Demographics & Technology Continues To Change Retailing

Around Halloween each year I think more and more about retailing. Not because I’m into mass consumerism, but because of the five years I spent working at Toys “R” Us (1983-87). I also briefly worked at Dillard’s for a few months in 1988. Architecture school became too demanding, so I stopped working my last two of five years in college. In architecture school I took an interest in retail design.

Growing up in the 1970s, retailing was represented by Sears, Montgomery Ward (their catalogs too!), and Oklahoma stores like C.R. Anthony, TG&Y, Otasco, etc. Looking back on my personal experience, I realize just how much retailing has changed in my almost 50 years. My parents & grandparents saw considerable change in retailing during their lifetimes (1886-2007 range).

Today we have our phones out when in brick & mortar retail stores. I use a grocery app daily — I’ve added non-grocery stores for other items as well. Recently, in Target, we saw the Elf on a Shelf and decided to finally get it. A quick scan of barcode within the Amazon app showed us the price was the same at both stores, so we bought it at Target. We paid sales tax by buying at Target, but we got 5% off by using our Target RedCard MasterCard. However, we’re currently getting 5% cash back through Amazon using our Discover card. We paid more — the amount of sales taxes — so we could have it immediately. An informed decision.

My experience at Toys “R” Us was very different. I stocked shelves, but also worked as a cashier. Though part-time, I became a head cashier that trained and supervised other cashiers. In those days we had to key in a 6-digit stock keeping unit (SKU) for every item — no scanning a barcode. The register knew the price — assuming the price sticker on the product and computer were both updated. After we had the total sale amount we’d fill out a credit card form  and do an imprint of the card on the form. We had to enter the card number into the register to get an authorization code, which was then written on the form.

The truth is that the credit card imprint is nothing new. That’s how all transactions were handled in the days before the magnetic strip. It seems silly to have to explain this, but believe it or not, there are these imprint machines that are entirely mechanical. The merchant places the card on a steel plate on the imprinter and a credit card form is placed over it (it used to have “carbon paper” for those old enough to remember). The merchant slides an arm over the whole thing, and the pressure from the arm imprints the raised numbers on your card onto the paper form. It contains all the important information, such as card numbers and expiration date. (NerdWallet)

My point is retailing has continuously evolved since the first retail transaction. Once-giant retailers, like Sears, barely survive today. Some mom & pop stores go out of business, while others grow to become Nike, Spankx, Whole Foods, etc. With Millennials outnumbering Baby Boomers and Gen-Z shoppers entering the picture you can expect retail to continue changing.

Amazon is trying to stay ahead of these changes. As Amazon Prime members we’re used to getting things in two days, very fast compared to the old days of pre-internet mail/phone order from catalogs.    But sometimes you can’t wait 2 days. Google Express offers next-day delivery from local stores in St. Louis, with same-day delivery in some markets. Very soon Amazon will open two huge facilities in the Metro area —  from June:

Online retail giant Amazon announced Thursday that it would build two distribution centers in Edwardsville, bringing 1,000 new jobs and adding a big name to a growing distribution and logistics hub in the Metro East.

Known as “fulfillment centers,” the Amazon warehouse and distribution facilities service a growing cadre of online shoppers by storing and shipping goods to consumers who want them fast. One center will handle large items — big screen TVs, sports equipment or kayaks — while another will handle smaller items such as books and electronics.

Amazon has about 50 of the centers, and as online retail competition grows, the company is looking to meet the fast delivery times promised by its premium service, Amazon Prime. (Post-Dispatch)

How fast? Try 2 hours, or 1 hour for an additional fee!

We’ll be in Chicago for four nights in mid-February, so I’ll try Prime Now there. I’ve looked through the app and it’s largely groceries and Amazon’s own electronics. If it’s cold & snowing having them deliver groceries from Eataly would be nice. The walk is less than 10 minutes from the condo where we stay, but making fresh pasta and staying in might be nice. Prime Now also does restaurant delivery.

Amazon isn’t stopping there, they’re testing a brick & mortar store:

The first Amazon Go location is situated in Seattle and is only available to Amazon employees until early 2017. It looks like a typical small grocery store with one thing missing–cashiers. 

Amazon Go has no cash registers and no lines because customers do not have to check out. Instead, they check into the store using an Amazon Go app on their smartphones. Sensors placed around the store detect what customers take off the shelves, and the company automatically charges their established Amazon accounts when they leave. It’s like shoplifting, except you pay for stuff as you walk out of the store. (PBS)

Hard to say today what impact all this will have long term, but it’s safe to assume the retail industry will continue changing and adapting. Those that don’t will fade away.

— Steve Patterson

Sunday Poll: Are You Currently A Paid Member Of A Warehouse Club or Online Free Shipping Club?

This is the time of year that many associate with shopping, but we all buy things throughout the year. Warehouse clubs Costco & Sam’s, both started in 1983, have millions of paid members.  You must pay an annual fee to shop at either.

In 2005 Amazon started their paid Prime service, offering “free” 2-day shipping on many items regardless of how small the amount. Paying up front for free shipping throughout the coming year was a new idea in 2005.

Out of curiosity, I’d like to know how many of you are currently paid members — or not. You can also add one not listed.

The poll will close at 8pm. Tomorrow I’ll post more on modern retailing, Wednesday will be the results from this poll along with my thoughts.

— Steve Patterson

St. Louis Board of Aldermen: New Board Bills 12/9/2016 (204-206)

The following three four Board Bills will be introduced at today’s meeting of the St. Louis Board of Aldermen, review the agenda here.

B.B.#204 – Vollmer – An ordinance approving a Redevelopment Plan for 5006-5030 Daggett.

B.B.#205 – Coatar – An ordinance entitled “Building Energy Awareness”; the purpose of this ordinance is to establish an energy benchmarking and reporting requirement for certain buildings.

B.B.#206 – Vaccaro – An Ordinance establishing a stop site for all eastbound traffic traveling on Mardel, (a one-way street) at Clifton and all northbound and southbound traffic traveling on Clifton at Mardel, causing it to be a three-way stop site at the intersection of Mardel and Clifton, and containing an emergency clause.

B.B.#207 – Ortmann – An Ordinance establishing a four-way stop site at the intersection of Indiana and Pestalozzi by regulating all northbound and southbound traffic traveling on Indiana at Pestalozzi and regulating all eastbound and westbound traffic traveling on Pestalozzi at Indiana, and containing an emergency clause.

The meeting begins at 10am, it can be watched online here.

— Steve Patterson

Opinion: Downtown Needs a Form-Based Code, Not An Old Height Restriction

The building at 620 Market, like most, has had numerous uses since it was first built, I recall attending a meeting at East-West Gateway when they were on the 2nd floor — back in the 90s. The most recent occupant was Mike Shannon’s restaurant, which closed January 30, 2016.

When St. Louis’ Chinatown, known as Hop Alley, was razed in the 1960s for Busch Stadium (1966-2006), a 35 ft height restriction was placed on the 620 Market deed. A taller building could have allowed occupants to look down into the new stadium. For a decade now the replacement Busch Stadium has been to the South and the old site a slowly developing mixed-use project between the Cardinals & developer Cordish, called Ballpark Village. Ironically, Phase 2 of Ballpark Village will include a tall building where occupants can look down into the current stadium.

Meanwhile, Mike Shannon has been trying to sell 620 Market. I’m sure, for the right price, he could find buyers willing to accept the 35 ft height restriction. Like anyone who owns real estate, he correctly views the substantial public & private investment in Ballpark Village as increasing the value of his property. Shannon’s former employer, the Cardinals, don’t want to agree to lifting the height restriction unless they get a say in what may replace the current building.  See Messenger: Mike Shannon takes on the Cardinals in battle to sell his building.

Results from the recent Sunday Poll:

Q: Agree or disagree? Cardinals/Cordish should get to approve/reject proposals for Shannon’s site in exchange for releasing 35ft height restriction.

• Strongly agree 1 [4%]
• Agree 0 [0%]
• Somewhat agree 3 [12%]
• Neither agree or disagree 4 [16%]
• Somewhat disagree 1 [4%]
• Disagree 6 [24%]
• Strongly disagree 9 [36%]
• Unsure/No Answer 1 [4%]

I’d forgotten to uncheck the option allowing user-entered answers, I turned it off after the first, which read: “no subsidy for Cordish unless restriction lifted” Agreed, but that should read ‘no ADDITIONAL subsidy for Cordish unless restriction lifted’.

This is another demonstration of failed urban design policy in St. Louis. Within the central business district the only regulation on height of new construction should be minimum height — not maximum.  Issues such as heights and design could easily be addressed within a form-based code, replacing our 1940s use-based code. Even a form-based overlay for Ballpark Village and surrounding a decade ago would’ve been a good idea.

St. Louis would rather battle parcel by parcel rather than determine a larger vision through a public process. Great for those in control, bad for creating a healthy city.

— Steve Patterson

Reading: Design Professional’s Guide to Zero Net Energy Buildings by Charles Eley

Many of the books I receive each year are written for general consumption, filled with beautiful color photos and written for both professionals & non-professionals. This book, however, is written for design professionals. There are far more tables, charts & diagrams than photos — all in black & white. This is a technical book addressing a fascinating subject matter.

From the publisher:

In the United States, direct energy use in buildings accounts for 39% of carbon dioxide emissions per year—more than any other sector. Buildings contribute to a changing climate and warming of the earth in ways that will significantly affect future generations. Zero net energy (ZNE) buildings are a practical and cost-effective way to reduce our energy needs, employ clean solar and wind technologies, protect the environment, and improve our lives. Interest in ZNE buildings, which produce as much energy as they use over the course of a year, has been growing rapidly.

In the Design Professional’s Guide to Zero Net Energy Buildings, Charles Eley draws from over 40 years of his own experience, and interviews with other industry experts, to lay out the principles for achieving ZNE buildings and the issues surrounding their development. Eley emphasizes the importance of building energy use in achieving a sustainable future; describes how building energy use can be minimized through smart design and energy efficiency technologies; and presents practical information on how to incorporate renewable energy technologies to meet the lowered energy needs. The book identifies the building types and climates where meeting the goal will be a challenge and offers solutions for these special cases. It shows the reader, through examples and explanations, that these solutions are viable and cost-effective.

ZNE buildings are practical and cost-effective ways to address climate change without compromising our quality of life. ZNE buildings are an energizing concept and one that is broadly accepted yet, there is little information on what is required to actually meet these goals. This book shows that the goal is feasible and can be practically achieved in most buildings, that our construction industry is up to the challenge, and that we already have the necessary technologies and knowledge.

Potential clients interested in the environment might also find the book helpful for educating them to work with their design professionals on a future project(s). Design Professional’s Guide to Zero Net Energy Buildings is available from the publisher, Left Band Books, and Amazon. I meant to check the AIA St. Louis bookstore, but didn’t get a chance.

— Steve Patterson

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