By Richard Chapman (Originally published in the October/November 2017 issue of the Kern Business Journal)
A community’s retail offerings are becoming an increasingly key element of the site selection process for companies considering relocation or expansion. “Quality-of-place” factors are of significant value for millennials and baby boomers alike (and everyone in between). As cities ramp up their efforts to enhance their retail infrastructure, Kern County’s portfolio is beginning to yield impressive returns.
Currently, 34,000 people in Kern County are employed by the retail trade industry. According to the Bureau of Labor Statistics, the Bakersfield MSA ranked 1st in California and 15th in the U.S. for retail employment growth from 2007-2017. (Over the last ten years, the restaurant industry grew at a strong annual rate of 7.8% in Bakersfield, and apparel sales grew at a brisk 6.5% annual rate.) Bakersfield ranks sixth in California for retail sales, despite being the ninth-largest city in the state.
The sector’s robust growth has been spurred by large-scale projects including the Outlets at Tejon and The Shops at Riverwalk. In addition, several new lifestyle centers are in the works throughout the county, including the 250-acre Bakersfield Commons and the redevelopment of East Hills Mall.
From an economic impact perspective, 100 retail jobs translates into over $13 million in annual sales and $4.5 million in wages (Bureau of Economic Analysis). As a result, many Kern County communities–equipped with detailed trade-area data and ready-to-go sites–are actively recruiting retail interests at industry conferences such as the International Council of Shopping Centers (ICSC) events. In 2017, ICSC hosted the “World’s Largest Industry Convention” in Las Vegas with an estimated attendance of 37,000 and 1,200 exhibitors.
A recent industry phenomenon is the “blurring of the lines between retail and leisure.” Restaurants and other retailers now co-exist in harmony with farmers markets, art shows, and live-music events. These unique experiences serve as an alternative to the online transactional option.
▪ Z-Generation Emerges
Several years ago millennials overtook Gen Xers as the largest segment of the workforce. Gen Zers, born between the mid-1990s and mid-2000s, are now emerging as a powerful buying force. A recent study by the National Retail Federation and IBM’s Institute for Business Value found that Generation Z consumers hold $44 billion in buying power. These individuals are “digital natives” who do not remember what life was like before 24-hours-a-day internet access was available. However, 67 percent of this age group prefer the brick-and-mortar experience “all of the time” and 31 percent to want to shop in person “some of the time.”
▪ Store Size Tailored to the Client’s Needs
Concepts like “toe print” (a very limited market presence)” and “the paradox of (too much) choice” are now becoming part of the industry lexicon. Nordstrom recently announced that its Nordstrom Local concept would test a 3,000-square-foot “try-and-buy” concept that would include wine, beer, and gourmet coffee options. Store employees will provide curated assistance that will produce customized clothing offerings to be delivered within several hours. In today’s fast-paced world, this new retail environment creates a just-in-time option for consumers that prefer not to spend an inordinate time searching for suitable clothing selections.
Kern County is Well-Positioned to Attract Retail Investment Opportunities
Kern County provides an ideal West Coast option, not only for businesses (that enjoy a cost-of-doing business that is just 93% of the U.S. average), but also for residents (who benefit from a cost-of-living that provides a California lifestyle for just 106% of the U.S. average). Add to that the prediction that Kern County’s population will reach 1 million in less than five years, and the region’s retail potential becomes quite clear.
To read the original publishing click here.