DDi - October 2011 - (Page 48)

48 | Shopping with Paco Urban big box L ast week, I visited the new Duane Reade drugstore at 40 Wall St. in downtown Manhattan with a reporter from Bloomberg Businessweek. The store sits across the street from Tiffany & Co. and is an easy stone’s throw from the New York Stock Exchange. It occupies a second-story location in yet another building branded as the Trump-something. Tall banners on the outside announce the store’s presence; you enter through an elegant series of glass doors, then go up an escalator into a high-ceilinged space that must have once been an elevator lobby. Gothic arches and soaring windows bring you far away from the grubby urban pharmacy most of us city types are used to patronizing. This drugstore has a sushi bar, hair and nail salons, a fresh food offering and a beauty product sales floor with a mix of new swishy brands beyond the old Revlon and L’Oreal products the drugstore shopper has come to expect. This is no big box, but a series of connected chambers—sushi bar at one end, salons at the other. I can’t imagine what the hygiene, much less smell issues, might be during the lunchtime and after-work rush. The banners do a poor job of announcing the store to the throngs of midday tourists, and a portion of the shelving is under-merchandised as if the store was not ready to commit to inventory, or scared of the shrink. That said, it is still a noble experiment and an attractive store. The company’s owners report that since opening mid-summer, the location has enjoyed brisk sales and has generated very positive customer reviews. Wall Street during the working day has the highest population density of any spot in North America. Driven by the opening and closing bell of the financial markets, this particular population moves at an accelerated clip. People want to get in and out, and most importantly, they want to transact with alacrity. Historically, it was a tough place for retail. The streets are either full or empty, and Wall Street on the weekend looks like the set for a post-apocalyptic movie—the sidewalks are filled only with trash, pigeons and rats (the four-legged type). Until 10 years ago, downtown was a noman’s land whose only residents were a few brave artists. That was then; this is now. Downtown Manhattan has come a long way. The area is now enjoying a housing boom, as developers convert B-class office buildings into luxury apartments. For the building owners, it makes sense. Wall Street is shedding and moving jobs, and B-grade offices can be turned into A-grade housing. It is a “kewl” place to live. However, there is a dearth of services, as well as parks and playgrounds, and it’s a hike to get to a supermarket. No wonder the new Duane Reade is prospering. The modern-age, urban, general-merchandise store works if it is backed up with an effective supply chain and serves a captive market that doesn’t care about the premium prices. Almost every big-box chain in North America is either talking about, or trying out, urban prototypes. It is, for American retail, the last unexploited customer base. It’s hard to appreciate that most New Yorkers and other American city dwellers have never been in a Walmart, have no idea what a Kroger is and are deeply puzzled that the only Nordstrom name in the city is a distinctly down-market Nordstrom Rack on 14th Street and Fourth Avenue. Just like in retail, the ingredients of the successful urban big box are simple: the right mix of product, people, promotions and perhaps, most importantly, placement. —Paco Underhill is the founder of Envirosell and author of the books “Why We Buy,” “Call of the Mall” and “What Women Want.” He shares his retail and consumer insights with DDI in a bi-issue column. | October 2011 www.ddionline.com http://www.ddionline.com

Table of Contents for the Digital Edition of DDi - October 2011

DDi - October 2011