American battle: weirdness vs. wealth

In a closer look at what is happening to retailers in New York City, Derek Thompson suggests two contrary forces are at work in urban America:

A war is playing out in American cities between wealth and weirdness. The former encourages the pursuit of national trends and national brands—high-end fitness studios adjoining Sweetgreen franchises—for the purpose of maximizing profit on a per-lease basis. That spirit runs counter to the desire for diversity and experimentation, which requires policies that actively promote the survival of small companies in an economy that would otherwise eat them up.

I would suggest this goes further than just big cities. One could argue this is a larger battle fought since at least the end of World War Two involving revered ideals in American culture.

On one side are the powers of standardization, efficiency, predictability, and national chains. Think the rise of McDonald’s, Walmart, and Google. These companies came to represent whole sectors of business and their actions helped lead to predictable user experiences and outcomes across different geographic contexts. They are good at efficiency, offering customers a cheap service while turning out billions in profit.

On the other side are the powers of small businesses, entrepreneurs, diversity, and American individualism. Think the quirky and interesting shopping districts that attract visitors. Many of the establishments offer unique experiences that are difficult to replicate elsewhere. Think businesses that reflect the traits of their owners. These are people trying out ideas and participating in the local community. Non-conformity and cool are still sought after.

Both of these types of businesses reflect American ideals. Many of the national chains we know today started as the more unusual business options that became wildly successful. Some owners and founders want to remain small and others want to try for everything they can get. Obtaining a good balance of these approaches is likely hard to do from a policy level.

Fox Valley Mall “near Naperville” Part 1 – status

I recently heard a radio ad for a store located at Fox Valley Mall which was said to be “near Naperville.” The mall is officially located in Aurora so why would a store there claim to be in the next suburb over? One word: status.

In this particular location, Aurora and Naperville are separated by Illinois Route 59. On the east side, containing a number of stores just across the street from the mall, is Naperville. On the west side, including the mall plus additional stores, is Aurora. Aurora is the bigger community – roughly 200,000 people – but Naperville is the wealthier, higher status community. Some of the figures: Naperville has a median household income of over $110,000 and 4.9% of residents are in poverty. In contrast, Aurora has a median household income of almost $64,000 and 14.0% of residents are in poverty. The communities also differ in race and ethnicity: Aurora is significantly less white (over 30%) and more Latino (35% more) and Black (5% more).

So, when a store says they are “near Naperville,” what are they trying to hint at? They want to associate their store and the shopping experience with a wealthier community rather than Aurora. They want people to think of an upscale and safe place, rather than the diversity of incomes and races/ethnicities of Aurora. Ultimately, they want shoppers to come and spend money like they have Naperville resources.

If it is the case that the store wants to associate with Naperville, why is it located in Aurora? The bigger question: why is the mall in Aurora? To be answered tomorrow.

Archetypal American cities and “America has only three cities: New York, San Francisco, and New Orleans. Everywhere else is Cleveland.”

A story about the decline of retail establishments in Manhattan and the consequences for street life ends with this saying from Tennessee Williams:

“America has only three cities,” Tennessee Williams purportedly said. “New York, San Francisco, and New Orleans. Everywhere else is Cleveland.” That may have been true once. But New York’s evolution suggests that the future of cities is an experiment in mass commodification—the Clevelandification of urban America, where the city becomes the very uniform species that Williams abhorred. Paying seven figures to buy a place in Manhattan or San Francisco might have always been dubious. But what’s the point of paying New York prices to live in a neighborhood that’s just biding its time to become “everywhere else”?

These three cities are indeed unique with distinct cultures and geographies. But, I could imagine there would be some howls in response from a number of other big cities. What about Chicago and its distinct Midwest rise in the middle of a commodity empire? What about Los Angeles and its sprawling suburbs and highways between and across mountains and the ocean? What about Miami serving as a Caribbean capital? What about Portland’s unusual climate and approach to social issues? And the list could go on.

Perhaps a more basic question is this: how many archetypal American cities are there? One of the books I have used in urban sociology, The City, Revisited, argues for three main schools of urban theory: New York, Chicago, and Los Angeles. These happen to be the three largest cities in the United States and also have the advantage of having collections of urban scholars present in each. New York is marked by a strong core (Manhattan) and a unique colonial history (Dutch and then English) that helped kickstart a thriving economy and religious and cultural pluralism. Chicago is the American boom city of the 1800s and was home to the influential Chicago School at the University of Chicago in the 1920s and 1930s. Los Angeles is the prototypical twentieth-century American city built around highways and Hollywood with a rise of urban theorists in the late 1900s dubbing themselves the Los Angeles School. If these are the three main cities on which to compare and contrast, a place like Cleveland is more like Chicago (as is much of the Rust Belt), Houston is more like Los Angeles (as is much of the Sunbelt), and San Francisco is more like New York (and some other coastal cities might fit here).

But, these three biggest cities cannot cover all possible kinds of American cities. How many archetypal cities are too many before the categories become less helpful? Should the emphasis be on cultural feel or on how cities develop (New Orleans might simply be a unique outlier in all of this data)? Having these ideal type cities is only helpful so that they help describe and embody broad patterns across groups of cities.

When bricks and mortar stores can’t make it even in Manhattan

Heart of one of the world’s leading global cities, Manhattan has its own struggles with keeping brick and mortar retailers in operation:

That’s right: On a nine-block stretch of what’s arguably the world’s most famous avenue, steps south of the bustling Time Warner Center and the planned new Nordstrom department store, lies a shopping wasteland.

Yes, there are bank branches, restaurants, fast-food outlets, theaters, Duane Reades, a vitamin shop and a few tourist-targeted “discount” stores. But mainly there are oodles of empty spaces covered with signs touting SUPERB CORNER RETAIL OPPORTUNITY.

The same crisis blights the rest of Manhattan. The people invested in storefront retailing — real-estate developers, landlords and retail companies themselves — tell us not to worry. It’s a “transitional” situation that will right itself over time. Authoritative-sounding surveys by real-estate and retail companies claim that Manhattan’s overall vacancy is only just 10 percent.

But they are all wrong. Bricks-and-mortar retail is shrinking so swiftly and on such a wide scale, it’s going to require big changes in how we plan our new buildings and our cities — although nobody wants to admit it.

This is an interesting argument to make: even with all of the tourists, wealth, and attention bestowed upon the borough, retail is disappearing from Manhattan. And if shopping disappears, with shopping being one of the favorite leisure activities of Americans, might this negatively affect the business and social life of a Manhattan used to ultra-busy sidewalks?

On the other hand, Manhattan may not be the best example. The median household income in Manhattan is not as high as one might expect, there is not much of a middle class, and the cost of living is high. Add in that Manhattan does have a lot of tourists, workers that arrive for the day and leave at night, and concentrations of residents in different parts of the island. The sheer density of people might suggest that retailers should be able to make it in Manhattan but it is a complicated place.

More broadly, what will tourist locations of the future look like if even more shopping is done online? For decades, the international tourist destination includes significant amounts of shopping. What would fill that space?

Can you be opposed to Walmart in your community but not Amazon?

Alana Semuels compares the fight of Greenfield, Massachusetts and other New England towns against Walmart and other big box stores to a struggle with shopping on Amazon. The story begins and ends with an activist who led the fight in Greenfield against Walmart:

Al Norman has been fighting to keep Walmart and other big-box retailers out of small towns like this one for 25 years. He’s been successful in Greenfield, his hometown and the site of his first battle with Walmart, and in dozens of other towns across the country—victories he documents on his website Sprawl-Busters, an “International Clearinghouse on Big Box Anti-Sprawl Information.” Partly because of Norman’s efforts to keep out such stores, Greenfield still has a Main Street with dozens of businesses, including a bookstore, a record store, and Wilson’s, one of the last independently owned department stores in the country.

But Norman and business owners in Greenfield are noticing that the Main Street stores are now struggling in the face of another force that’s become more and more powerful in recent years: e-commerce…

But the challenge posed by online shopping to local businesses is immense. Even Al Norman, who refuses to shop at Walmart, says he doesn’t have the same aversion to Amazon, in part because he thinks the internet is the future of shopping. His wife has a Prime account, and he recently ordered tea from the website when he couldn’t find it locally, he said, adding that he has no plans to organize protests or zoning meetings about Amazon. He doesn’t love the idea that some of his money is going to Jeff Bezos, “the richest human around,” as he refers to the Amazon founder, and so still shops locally whenever possible. He doesn’t know whether he’ll still be doing that in a decade. When he launched the first campaign against Walmart in Greenfield 25 years ago, he led activists with bumper stickers that said, “If you build it, we won’t come.” He knows the same can’t be said for Amazon, because shoppers, including him, are already there.

Can a community oppose Walmart and not Amazon? Here are some of the common complaints against Walmart and other big box retailers:

  1. Land use, particularly the large parking lots and the contribution to sprawl and driving as well as issues with water and open space.
  2. A negative influence on local businesses. Walmart’s prices and options made it an attractive place to shop compared to local small businesses.
  3. A detrimental effect on local social life, ranging from decaying downtowns that used to be at the center of civic life to low wage jobs affecting health care systems and local wealth.
  4. The wealth generated by large corporations located somewhere else with little visible impact on communities where stores are located.

Do these same concerns apply to Amazon? They could: Amazon’s warehouses and other facilities take up space, it certainly affects local businesses, it encourages less social interaction as you can shop from home, and Amazon has tremendous revenues (and its founder, like the Waltons, have tremendous wealth). But, it seems like the fact that Amazon is “somewhere else” compared to the big box stores – the physical footprint of Amazon touches fewer communities that all the locations of Walmart, Target, Home Depot, and others – means that people can support it without feeling as bad about its negative effects on communities. Because it is viewed as being online, Amazon is an issue for only some communities and not many.

Yet, I think an argument could be made that Amazon and other online retailers can shape local conditions even more than big box stores or other local retailers. The Internet makes it possible to act as if we are in a completely placeless world (even though this is not true) and to leave certain problems for others to solve in other places. Only in certain circumstances, like when cities fight to offer Amazon a great tax break or deal in order to become home to a second headquarters or groups in Silicon Valley express frustration about mammoth tech headquarters, are we reminded that even Internet companies affect communities.

To be consistent, big box retailers and Internet retailers both threaten local communities and smaller businesses. One may be more obvious than others and they offer different kinds of conveniences but both can contribute to a less civically minded and placed America.

The suburban expansion strategy of Sears in the 1920s

In an intriguing article comparing the rise of Sears and Amazon, Derek Thompson explains how Sears expanded from a mail-order business to physical stores:

In the early 1920s, Sears found itself in an economy that was coming off a harsh post-World War recession, according to Daniel M. G. Graff and Peter Temin’s essay “Sears, Roebuck in the Twentieth Century.” The company was also dealing with a more lasting challenge: the rise of chain stores. To guide their corporate makeover, the company tapped a retired World War I general named Robert Wood, who turned to the U.S. Census and Statistical Abstract of the United States as a fount of marketing wisdom. In federally tabulated figures, he saw the country moving from farm to city, and then from city to suburb. His plan: Follow them with stores.

The first Sears stores opened in the company’s existing mail-order warehouses, for convenience’s sake. But soon they were popping up in new locations. Not satisfied with merely competing with urban department stores like Macy’s, Wood distinguished new Sears locations by plopping them into suburbs where land was cheap and parking space was plentiful….

The company’s brick-and-mortar transformation was astonishing. At the start of 1925, there were no Sears stores in the United States. By 1929, there were 300. While Montgomery Ward built 90 percent of its stores in rural areas or small cities, and Woolworth focused on rich urban areas, Sears bet on everything—rural and urban, rich and poor, farmers and manufacturers. Geographically, it disproportionately built where the Statistical Abstract showed growth: in southern, southwestern, and western cities.

So what is the equivalent today of the burgeoning suburbs of the 1920s in terms of locations? The end of the article hints at one option:

Amazon, too, will thrive as long as it uses American demographics as a roadmap and takes advantage of new personal technology, like mobile phones for shopping and AI assistants for the home. In the last six months, Amazon has spent $13 billion to buy Whole Foods and its upscale urban locations. At the same time, it has offered discounts for low-income shoppers to become Prime subscribers.

Locating in wealthy communities is an interesting strategy. Other major popular retailers today are following such a model: think of Apple stores (perhaps another reason they cannot truly be town squares if they are primarily in wealthy areas) and Starbucks locations (less exclusive than Apple but still located within reach of wealthier customers or along well-trafficked roadways – see all 11 locations in the wealthy suburb of Naperville). Could we end up with a bifurcated retailing model where the wealthy (and those who can travel to these locations) can shop at a bricks and mortar store while the majority of Americans primarily shop online? This might be an overlooked edge for Walmart at this point: Amazon may rule online but Walmart stores, like Sears, are where many more typical Americans are and it may take some time to switch loyalty.

A new suburban Walmart comes with tax revenue, crime, and economic development

How exactly does a new Walmart change a suburb? Here are at least a few factors to consider:

From its opening day to June 30, 2017, officers responded to 445 calls for service at Walmart, 166 of which resulted in arrests, according to records obtained by the Daily Herald. That means police were called to the store an average 1.2 times per day in its first year…

Walmart announced in 2012 its plans to close an East Dundee store and build the Carpentersville supercenter less than three miles away, prompting a lengthy legal battle between the company and the two villages. Walmart is expected to receive $4.3 million in tax increment financing funds ­– property taxes above a certain point in the area that would have gone to local governments — for the new store…

Though he declined to disclose specific sales numbers, Rooney said the new Carpentersville store has generated more sales tax revenue than East Dundee reported losing…

Already, the supercenter has significantly increased traffic and economic interest on the village’s east side, he said. Plans are moving forward for constructing a new five-tenant building and an O’Reilly Auto Parts on the store’s outlots.

To be honest, many suburbs cannot afford not to welcome Walmart into their communities. It is rare to find a user for a decent sized portion of land along a major road that will bring in so much tax revenue and provide jobs. The increase in crime can be chalked up as simply part of doing major retail business (I assume there may be bumps with other major retailers or shopping malls) and may not be a huge issue if it is largely isolated to the Walmart site.

In the long run, there are additional factors to consider including the local business climate with the behemoth Walmart in town (more competition for certain businesses), the opportunity cost of what else might have operated on that site, and the image of having a Walmart and related businesses. There is a reason more exclusive communities turn down big box stores and large strip mall areas. Furthermore, the fate of East Dundee could soon befell Carpentersville; if Walmart eventually wants a better deal or a bigger store, they can simply move and bring their benefits (and problems) to a different suburb.

As I suggested above, given these short-term and long-term outlooks, most American suburbs would choose to welcome Walmart. From whence the Walmart came does not matter while the tax receipts can be blinding to many.