The Internet is changing the way retailers of all sizes think about how they're selling clothing and accessories. Some are worried, others are shuttering, and many more are finding new ways to exploit our love of shopping. Who will be declared the winner?
Just before 6 p.m. on a Wednesday in late April, more than 100 East Siders convened in a meeting room in the new East branch of the Milwaukee Public Library, just off the bustling, crowded intersection of North Avenue and Cramer Street.
Some of the attendees had been bused in from the nearby senior living complex, Eastcastle Place, a move that raised the median age of attendees significantly. Thirty-eight-year-old Ald. Nik Kovac was tasked with moderating a discussion on the Downer Avenue Commercial Corridor – a sleepy-sounding debate that turned out to be anything but.
The Downer Avenue meeting was part of a “snapshot” study process that began in March to address the slow decline in commercial activity on the street’s four blocks from North Summit Avenue to East Park Place.
Depending on whom you ask, including the alderman, the problem is worsened by the fact that a single landlord – Downer Delaware, an investment group spearheaded by Joel Lee of Van Buren Management – owns all the properties on three of the four blocks that happen to house vacant commercial space. The landlord is in foreclosure, but at the meeting, he defended himself and blamed the city for not issuing a TIF to help him further develop the buildings. Opinions on the matter from the crowd – both whispered and emphatically projected – were in no short supply.
That task of presenting to the crowd what kind of “tools” the city could employ to drum up more commercial activity fell to a Department of City Development project manager named Sam Leichtling. Young and trim, Leichtling academically explained the demographics of the residents in the area surrounding the Downer Avenue corridor: They have relatively high incomes, high education levels, and few families there have children.
All of these demographic markers, including the area’s walkability, are good news for retailers, Leichtling explained. The demographic data was paired with data from a market and redevelopment study commissioned by East Side businesses. According to the July 2015 study, neighborhoods that include the “East Side, Lower East Side, northern portion of Downtown, Brewer’s Hill, Riverwest, and southeastern portion of Shorewood” represent $573.5 million in retail demand, compared to the entire city’s $3.86 billion in retail demand. Furthermore, employees in those northeastern city neighborhoods spend more than $5 million weekly.
This would be great data for a business, especially a retailer looking to plant roots. But apparel and accessory businesses like the long-standing Ma Jolie and short-lived Olive are the kinds of independently owned retail shops that are having a hard time surviving there, he said. So what can the city do? They can provide facade grants, signage grants and matching grants for buildouts, and, as Kovac would later say, in an extreme case, the city will go as far as providing a million-dollar subsidy, as they did with the Downtown Boston Store in 2014.
Demand for the “soft goods market” is down, Leichtling explained to the increasingly exasperated crowd, and that’s a trend mirrored across the nation. After all, no one, including the retail giants like department stores, can escape from the Internet’s tightening grasp on the market. Even in Milwaukee, which was once regarded as a fashion manufacturing capital and had a thriving retail scene to match.
Later, Kovac explained that pressures on these small retailers “are probably more e-commerce than suburban malls,” but, he thinks, the Downer Avenue conundrum is “exacerbated” by a landlord who had too much debt on the properties.
Still, the neighborhood is emblematic of the tension faced by other neighborhoods in Milwaukee and beyond. In addition to competing against e-commerce, heavily trafficked areas like Downer Avenue, Brady Street, Martin Luther King Jr. Drive and the Third Ward must battle suburban malls. The malls like Bayshore Town Center, Mayfair Mall and Southridge have been decades-old competition for centrally located retail areas. New ones are being built, too, like Brookfield’s new Von Maur-anchored Corners development. And in the last two years, much of Milwaukee’s retail growth has been in those far-flung ’burbs. But even large department stores are up against a bevy of e-commerce companies that offer shopping temptation of the highest degree.
From flash sales to personal styling with perks like free shipping and easy returns, websites like Overstock, Amazon’s Shopbop, and the flash-sale site Gilt seem to offer more incentives than you could throw a hanger at, with the exception of a fitting room. Yet the booming online retail market is proof that shoppers seem to think their own bedrooms are as serviceable as the most tricked-out fitting rooms.
So who will win out? For now, it seems, the victory belongs to Milwaukee’s shoppers.