Is Cincinnati's longtime struggle with downtown retail finally ending?

Cincinnati has long celebrated a retail legacy all our own, with much of our dramatic downtown architecture once dedicated to some of the nation’s best-loved brands. But amid a massive downtown resurgence, the impact on urban retail development remains to be seen.

A recent State of Downtown report from Downtown Cincinnati Inc. stated that in 2015, the Central Business District, Over-the-Rhine and Pendleton attracted $522 million in development investments, added 600 jobs and planned 1,000 new residential units. Similar national reports show numbers for urban restaurants and other services, but retail remains a mystery for many downtown areas.

“Retail is a conundrum for every city,” says DCI president David Ginsburg, who urges media and residents to focus on the good things happening downtown. “The retail industry has changed radically and everyone is trying to figure it out. But if you focus just on (store) closings, that’s sort of like reading the obituaries and thinking that the human race is dying out.”

National shopping trends bring Cincy current

In the pre-Industrial era, people shopped at markets, bazaars and fairs. Standalone stores featured specialty goods and services. Then, the Industrial Revolution introduced a new way to shop: the department store. This new format brought multiple trades and products under one roof, eliminating the need for separate visits to the tailor, cobbler and milliner.

Cincinnati had its fair share of notable department stores and an outsize impact on the industry. Henke’s on Main Street was the first in the city to have a year-round toy department. Alms & Doepke, located on the Ohio-Erie Canal, was the second-largest outside of New York, with 15 acres of floor space.

Columbus-based Fred Lazarus, Jr., bought Shillito’s in 1928 and formed Federated Department Stores, serving as its president and moving its headquarters to Cincinnati. During the Great Depression, Lazarus lobbied President Franklin D. Roosevelt to move Thanksgiving from the last Thursday to the fourth Thursday in November, to extend the Christmas shopping period.

For decades, department stores were destinations. Stores held fashion shows, operated tea rooms and created annual Christmas displays. But the advent of the suburban shopping center soon followed, signaling a shift away from urban business districts, some of which tried to compete by introducing pedestrian shopping districts and downtown malls.

“Tower Place Mall (in the Carew Tower) was a response to suburban development,” says Ginsburg. “And like similar developments in other cities, it failed. It had the same stores as the mall, but it took traffic off the streets and didn’t help the surrounding areas.”

A few years ago, Tower Place was converted to a parking garage, and the mall's interior lies abandoned.

It wasn’t long before shopping malls morphed into lifestyle centers and outdoor mixed-used, town-square shopping centers. Meanwhile, big-box stores established themselves as formidable competition for urban and suburban retailers alike.

For longstanding downtown shops, balance is key

Retail is a business, but success can often hinge on the art of seizing opportunities.

At least one downtown Cincinnati institution has mastered that art, achieving an authentic experience that almost mimics shopping’s heyday by focusing on unique products and specialized services.

On a quiet block of W. Fourth Street sits Bromwell’s, the city’s oldest remaining retail store, dating back to 1819. The original store was across the street before the block was torn down to build Pogue’s parking garage. That site is about to undergo yet another transformation to a mixed-use retail and residential and parking structure. Meanwhile, Bromwell’s continues to adapt to market changes while staying true to its core brand.

By the time Jeff McClorey bought Bromwell’s in 2004 from its second owners, the store had separated from its former manufacturing line (which spun off in 1920) and was focused on selling fireplace- and hearth-related equipment.
“It was an unusual time to get into retail,” says McClorey. “The Internet was taking off, downtown was struggling. Then the recession hit and that was brutal. We needed to add a new dimension to the store.”

McClorey brought on Brent Hodge as director of merchandising and retail experience to supplement the store’s main offerings with accessories, art and other upmarket furnishings.

“We decided to focus on a lifestyle story that engaged multiple customers in multiple ways,” says Hodge. “The nature of the fireplace business is that it’s a generational transaction. We’ve created a very tactile space that offers events, social interaction and consumable products to encourage people to come back.”

These elements combine to give Bromwell’s a distinctly comfortable vibe and identity among downtown retailers.

“Downtown has improved dramatically,” McClorey says. “Not just the repopulation, but also the growing perception that downtown is the center for fine dining, arts experiences and sports. The prestige of the urban core offers an opportunity to make it a retail destination as well.”

City provides needed boosts, but Internet still reigns

Last summer, the City of Cincinnati adopted a Retail Action Plan with goals that include:
  • Supporting existing retail businesses;
  • Guiding policies and downtown investments;
  • Creating a healthy and vibrant street life;
  • Supporting additional development; and
  • Providing a diverse array of retail and small business opportunities.
The city is working with DCI, the Over-the-Rhine Chamber of Commerce and the Cincinnati USA Regional Chamber, as well as 3CDC and other stakeholders to implement the plan.

Vacancy rates have been steadily decreasing in recent years with new residential and business developments opening in the CBD. Downtown now has nearly 16,000 residents — a mix of professionals, empty-nesters and retirees — all interested in a walkable, urban lifestyle.

“As more people move to the urban core to live and work, the more demand we are seeing for a variety of downtown retail options and amenities of all sizes,” says Philip Denning, who represents the city’s Department of Community and Economic Development.
These trends, combined with the streetcar opening, are attracting new retail, including the full-service Woods Hardware that opened in January at 125 E. Ninth Street.

“We had seen the density increasing in the urban core and had been looking for a larger space for a while,” says owner Matt Woods. “With three streetcar stops within two blocks, this was the perfect space.”

In addition to serving contractors, the store sells moving supplies, small appliances and pet supplies geared toward new urban dwellers. This spring, it will offer in-store classes.

“We’re not just a traditional hardware store; we see it as a community center,” Woods says.

As retail makes a slow-but-steady return to the urban core, online shopping continues to threaten independent retailers and big-box stores alike. Some retailers have begun to adapt by offering in-store pickup of online orders.

“What we’re now seeing for retail in general, not just locally, is the exponential increase in online shopping,” says Denning. “This trend directly coincides with stagnant growth in regional shopping malls and slowed development of big-box stores.”

Kroger, for example, recently launched Click List, which allows customers to grocery shop online from the comfort of their home or office, and then schedule a time to go to their nearest store and pick up their order. Kroger employees do the physical shopping, following customers' lists and making necessary substitutions.
According to Forrester Research, online retail made up only 8 percent of total U.S. retail sales in 2013, and they predict that number will grow to 11 percent by 2018.
Internet shopping is attractive for its ease and lack of sales tax enforcement, but what it can’t provide is the personal interaction and physical experience of an actual store.
“Instead of shopping online or going to a crowded mall, our retailers can give consumers the opportunity to shop specialty retail, with the backdrop of nationally regarded architecture, parks, arts — and let’s not forget the food,” says Kelly Adamson, executive director for the OTR Chamber. “OTR retailers offer original, specialty products that aren’t found as often in larger chains, so you know exactly what you are purchasing and that a larger percentage of your money will be staying and supporting local.”
The city, DCI and OTR Chamber are all working to encourage new retail while supporting existing retail development. They are also trying new tactics like pop-up shops to experiment with variations on the brick-and-mortar experience. Goods on Main is just one example — although a permanent retail location, the products and services offered within the store rotate seasonally.
“We are reviewing what support retailers in Over-the-Rhine need to achieve long-term sustainability, and where gaps in retail services lie,” says Adamson.

Organizers are responding to those needs with grants, referrals, collaborative partnerships and assistances with commercial real estate and employment services.

“There is nothing we love more than for people with ideas to come see us,” Ginsburg says. “The value of our network is we can connect people with resources to develop those ideas, we can connect businesses with each other and we provide platforms to promote downtown.”

Read more articles by Julie Carpenter.

Julie Carpenter has a background in cultural heritage tourism, museums, and nonprofit organizations. She's the Executive Director of AIA Cincinnati.  
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