Well, I Got That One Wrong

KEVIN COUPE FOUNDER MORNINGNEWSBEAT.COM

Hence, this column.

In recent years, in speeches and my day job writing MorningNewsBeat, I’ve largely bought into an argument made by demographers and sundry experts about the urbanization of America. The argument went like this: Cities are a magnet for innovation—in business, technology, finance, culture, retail, entertainment and food. Young people hunger for such innovations. Young people also are getting married later and having fewer children. Therefore, young people don’t have to move to the suburbs and can stay in the city, where they will occupy smaller abodes than they might have in the past. They also won’t need to own their own cars (the Uber app being on all of their smartphones), and won’t need to go to large, suburbanstyle supermarkets and other retail entities as much. Therefore, traditional retailers— especially, but not limited to supermarkets— need to rethink their long-term strategies and realign them so they can cater to an urban consumer with different needs and desires.

All of which sounded great. Even made sense. Now, I may have bought into this to an even greater extent because while I am by no means young, I shared some of those priorities—having spent almost all of my life living in the New York and Connecticut suburbs (interrupted only by my education at Loyola Marymount University), I was ready to move to a west coast city (Portland or Seattle) and become a late-in-life urbanite.

They discovered that having more space was better than less space. And while the end of the pandemic has meant some adjustment of those work-life priorities, the basic shift that took place seems to have taken hold.

Here’s a number for you: 45 percent of millennials expect to buy homes in the suburbs.

Simultaneously—some of it is correlation and some of it is causation—many cities have found themselves in an increasingly precarious spot.

People who lived in the suburbs no longer commuted to the city; they worked from home and suddenly prioritized work-life balance to a greater degree than ever before.

Crime is the problem we hear the most about, driven by homelessness and the fentanyl epidemic. But there are other forces at work, as well, such as too many stores, not enough workers, too-high rents, the impact of e-commerce. It then becomes a Gordian knot of complications, increasingly difficult to untie, causing people and retailers to leave the city, which creates a flywheel of problems almost impossible to stop. Crime festers because criminals have a sense of when the social order is breaking down— it is called opportunity.

Suddenly, you have Whole Foods closing down a store in downtown San Francisco that only has been open a year. You have a nearby Nordstrom flagship store being shuttered. And when people look up “dystopian hellscape” online, they almost expect to see a picture of Coit Tower.

will be able to step into the breach and help breathe new life into urban neighborhoods. But that will require thinking differently about city streets and neighborhoods.

A recent CNN story cited urbanist Jane Jacobs’ influential 1958 essay ‘Downtown is for People,’ in which she argued a vibrant

In other words, a retail environment that is more responsive and less restrictive and static.

I don’t think that a changed urban landscape is all that retailers need to think about, though. I continue to believe that even the young people (or older people like me) who have decided not to move to the city are going to want and need urban-style amenities. Where I live in Connecticut, a local developer name David Genovese is in the middle of building something that I think of as an urban oasis in the middle of a resolutely suburban village. The idea is create a vibrant and concentrated sense of community out of retail and hospitality options in a way that will appeal to those with an urban bent. I think it is very smart, and even though it is only about one-third built at this point, you already can feel the energy.

But at the risk of being wrong again, I want to be guardedly optimistic about the moment and point out that there may be an opportunity here for retailers as well.

Let’s stipulate, just for the sake of discussion, that renewal depends on cities being able to figure out how to deal with crime. Me, I’ve always believed in the approach to criminal justice espoused by William Bratton, the former police commissioner for New York City and Chief of Police in Los Angeles. He called it a “broken windows” approach that stressed “quality of life”—if you crack down on small crimes such as panhandling, disorderly behavior, public drinking, and street prostitution, inevitably smalltime criminals would not move on to commit bigger crimes. (He was the NYC police commissioner for just two years, and during that time felonies dropped by almost 40 percent and homicide rates were cut in half. I think that in retail terms this is called ROI.)

If this all can be figured out and the right lessons from Bratton’s tenures applied, then retailers will have a moment in which they street life was crucial for neighborhood safety and community. She wrote:

“It is this model, focused on the vitality of the streets and the people who inhabit them, that’s needed to create lively and exciting communities and shopping areas.

“Streets could be blocked to cars on weekends and other hours. Cities can also host street fairs, food festivals, live music, art exhibits and other events to draw foot traffic downtown … If the future of shopping is not giant department stores, a wider mix of stores will be needed to make downtowns more appealing.

“Traditionally, retail landlords seek out the longest leases. But that makes it difficult for new stores to open.

“Cities can provide financial incentives to encourage landlords to offer temporary and more flexible leases and loosen regulations to speed up the permitting process for them.

“This will allow for pop-up stores, seasonal retailers and a mix of food and drink vendors.”

As demographic changes evolve—and nothing happens overnight—it will be critical for retailers, including (and especially) grocery stores, to evolve their own offerings, thinking about a different kind of suburban customer who may be seen as something of a hybrid, and needing a store that fuses elements of what they always have done with innovations that reflect some urbanized cross-breeding. It may mean better and more specialty foods. It likely will mean an expedited approach to delivery. It almost certainly will require a more targeted and customized approach to marketing. Maybe, in the long run, it is not cities that are a magnet for innovation. Maybe it is people who are—and who will respond to and reward retailers who don’t think about them as the same old customer base, but in fact see their needs and desires as requiring a retail approach that is less restrictive and more responsive. ■