Downtown retailers received a rollicking lesson in marketing Thursday morning and the reasons why — gasp — allowing big box or chain stores just might enhance Missoula’s core.
Along with the positive aspects of allowing national chains in downtown Missoula, consultant Bob Gibbs’ two-hour presentation touched on a wide range of topics, including the need for “man chairs” in some stores, why parking meters are good but parking kiosks can harm the downtown core and how the psychology and sociology that the larger retailers use can translate to small shops.
His ideas are part of this week’s efforts to update Missoula’s 10-year Downtown Master Plan, which will culminate with a presentation from 4 to 6 p.m. Friday at The Wilma. However, Gibbs is on retainer through the Downtown Missoula Partnership for the next six months to help local businesses with strategies.
“You have to put in what your values are, and be open minded about it," Gibbs said. “We’re doing a shopability study and when it comes out there may be things that you don’t like. But we will tell you stupid little things you can do to increase sales. You won’t probably like what I say, but it will be there.”
Using a mix of dry humor and statistics, Gibbs praised Missoula for its combination of businesses, restaurants and retailers in the downtown core, as well as its “walkability.” He noted that the funkiness and grunge look is what attracts 26- and 27-year-old millennials, who currently are the largest population segment. But they’d also rather spend money on experiences than on $200 jeans.
Flashing an advertisement on the screen behind him for a $12.95 dress from H&M, Gibbs said millennials will purchase the dress even if it falls apart after being washed three times. Yet that kind of chain store, housed in a small, funky downtown retail shop instead of at a mall, can increase traffic flow that could result in increased sales for existing businesses.
“When they buy things, they buy cheap,” Gibbs told about 30 downtown business owners Thursday morning. “It’s kind of sad that they (H&M) went to the mall, although Southgate Mall is one of the best I’ve seen. But I wish they came downtown, bringing thousands and thousands of millennials with them.”
He noted that large retailers like Apple, Target and even Wal-Mart are transitioning away from box stores and malls, returning in smaller, hipper versions to multi-level downtown stores that can attract about 3,000 people per day. The ripple effect for nearby businesses is reminiscent to the pre-1960s, before malls were in vogue.
“Until 1960, 80 percent of every dollar spent in the country was spent downtown,” Gibbs said. “Downtowns sold cars, groceries, furniture … you had the five and dime store, which is a glorified Dollar Store. National chains like Sears Roebuck, Thom McAn, JC Penney were downtown in the center of commerce. They were gentrified box stores.”
Missoula’s beloved Mercantile was a Macy’s box store. Gibbs said an estimated 25 percent of existing malls are expected to be shuttered by 2022, asserting the only people who like them are between 9 and 11 years old. That gives downtowns an opportunity to pick and choose what stores they’d like to welcome home.
“The Merc was the same size as a small Costco, Kohls, a small Wal-Mart and small Target,'' he said. "If a Merc were proposed today, would you go for it?”
Cities have the ability to choose the brands and work with those retailers, he added, noting how Trader Joe’s, Crate and Barrel, Banana Republic, Gap and Williams Sonoma all are popular in some downtown communities. Incorporating them into downtowns can help prevent sprawl, cut down on traffic, and return cores to the center of commerce. They shouldn’t, however, be more than 10 to 15 percent of downtown retailers.
“Department stores can increase retail sales by 33 percent,” Gibbs said. “When you lost the Merc, people told me business went down. Grocery stores can increase sales by 25 percent for most retailers, and if not a grocery store, maybe a public market where they sell fish or cheese, like (Seattle's) Pike Place Fish Market. Those are wonderful for downtowns, and people love it.”
He added that restaurants only increase retail sales by 5 percent since people are sitting down to eat rather than shopping, and parks increase sales by only 2 percent since “people who go to parks are kind of cheap and don’t shop.”
Festivals can decrease retail sales by 10 percent because regular customers avoid the area during the event.
“Restaurants can increase retail rents by 15 percent, and that’s not good,” Gibbs said. “Too many restaurants can put you out of business.”
Gibbs presentation on the positive impact of some chain stores and the small, inexpensive steps retailers can take to increase sales met with an upbeat reaction from many of the downtown retailers who attended Thursday’s meeting. Both long-time Hip Strip business owners Aimee McQuilkin of Betty’s Divine and Katie Ghen-Simpson of Bathing Beauties Beads sit on the Missoula Downtown Association board, and took numerous notes.
“It was refreshing to hear an honest viewpoint about things we can do affordably for small businesses,” said Ghen-Simpson. “I like the fact that he talked about the need for box stores, but it wasn’t the number one focus for downtown, but is one thing that can help all of the local businesses increase sales.
“There are national retailers that could fit in some spaces.”
McQuilkin added that it made her feel that Missoula won’t lose its soul.
“Hearing about national chains being anchors for downtown makes me nervous, but I’m confident we can bring in those stores and our small retail stores can still compete with them,” McQuilken said. “We can do this right.”