Phoenix: Retailers focus on experience as city resurges
It is important to city officials that Phoenix never loses sight of its original intent — to be a city that welcomes everyone and respects everyone, with an economy that creates real opportunity for everyone.
Since the mid 20th century, Phoenix’s goal has been to expand its population, and it appears to have achieved that. It is currently ranked the fifth-most-populous city in the United States behind New York City, Los Angeles, Chicago and Houston. This, in stark contrast to the mid-1950s, when Phoenix’s nickname was America’s Eden for its vast open spaces.
Flash forward to present day and a time where much has changed in the region, both physically and economically. City officials have been diligently working to rebuild the city’s economy, an effort that has not gone unnoticed. Phoenix has been earning kudos for its efforts to stabilize its economy and for its sustainability progress.
For its citizens, life in Phoenix has been improving, as well. Unemployment rates are down and average wages are up. The proliferation of high-tech jobs helped Phoenix become one of the nation’s top-10 fastest-growing economies in 2017. In addition to technology, more than half of its workers are employed in advanced industries, such as business and financial services, health and life sciences and precision manufacturing.
Phoenix continues to attract a large number of new businesses, which in turn are creating new job opportunities for area residents. Its economy also is being boosted by Phoenix’s trade relationship with Mexico, which estimates show to be an $8 billion business venture for the city.
By some estimates, retail also is helping to boost the local economy. More than a quarter of a million people work in the retail sector in the greater Phoenix area, making it one of the top-three industries for employment. At the same time, the landscape of retail is changing, and the makeup of all those once-famous power centers the Phoenix market had become known for is changing face. Today, it is becoming more common to see owners chop up vacant big-box space and put in two 20,000-sq.-ft. anchors, or develop empty parking lots into space for fast-casual restaurants.
Grocers have been leading the new construction wave with several Fry’s Marketplaces opening in the past year, including the first-ever grocery store in downtown Phoenix, as well as Sprouts Farmers Markets. Given the steady job and wage growth, as well as a strengthened housing market in the area, experts predict the momentum in retail will continue and extend beyond 2018.
Fry’s Marketplace on East Shea boulevard knows service. The retailer offers valet parking, covered parking and complimentary curbside pickup, plus its staff routinely is noted by shoppers as being helpful and friendly. Customers also appreciate the retailer’s large kosher section, in-store café, large assortment of prepared foods, garden center, cooking school and car wash. This upscale Kroger banner is in many ways an exact opposite of another area favorite — Trader’s Joes, the closest of which is just a few doors down. Its staff also is often cited for being friendly and knowledgeable, and its floral section earns points with shoppers for its deals. But its signature move of constantly refreshing its shelves with new products for shoppers to try is what makes this retailer stand taller than its competitors.
Shoppers also appreciate the assortment of healthy food choices, but it’s the products sold under the Trader Joe’s label — representing hard-to-find, innovative products at a value — that keep customers coming back.
Bay Area retailers innovate around Silicon Valley
Home to the famed Golden Gate Bridge, the other thing the City by the Bay is known for these days is its soaring cost of housing. Alongside Washington, D.C., and New York City, the Bay Area is one of the most expensive cities to live in the United States.
While low unemployment and robust job growth are pluses, a cost of living 64% above the national average makes the area unaffordable to live in, even when the average median household income is above $75,000.
The region encompasses such metro areas as San Francisco; Oakland, the 12th largest metro area in the country; and San Jose, the 31st-largest city in the country, along with smaller urban and rural areas. Some 7.4 million people live in the nine counties, 101 cities and 7,000 square miles that comprise the Bay Area.
The San Francisco-Oakland-Hayward metro area’s economy is growing significantly faster than any of the top-10 metro areas in the nation, and part of its success is directly connected to growth in the technology sector. Silicon Valley — the center of the technology industry — is located in the Bay Area. Companies such as Google, eBay, Apple and Facebook have headquarters here.
The city is a renowned hub for the incubation and development of emerging markets, but IT is not the only industry thriving here. Some 30 international financial institutions are located here as are a number of social and digital media, life sciences and biotech, environmental and clean tech, professional services and international businesses.
As would be expected in this area, retailers are often more progressive here than in other parts of the country, partly by choice and partly due to necessity. For this hipster, educated, affluent demographic, cookie-cutter approaches won’t suffice. As a result, several area retailers have added experiential components in their stores, a move they admit has been helpful in combatting declining sales. With an emphasis on entertainment and socialization, a number of retailers are adding bars, theaters, gaming and recreational areas in their locations. Nordstrom in San Jose has a bar and Whole Foods features a beer garden on its upper floor. Bass Pro Shop decided to add a bowling alley for its customers to use.
Given this, it also is no surprise that an eclectic combination of food retailers dot the landscape in the San Francisco-metro market. While shoppers will find such expected options as Safeway, Trader Joe’s and multiple Whole Foods Markets, a number of smaller grocers are thriving here as well. One particular standout is Mollie Stone’s. Since 1986, this family-owned business has offered “the best of both worlds” — conventional groceries, as well as natural and organic food, much of which is locally sourced.
This is a retailer that is not afraid to adapt or take risks. It became the first retailer in the San Francisco Bay Area to integrate a complete, full-service hardware store into the overall layout of its grocery departments. The new Mollie’s Ace Hardware is a one-stop shop for easy access to home improvement items.
Its San Mateo location offers Mollieland, a free supervised play area for children to hang out, while their parents shop. And in its Pacific Heights and Castro locations, customers can hop on the Mollie Bus. Recognizing how many city dwellers hate to give up their parking spots to run errands, the retailer came up with the idea of offering a free shuttle for shoppers, and customers love it.
Panzer points to NACDS’ ability to drive partnership, engagement
PALM BEACH, Fla. — As retail undergoes a revolution, the key to delivering what consumers want is agility from retailers and suppliers, as well as maintaining a personal connection with shoppers, Albertsons’ Mark Panzer said in his first remarks as chairman of NACDS. He also highlighted NACDS’ ability to help retailers engage with each other to reach success through such events as NACDS Annual and Total Store Expo.
Panzer’s remarks were informed by his current role as senior vice president of pharmacy, health and wellness of Boise, Idaho-based Albertsons, which is leveraging digital tools to reach customers and is in the midst of an acquisition of Rite Aid, as well as by his more than 40-year career in retail that began at Osco Drug in the early 1970s. Throughout his career, Panzer said, he has seen the value of customer relationships shine through, even as the ways retailers build them have shifted.
“We have better tools, better data, better analytical skill,” Panzer said in his remarks that followed him receiving the chairman’s gavel from outgoing chairman and Walgreens Boots Alliance co-COO Alex Gourlay. “We need to utilize all of these things in this rapidly changing retail environment. But native intelligence, gained through frontline experience and face-to-face customer interaction, is invaluable and must still play a critical role at the decision-making table.”
He highlighted NACDS as a crucial facilitator of the conversations where retailers and suppliers decide their strategies in a changing environment — both through events and the organization’s Retail Advisory Board. “NACDS is doing a lot to bring retailers and suppliers together, to really tackle the issues of today and tomorrow.” Panzer said.
He also noted the way that NACDS maintains a focus on public policy measures that can help further members’ role in the lives of patients and customer through its Access Agenda’s focus on such issues as pharmacy provider status, direct and indirect remuneration fees and fighting the opioid epidemic. “When you look at all of the business challenges we are facing, I cannot emphasize enough, just how important it is to have NACDS representing all of us, and taking on these public policy issues,” he said.
Panzer’s speech Tuesday was preceded by remarks from Johnson &n Johnson U.S. chief customer officer David Pothast and Panzer presenting Gourlay with a plaque commemorating his time as chairman. His remarks were followed by educator Jim Collins, who spoke to attendees about what distinguishes great companies. As part of his talk, Collins discussed how companies that achieve greatness do so through large, ambitious goals that attract the best and brightest. His framework could also easily apply to such organizations as NACDS, whose membership Panzer noted comprises the best of the industry from companies of all sizes.
“If you’re not doing the hardest things, you’re not going to get the best people,” Collins said.