Online shopping is booming but so is Downtown, due in large part to retail expansion, including 300,000 sq. ft. in the Ice District alone. What, then, will get the neighbourhood’s residents – 40 per cent of whom are Millennials – off Amazon and into stores?
Experts say it’s experiences. The role of bricks-and-mortar locations is changing in the retail world. Storefronts are less points of sale than places to entertain and make customers feel an emotional connection to products or brands.
According to a report by the Downtown Business Association, called The Future of Retail in Downtown Edmonton, Downtown residents value such experiences and frequently seek them out, often for some ‘try before you buy,’ before returning home to their laptops and clicking ‘Proceed to Checkout.’
“We don’t buy things anymore,” says Jimmy Shewchuk, business development, trade and investment manager at Edmonton Economic Development Corporation. “We buy experiences. Even if we are buying things, we’re buying an experience. The concept of selling things out of four walls as a business model, if it’s not dead, is on life support right now.”
The DBA report says this falls into the growth of so-called omnichannel retail, or the integration of online shopping with experiences and entertainment in physical locations.
Shewchuk says global brands like Burberry have been hitting the mark with converting real-world experiences into sales. “That bricks-and-mortar piece is part of their very robust business model that sells online and engages with its fans,” he says.
The new retail experience often starts with social media and continues when a customer enters the store, is greeted by staff as well as some less obvious cues – lighting, music, atmosphere, aesthetic. If the in-store experience is successful, many shoppers still leave empty handed, preferring to finish the transaction from the couch, after reading reviews and comparing prices.
Shewchuk says Downtown has yet to see much of this new trend in its retail environs. That’s likely to change.
“The onus is on a retail location to create that experience and it works kind of symbiotically with a city that’s going to create the greater experience of walking the area,” he says.
The City of Edmonton has invested heavily in downtown revitalization, including public dollars to subsidize parts of what’s become the Ice District. But some locals are raising concerns that area’s focus on entertainment and retail giants is pushing out small businesses.
Glenn Scott, senior vice president of real estate for Ice District Properties, doesn’t share these concerns.
“We’re trying to make it a mix, so people will have the amenities they want to live in our area, in the Ice District, and to work there,” he says. “That’s really what we’re trying to provide, so hopefully we’ll hit all or most of those needs. We’re helping, we’re not hurting.”
Scott cites taxes, a higher minimum wage and competition with Amazon for the reason some retailers in the area are struggling.
Still, the Ice District has a lot of retail space to fill and recently had to redesign one of their yet-to-be-built towers, after a major tenant pulled out, so their ultimate effect on retail in the downtown won’t be immediately clear.
Scott says he’s confident the growing downtown population will have all their needs taken care of.
“There’s going to be thousands more people living downtown which will be a great thing for downtown. It’s got to be a place that can work for everyone,” he says. “West Edmonton Mall kind of created a big hole [downtown] and now there’s a counter trend and I think it’s really exciting for Edmonton.”
– With files from Tim Querengesser
Downtown retail, by the numbers
86 Percentage of downtown residents who say they would like another grocery store in the neighbourhood
20 Percentage that Albertans spend dining out over the Canadian average
11,600 Number of residential units downtown under construction or proposed for the next decade
– Source: DBA