat can establish themselves in student-heavy areas will be well positioned tocontinue leveragi

40、ng a growing preference for omnichannel retail.Final ThoughtsWhile the retail world has faced significant challenges in recent years,plenty ofregional bright spots abound.From a symbiotic office-retail relationship to theimportance of placing affordable and high-end chains where they are welcomed,ad

41、apting to local needs and preferences can drive retail success.Key Takeaways1.The Return To Office Helps Local Businesses Thrive:The return to officemay have slowed,but New York City offices are seeing some of the strongestrecoveries and retail visits are following suit.2.San Jose Shoppers Drive Lux

42、ury Sales:High-income San Jose has beendriving visits to its shopping malls and luxury stores.Meanwhile,visits to thesecategories in California and nationwide are lagging behind,demonstrating theimportance of setting up shop near a receptive audience.3.Population Shifts Leading To Retail Growth:An i

43、nflux of new residents intoConnecticut during the pandemic has led to significant foot traffic growth forhome improvement stores.This surge highlights the positive effects that newpopulations can have on local businesses.4.Georgetown Attracts Younger Shoppers:The Washington,D.C.neighborhood attracts stores that cater to younger shoppers.The numerousdigitally native and DTC brands that have opened locations in the area mayfind that Georgetowns transient student population is receptive to theirofferings.2023 Placer Labs,Inc.|More insights at placer.ai|17