The Evolution of Urban Shopping Districts Post COVID-19

The District Wharf, Washington DC | Photo: Jeff Goldberg/ESTO

Is the coronavirus the end of retail as we know it? With the holiday shopping season upon us, a great deal of speculation and concern is circulating about the future of retail and shopping. The statistics are dire. Across the country, as many as 25,000 stores in urban centers could close permanently by the end of the year, according to Coresight Research. Major retail brands — such as Neiman Marcus, Lord & Taylor, Brooks Brothers, J. Crew, and JC Penney — have gone, or will be going, bankrupt, and in some cases, closing permanently. Many of the shopping districts that historically relied on these anchors to attract shoppers are in trouble, and mall and retail property owners are quickly trying to reposition their properties to adapt.

Brad Perkins, FAIA, MRAIC, AICP, Chairman and Co-Founder of Perkins Eastman, has been monitoring the impact of the coronavirus on shopping districts in New York and beyond.

“In New York, the situation is very serious. Hundreds of restaurants and retail stores have closed and many more will not survive the winter. All of this has led to people predicting that the central shopping districts of major cities are dying and will never fully recover.”

But Brad’s many years’ working with commercial real estate, retail, and mixed-use clients worldwide have given him perspective.

“I might be more worried if I had not heard this same prediction several times before,” Brad remarks. “The great world cities have always come back — in many cases stronger than before. This was the case in New York City during the recessions of the 1970s and again in the 1990s, and neither of those eras resulted in the end of dedicated shopping areas,” he adds. Instead, Brad believes “the pandemic is just accelerating changes that were already underway. The spaces devoted to retail and shopping are not disappearing, they are evolving.”

Brad’s predictions, which follow below, highlight how vital repositioning, adaptation, and flexibility will be for the evolution of the urban shopping district:

1 | Balancing brick-and-mortar with e-commerce

E-commerce was part of the retail landscape long before the pandemic. Over the last 20 years, most large- and mid-size retailers and brands have built an active online presence, allowing customers the flexibility to shop for products over the Internet. As the coronavirus continues, these changes in shopping methods are only becoming more habitual. The 22 percent surge in online shopping on Black Friday that reached a record $9 billion in sales in the U.S., according to Adobe Analytics, illustrates that the pandemic is leading more people to shop from the comfort of their sofas than to risk heading to crowded stores. Additionally, this year Cyber Monday had its biggest online shopping day ever in the U.S., according to Adobe Analytics.

Empire Stores, Brooklyn, NY | Photo: Miguel de Guzman

But while e-commerce sales have increased dramatically, few retailers have abandoned the brick-and-mortar model completely, and many are looking to an edited brick-and-mortar experience to highlight their products, converting their store fronts into showrooms for customers to sample their products before buying online.

Brick-and-mortar stores are still core to the mix, providing a ‘try before you buy’ experience that can’t be facilitated online, plus convenience to shoppers who want almost instant gratification. Adobe Analytics reveals that the number of orders fulfilled using curbside pickup grew more than 100 percent year-over-year through 2020 Cyber Week. “Salesforce reported that retailers with curbside, drive-through, and in-store pickup saw 32 percent higher online sales growth than retailers without those brick-and-mortar options during Cyber Week,” according to PracticalEcommerce.

2 | Blending indoor and outdoor spaces

Connections with the outdoors and streetscapes have always been part of the retail experience in many cities, and in many parts of the world, “patio season” occurs year-round. In the U.S. throughout the pandemic, many restaurant and bar owners began adopting this trend, which has saved many establishments from closing.

These lively outdoor food or café streets attract people to the major shopping districts and will inspire cities to rethink the use of streets, public parking areas, and sidewalks.

District Wharf, Washington, DC | Photo: Jeff Goldberg/ESTO

Testament to this, in the beginning of lockdown, many cities started to reposition their streets to be pedestrian only in order to promote social connections at a safe distance. Now, because of the popularity of these measures, these cities are considering the option of keeping some of these streets strictly pedestrian, reorienting traffic, and creating more public plazas.

3 | Fitness for all

In the U.S., among the most visible types of new tenants in major urban shopping areas are the growing number of gyms, martial arts dojos, spin class venues, and other fitness facilities that are expanding into store fronts.

The indoor/outdoor connection of these properties attract new and essential foot traffic and we will see more fitness facilities located in these ground floor retail spaces.

4 | Urgent Care at the (store)front

One of the faster growing new uses in traditional shopping areas has been made possible by advances in healthcare technology, and this has become even more vital during the pandemic. More healthcare services can now be provided in decentralized outpatient settings rather than on the grounds of large inpatient hospitals.

Storefront urgent care centers have replaced the need for many non-critical emergency room visits, and the ongoing demand for testing has made these healthcare services an important part of high-density retail areas.

5 | Work/Life

Before the pandemic, working from home was an option for a limited number of occupations and companies. Now, due to the shut-down and quarantines of the spring, many more employees have become accustomed to working remotely. This reality has not only caused substantially decreased occupancy in office buildings and workplaces, but has also put immense pressure on people’s home environments and neighborhoods to adapt to new lifestyles.

Brad notes, “Most of us do not expect to ever again see all of our employees in the office at one time. In the short term this will shrink the demand for new office space, but other trends will balance this out. Many of the younger workers want to be able to live, work, and play all in one neighborhood.”

As people continue to limit their travel and adapt to remote working, cities’ land use regulations must permit and encourage a mutually supportive variety of uses: retail, residential, business — to make it possible for shopping districts in mixed-use neighborhoods to remain lively centers.

6 | Multi-generational living

Multi-purpose and flexible spaces are necessities for the survival of urban shopping districts, but encouraging diverse populations is also paramount. The rapidly growing senior populations in the U.S. is another demographic that will affect the future of these spaces.

Eliot on 4th, Washington, DC | Eric Kieley Photography

“The best place to locate housing and socialization facilities that many seniors want and need is within walking distance of shopping districts that offer shopping and services: fitness, healthcare, dining, and so forth, that meet the full range of their daily needs,” Brad notes.

To be truly adaptable and resilient, multi-purpose spaces should support multiple generations.

The MultipliCity concept, applied to Madison Square in New York City

MultipliCity: the future of city life?

Technology has given us access to many more options that bring convenience, variety, and efficiency to our busy lives. This was true before the pandemic, and has only become more obvious throughout this crisis. But our networks: our families, workplaces, and communities, which are increasingly widespread due to recent technological advances, have been largely limited to online and physically distant interactions. In an organic response to these constraints, we’ve sought alternatives to replace our pre-COVID-19 routines. For example, in-person get-togethers are now done over Zoom, while many other activities, shopping included, have shifted to be online and ‘contactless’. And ingrained habits, especially those developed in crisis, are difficult to change. So, what is the solution?

“Connecting with others is built into our DNA. We want the kind of diversity that cities encourage and the vibrancy and cross-fertilization that goes along with this,” says Brad. “To be successful in the future, shopping districts need to be embedded in other uses — office, residential, entertainment, and so forth — to stay dynamic,” he continues.

This means creating redundancy — networks of development that are purposefully planned for multi-use — within the larger infrastructure of our cities. This concept is spelled out in detail in our highly regarded proposal: MultipliCITY; published earlier this fall in New York City’s Urban Design Forum.

Shopping districts in our cities are always evolving to address people’s cravings for connection and new experiences. They will continue to adapt and grow because they are integral parts of the urban fabric. In the post-pandemic world, the planning, development, and architecture of these developments will be more critical than ever.