12 Ways to Expand Your Sales Tax BaseC. Kelly Cofer, CEO - The Retail Coach 2012 Spring/Summer Conference | June 12Washington Economic Development AssociationSpokane, Washington

ABOUTTHE RETAIL COACH

We develop and execute high-impact retail recruitment and retention strategies

From start to finish: retail recruitment is The Retail Coach’s only focus.

C. Kelly CoferPresident & CEO

Aaron FarmerVice President

Austin FarmerRegional Project Director

CONSUMER CONFIDENCE HITS THE HIGHEST LEVEL IN OVER FIVE YEARS IN MAY 2012!

Highest level since October 2007, according to the Thomson Reuters/University of Michigan. The index rose increased to 79.3 from 76.4 the prior month.

Decline in gas prices and an improving housing market is helping offset slower job growth and volatile stock prices.

Source. www.retailingtoday.com

NATIONAL IMPACT OF RETAIL• 24% of jobs in the United States are directly or indirectly supported by retail• 2.5 Trillion: Retail’s total impact on America’s GDP

Source. www.retailmeansjobs.com

IMPACT OF RETAIL FORWASHINGTON STATE

71,939 Retail Establishments

602,477 Direct Retail Employment

881,938 Total Retail Employment Impact

$18,162 Direct Retail Labor Income ($million)

$33,402 Total Labor Income Impact ($million)

$29,621 Direct Retail GDP ($million)

$56,782 Total Impact GDP ($million)

Source. www.retailmeansjobs.com

RETAIL MEANS JOBS INWASHINGTON STATE

17%Retail’s total impact on

Washington's GDP

1 in 4Washington jobs are supported by retail

Retail supports

881,938jobs in Washington

Retail directly & indirectly generates

16%of labor income in Washington

Source. www.retailmeansjobs.com

Washington Retail Trade Association is aggressively seeking retail sales tax fairness with online retailers, many of whom do not collect sales tax.

• Affects brick-and-mortar site's ability to compete• Affects retail industry's job creation

Source: www.retailassociation.org

WHAT CAN YOU DO IN YOUR COMMUNITY?

12 WAYS TO EXPAND YOUR SALES TAX BASE

LOOK AT YOUR COMMUNITY THROUGH THE EYES OF A RETAILER, DEVELOPER AND/OR INVESTOR#1

FIRST IMPRESSIONS ARE IMPORTANT

Retailers look to minimize risk and maximize profit.

- Community appearance- Pride of ownership  (residential and commercial)- Functional infrastructure- Evidence of crime- Codes and code enforcement- Downtown vitality

#1

RETAILERS ARE LOOKING FOR OPPORTUNITIES – NOT JUST SITES

Understand the retailer’s essential location factors:

• Visibility• Accessibility• Regional exposure• Population density• Population growth• Operational convenience• Safety and security• Adequate parking• Adequate signage

A location/site must have each factor in order for a retailer to be successful. #1

RETAILERS WANT TO LOCATE IN COMMUNITIES THAT OFFER RESIDENTS EVERYTHING

• Downtown district• Business activity• Commerce• Social life• Entertainment

#1

KNOW YOUR COMPETITION

Know your competing communities’ advantages and disadvantages

Know the location of their retail submarkets

Be familiar with their retail recruitment programs

Know how your community stacks up against competing communities in terms of socioeconomic factors

#2

KNOW YOUR COMPETITION

Have an understanding of what incentives communities your size are offering retailers and developers. 

Be careful about entering the incentives game.

#2

Know your advantages and understand your challenges.

Address challenges by coming up with an actionable “to do” plan based on priority.

Retailers, developers and/or investors want to know that something is being done.

Retailers, developers and/or investors look for stable or improving communities where their risk is minimized.

PERFORM A SWOT ANALYSIS OF YOUR COMMUNITY FROM A RETAILER’S PERSPECTIVE

#2

KNOW YOUR RETAIL TRADE AREA#3

RETAIL TRADE AREA DYNAMICS

A Retail Trade Area is the largest distance consumers are willing to travel to purchase retail goods and services. 

The size depends on the variety of goods and services offered in your community and proximity to retail in nearby competing communities.

#3

RETAIL TRADE AREA MUST BE ACCURATE

An accurate Retail Trade Area is the foundational tool for a retail recruitment strategy.

Make certain it is accurate by:

Meeting with or interviewing retailers

Interviewing survey customers

Confirming with license plate survey

#3

Market your community to retailers and real estate developers as a Retail Trade Area population, not a community population. 

RETAIL TRADE AREA MARKETING

#3

Primary Retail Trade Area Consumers who are likely to shop in your community more than once per week (where retailers derive approximately 80 – 85% of their business).

Secondary Retail Trade Area Consumers who are likely to shop in your community once per week, or once every two weeks (where retailers derive approximately 15 - 20% of their business).

RETAIL TRADE AREA PRIMARY AND SECONDARY

#3

KNOW YOUR DEMOGRAPHICS#4

Have knowledge of your “area” daytime employment and recognize the importance to restaurants.

Restaurants must have healthy dinner and lunch business in order to be successful.

DEMOGRAPHICS DAY AND NIGHT

#4

Psychographics and lifestyle segmentation have become increasingly important to retailers as they seek to perfect the site selection process. 

 

KNOW YOUR PSYCHOGRAPHICS#5

THE RETAIL ECONOMIC IMPACT OF COLLEGE STUDENTS

Conduct a student survey to identify:

Primary source of income

Purchasing habits/frequency% of purchases in/near campus

Retailer-type preferences

Specific retailer preferences

Monthly retail expenditures

#5

KNOW HOW MUCH RETAIL OPPORTUNITY EXISTS#6

Consider highest and best use of existing properties and developments, as well as green field sites.

RETAIL OPPORTUNITY IDENTIFIES LAND USE

#6

Make certain that all real estate brokers, developers and investors use the same market information.

• Retail Trade Area • Retail Trade Area population• Demographics• Psychographics• Retailer gap information• Traffic counts

Eliminate confusion and minimize questions.

DEVELOP MARKETING AND FEASIBILITY STUDIES#7

Have a current aerial photograph of your community and surrounding area highlighting:

• City limit and ETJ boundaries• Major thoroughfares• Major retailers/developments• Planned/platted residential developments• Schools/universities• Planned/proposed roads• Parks, hospitals• Major employers/business parks

PRESENT A CLEAR IMAGE

#7

BE READY TO SEND INFORMATION IMMEDIATELY

Upload all retail information on your website and make certain it is accurate, current and easy to find.

This is becoming more and more important. 

Retailers and developers may visit your community without your knowledge. 

#7

REACH OUT TO RETAILERS#8

Goal: Get the retailer to the community.

Have knowledge of sites that may interest the retailer prior to making the call.

SELL YOUR COMMUNITY FIRST, THEN SELL THE SITES

#8

THE IMPORTANCE OF ALCOHOL SALES TO RESTAURANTS

Moral issue or economic development issue?

Extremely important to restaurant recruitment

Alcohol sales: 10-20% of a restaurant’s total sales

Potential economic impact is significant

#8

REACH OUT TO DEVELOPERS#9

Smaller communities must work harder to attract attention

Do not abandon downtown

Maintain strong residential support around downtown

Have a downtown redevelopment strategy

Downtowns have become entrepreneur-driven

Entrepreneurism increases during economic downturns

THE IMPORTANCE OF DOWNTOWN DEVELOPMENT

#9

Know the real estate brokers and developers who are active in your area:

Have in-house broker functions

Make it easy for brokers: they are transaction-oriented

Consider a bus tour to showcase properties

WHO YOU KNOW MAKES A DIFFERENCE

#9

Create a target list of those retailers you would like to meet and set up appointments 60 days in advance

Make new contacts with retailers expanding into your area and nurture the relationships

BE SEEN AT ICSC EVENTS#10

Have a minimum of two people at the show; one person to attend the booth and one to seek-out prospects

Have a strategic plan for making new contacts

Set up appointments

Have attainable goals and realistic expectations

GO IN WITH A PLAN

#10

ICSC Next Generation Program & Reception20 June, 2012Spokane, WA

ICSC Pacific Northwest Idea Exchange 1-2 August, 2012Stevenson, WA 

KNOW ABOUT UPCOMING EVENTS

#10

Understand your community’s retail recruitment and retention potential and work to manage the expectations of your board and the community.

Confidentiality among staff and board members is important.

MANAGING PLAN EXPECTATIONS

#10

Have a retail retention program. Network with retailer managers as often as possible. They can be your best ambassadors when prospective retailers are in your community.

- Drop-in regularly- Schedule breakfasts- Invite them to retreats and board meetings- Appoint to committees/board positions

ENGAGE AND EMPOWER EXISTING RETAILERS

#10

COMMUNICATE YOUR PLAN WITH ALL STAKEHOLDERS

COMMUNICATE YOUR PLAN WITH ALL STAKEHOLDERS#11

Articulate your community’s retail strategy to everyone, everywhere.

Make certain independent businesses understand the overall strategy and how they fit in. Make every attempt to get their buy-in. 

Rule of Thumb: “If they are not in on it – and up on it – they will be down on it.”

Retail Recruitment is a Process and Retailers Must be Recruited

Be persistent – a “no” today might be a “possible maybe” in six months.

FOLLOW UP, FOLLOW UP, FOLLOW UP#12

1. Look At Your Community Through Their Eyes 2. Know Your Competition3. Know Your Retail Trade Area4. Know Your Demographics5. Know Your Psychographics6. Know How Much Retail Opportunity Exists7. Develop Marketing And Feasibility Studies8. Reach Out To Retailers9. Reach Out To Developers10. Be Seen At ICSC Events11. Articulate Your Plan With All Stakeholders12. Follow Up, Follow Up, Follow Up

12 WAYS TO BUILD YOUR COMMUNITY’S SALES TAX BASE

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