Urban incubators: Fueling accelerated retail growth

Ken Nisch, Chairman, JGAJacques Panis, President, Shinola

Christine Sturch, Midwest Design Coordinator, Whole Foods MarketEric Yelsma, Founder, Detroit Denim Co.

• Dynamic. Retail is critical to vibrant cities.

• Integrated work, live, play create vibrancy.

• Growing urban markets are prime spots for the new retail model “Retail 2.0”

• New faces, hybrids, grass roots & innovative legacy brands are beginning to invigorate urban cores.

What WAS & what HAPPENED

what’s WORKING NOW

what’s NEXT

Retail challenges:

• Growth limited by saturation of

traditional shopping areas

• “Small” is better

• Experience > things

• Over-stored/over-spaced

• Department store relevance

• Legacy brand relevance

Core city retail challenges:

• Fragmented ownership & leasing, marketing

• Convenience, service base, not real shopping

• New millennial, gen-Z & legacy urban base

• Fun/fringe vs. needs & wants

• Physical realities

• Investment--ready to open

• Politics, marketing

Now let’s see what WAS & what

HAPPENED by taking a look at

Detroit…

LATE 1800S & EARLY 1900S

S. S. Kresge

(Kresge’s Kmart)

J. L. Hudson (Hudson’s)

Crowley brothers (Crowley’s)

Ernst Kern (Kern’s)

By 1920

Detroit

became

the

richest

city in

the

world“There were so many

people, you couldn’t

even see the pavement.”

–Detroit Historian Michael Hauser

1934: Shoppers outside of

Detroit’s Kresge’s

1945 – EARLY 1950’s:

●3+ million sq ft of retail space; 300 retailers

●Hudson’s:1.2 million sq ft; $163 million sales

peak ($1.4 billion today)

MID-LATE 1950’s & ON:

●Hudson’s sales fell to $45 million.

●By 1983, all dept stores had closed along with 250

specialty stores.

●Population dwindled from 1.8 million to 675,000.

Detroit’s

retail

resurgence

begins…

adding

500,000+

sq ft of

retail space

New

development

of former

Hudson’s site

in Detroit

began Dec 2017

RECENT DETROIT DEVELOPMENT INVESTMENTS:

• $1 billion New Center/Midtown

• $1.2 billion Olympia/Arena

• $2.2 billion Bedrock

• $1 billion Riverfront

• $1 billion medical/education

Suburbs = “over” retail

Cities = “under” retail

170 retailers & restaurants

in Midtown alone, 65 are

women or minority-owned

30+ retail entrepreneurs

(75% based here),

participated in first annual

Downtown Detroit Markets

pop-up shop hub in 2017

Detroit’s new Nike

Community Store

Hires 80% of its team

from within a 5-mile

radius

Requires staff to

volunteer in the

community

Detroit’s accelerated retail growth is being fueled by:

• Local entrepreneurs & skilled craftsmen aka

MAKERS like Detroit Denim

• Impactful chains aka

CATALYSTS like Whole Foods

• Specialized job creators & industry invigorators aka

PIONEERS like Shinola

Eric D. Yelsma

Founder

DET, MICH

Structure

Brand

Manufacturer

Retailer

History2008 - Got fired

2010 – Incubator in Detroit

2011 - Store created

2016 - Moved

2018 –

2010-2015

A Small Business Owner in Detroit

Q: How did this happen?

Q: How’d it take shape?

Q: How did the city help?

Q: How did you grow?

Q: What does it look like,

how does it end?

Resurgence?Ease of doing business

Many neighborhoodsdeveloping (Downtown, Mid-town, Cork-town, West End, Indian Village, New Center, North End etc….)

Spotlight on city

Plenty of room!

Detroit’s Resurgence!

Why Do Retail?

Customer Experience

Connection

Story

Service

Future

Product Portfolio

Website

New Store

201720 pair/day

2020250 pair/day

20231,000 pair/day

End. Thank you.

Food is Fuel

Source: mapdetroit.blogspot.com

Source: detroitfoodmap.com/

Source: mapdetroit.blogspot.com

Why Detroit?

Future WFM?

Betti

Oran

Dan

Phil

Sue

Detroit

Original location: Austin, Texas 1980

CONSCIOUS

CAPITALISM is…

Becoming more

aware

of the higher

potential of business

and how it CAN be in

this world.

“A business that makes nothing but money is a poor business.” –Henry Ford

Committed over $14 million so far,

committing $25 million.

Over 200 loans Provided

Hired Over 70% from community

Hired Over 70% from community

Asked a lot of Questions

Hired Over 70% from community

Asked a lot of Questions

Had a passionate leader

Hired Over 70% from community

Asked a lot of Questions

Had a passionate leader

Connected with Community

Opening Day in Detroit, June 2013

Partnered with 40 cities across U.S. since 2014

LET’S RECAP…WHAT’S NEXT?

RETAIL 2.0:• Urban, under-retailed markets

• Concentrated ownership/landlord control

• “Subscription” style

• Co-working spaces

• Live/Work

• Hybrid

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