Meet our Retail Coordinator

Why Open a Business in Haddonfield?

Retail Recruitment Strategy

Haddonfield, New Jersey

Submitted by:
DOWNTOWN WORKS
August 19, 2003

INTRODUCTION

The downtown business district of Haddonfield, New Jersey has historically been a location for shops, services and restaurants serving the surrounding residential population. To some extent, Haddonfield has also been a shopping destination for regional visitors who were attracted by its historic character and mix of stores.

In recent years, however, the quality and variety of retail stores in Haddonfield has declined. Haddonfield residents use the downtown less frequently, because they are better served elsewhere for the goods and services that they desire. Although Haddonfield contains a great many strong and desirable businesses, the number of weak businesses and inappropriate uses is increasing, as is the number of vacant storefronts. Downtown Haddonfield is in a precarious position – although its retail district is not yet at a critical state, it is trending downwards. Although Haddonfield’s weak retail mix has occurred through natural forces, these same forces cannot be relied upon to return downtown Haddonfield to a healthy and stable mix of successful businesses.

The Haddonfield Business District Task Force issued a report in June of 2002 that delineated the scope of this problem and offered valuable recommendations built upon feedback from residents and retailers in Haddonfield. Downtown Works has been retained by the Borough of Haddonfield to build on the Task Force report and develop a strategy for improving and stabilizing the mix of retail businesses in downtown Haddonfield.

The goals of this project are to:

(1) Create a Merchandising Plan for downtown Haddonfield that identifies which categories should be expanded, and which should be reduced.
(2) Make general merchandising recommendations pertaining to the existing businesses in downtown Haddonfield.
(3) Hire and train a Downtown Retail Coordinator to proactively recruit retailers to Haddonfield, based on the Merchandising Plan.

This document is the Executive Summary of Downtown Works’ findings and recommendations, and will serve as a foundation for the Downtown Retail Coordinator’s leasing efforts. This document also contains recommendations that require action by the Borough or by existing businesses.

MARKET POSITION & COMPETITION

Demographics

Although its population numbers are not particularly high, Haddonfield does offer strong demographics that would be attractive to many desirable retailers. The population is relatively affluent and well educated, with many families, new households, and children. The home values are high in comparison to surrounding areas. These characteristics are helpful in marketing Haddonfield to prospective retailers.
However, Haddonfield’s affluence is not mirrored in the areas surrounding it. Although the income levels to the east are high, the demographics to the west and south are not particularly strong for attracting retail. This is coupled with the fact that the area is low-density in general, which means fewer shoppers within a 1-, 3-, or 5-mile radius.

It should also be noted that there are many more women in the workforce today than in past decades. This has a significant effect on retail, because not only do households now have two sources of income, it also means that women, who are traditionally the family shoppers, are less able to take care of shopping and errands during weekdays. Thus, evenings and weekends become important shopping times.
A key shopper for Haddonfield to target is young people generally – teenagers as well as children. Teenagers tend to stay close to home and often have disposable income to spend on clothing, food, and gifts. They also spend more freely than other shoppers, and are more inclined to buy new items every season, both to stay current with fashion as well as because they are growing quickly. Downtown Haddonfield is an excellent environment for young people because it is perceived as safe, is close to home, has outdoor public space and seating, and is large enough to keep the interest and attention of young people.

Many children and adults use the downtown together, as a family. Thus, it is important to think about the whole bundle of shoppers – the children may want one thing, such as a toy or a skateboard, whereas parents may want another, such as cheese or flowers. It is important for Haddonfield to have a complementary mix of stores in close proximity to each other, in order to serve the family as a whole and increase the amount of time that they spend on a given trip to the downtown.

Although Haddonfield has a significant elderly population, these are not major shoppers or consumers. The focus for retail should be on the younger customers, who spend more freely.

Competition

Residents of Southern New Jersey and the area surrounding Haddonfield have many retail stores and restaurants vying for their money. This area is particularly well served for every type of retail – apparel, home furnishings, food, to name a few. The area also offers many types of retail settings and levels of convenience - malls, strip malls, power centers, and now a lifestyle center at the Promenade at Sagemore.

The physical development of Southern New Jersey is such that automobiles are the dominant form of transportation. Haddonfield is a notable exception in a region desperately lacking in walkable, pedestrian-friendly neighborhoods and business districts. But because of the region’s low-density environment and dependence on the automobile, malls, strip centers and the like are often the most convenient form of shopping.

Southern New Jersey is well populated by national chains, big-box stores, discounters, and so-called “category killers.” This type of retail competition has hurt local merchants everywhere, not just Haddonfield. Small-scale, local merchants cannot compete with these national retailers in terms of price, selection, or money spent on advertising. What they can offer is unique products and selection, a pleasant environment, great service, and a convenient location. In order to compete, then, local merchants need to think of their business as providing a complete experience rather than just a commodity.
The development of the Promenade at Sagemore, a lifestyle center in nearby Marlton, replicated many of the characteristics that previously could only be found in downtown Haddonfield. The Promenade’s streetscape details, architectural style, and mix of upscale stores and restaurants essentially takes many of the elements that make Haddonfield attractive and pleasant, and combines them with strong national retailers that draw shoppers. Certainly, this development competes directly with Haddonfield for certain national retailers. It is for this reason that Haddonfield must be aggressive about creating a unique mix of stores that will encourage people to shop there.

Collingswood, and its nearby retail district on Haddon Ave., has gotten a lot of buzz recently about the new stores and restaurants that are opening there at a rapid pace. For the most part, the stores getting the most attention are the restaurants, which are innovative local restaurants with great attention to good design and details. There are also a number of small shops that offer merchandise that is well presented and creatively displayed. These stores have also invested in great signage, beautiful façades, and clever window displays. Many of these merchants, or types of stores, would also be good matches for Haddonfield. But although Collingswood may compete to some extent with Haddonfield for good local merchants, it would be more useful to both towns to work together and market themselves as complementary, rather than competing, business districts.

Position as a tourist destination

Although Haddonfield is to some extent a destination for tourists and visitors, these visitors should not be a significant focus as Haddonfield develops its retail mix. Haddonfield already has enough stores to cater to a visitor who may visit only infrequently. For these shoppers, Haddonfield’s gift stores, antiques shops, and specialty food stores are a great match. But Haddonfield must also offer attractive retail options to the nearby residents who can use the downtown on a regular basis. Regular use of the downtown by residents for shopping and eating will ensure a healthy and stable business district.

Rent levels

The rent that a retailer can afford to pay is a function of sales. For local, street-front retail stores and restaurants, merchants should be able to pay 8-10% of gross sales as rent, including extras such as taxes. Stores doing less than $300 per square foot annually in gross sales, suggest a troubled business (with some exceptions for certain categories). So, for example, a 2,000 s.f. store that is doing $300 p.s.f. in sales is generating a gross income of $600,000. Thus, the store should be able to afford $60,000 per year in rent and taxes, or $30 p.s.f.

By this analysis, it appears that rental rates in downtown Haddonfield are low, which suggests weak tenants and/or weak sales. Haddonfield’s rental range is more in line with strip centers, which are one of the cheapest forms of construction, and are able to offer low rent because of the minimal aesthetics and amenities found in such locations

The following table offers a comparison of sales per square foot and occupancy costs in some nearby retail locations.

Malls generally have much higher occupancy costs than street-front locations or strip centers, which is one of the reasons why their tenants are almost exclusively national retailers. The higher occupancy costs are due to the additional charges imposed for maintenance and advertising. Due to the high cost of doing business in malls, strip centers, lifestyle centers, and downtowns are becoming more popular choices for many retailers due to their lower extra charges. To some extent, Haddonfield can also benefit from this trend away from mall locations because it also has much lower occupancy costs.

ASSETS & WEAKNESSES

Haddonfield has many assets which are unique, particularly in Southern New Jersey. There are very few remaining downtowns that are viable and in good condition. For nearby residents, Haddonfield provides an alternative to driving and congestion. The atmosphere is safe, pleasant, and beautiful. Storefronts are maintained, and there are no neglected or abandoned buildings. Residents are used to using the downtown and are familiar and comfortable with it.

Physical Conditions

The historic buildings in downtown Haddonfield can be a constraint on some retail uses due to their small footprints. Small footprints obviously limit Haddonfield’s ability to attract certain national chain stores as well as larger restaurants. The size of a store can also limit the sales that a store can achieve. However, most of the uses that are appropriate for downtown Haddonfield can fit within the existing footprints, and with some landlords there is the potential to combine spaces to offer larger footprints.

Architecture and Streetscape

Downtown Haddonfield is walkable and pleasant, due to its architecture, wide sidewalks, and high level of maintenance. The trees, planters, and hanging flower baskets do much to soften and add color to the street, and the many benches offer the opportunity to sit and linger in the downtown. The sidewalks are wide enough to allow for pleasant strolling, merchandise displays, and outdoor seating. Overall, Haddonfield’s streetscape is in excellent condition and is a major asset.

Character

Haddonfield has a hometown, family-friendly feel to it, with significant civic pride and community participation. Downtown Haddonfield feels safe and accessible; a place where families can take walks and teenagers can be left unattended. Residents are already comfortable and familiar with using the downtown, and this is a huge asset. The challenge now is to provide restaurants and shops that suit the residents’ shopping habits, so that instead of just walking through the downtown they go into the stores as well.

Parking
Southern New Jersey is in many ways the epitome of America’s auto-centric lifestyle. Most residents use their cars for transportation to work, to shop, to run errands, and to visit friends and family. With this in mind, it is important for Haddonfield to offer convenient parking options for shoppers who arrive by car.
Downtown Works is not a parking consultant or any type of parking expert. However, Downtown Works can offer some general observations and recommendations regarding parking in Haddonfield and its relationship to the health of its retail.

Currently, parking in downtown Haddonfield is perceived by retailers, residents, and customers to be a significant problem. Many have commented that there is a shortage of parking, and that this shortage is a deterrent to shoppers and those who would otherwise use the downtown.

A rough analysis of number of parking spaces compared to retail square footage in Haddonfield suggests that the town is lacking a sufficient number of spaces given the number of stores in the town. The typical parking ratio in a suburban location, including suburban downtowns, is 4.5 spaces for every 1,000 s.f. of retail space. Haddonfield has approximately 200,000 s.f. of retail space. Therefore, Haddonfield should have 900 parking spaces for its retail uses alone. The number of spaces needed for offices uses would be additional to this.

Currently, Haddonfield has only 581 metered spaces (359 in lots, and 222 on the street), which are the spaces utilized by shoppers. The permit spaces, on the other hand, of which Haddonfield has 272, are utilized by those who work in the downtown or commute from it. 581 spaces for 200,000 s.f. of retail equates to 2.9 spaces per 1,000 s.f. This is 36% less than the recommended number of spaces. It is apparent, then, that there is a significant gap between the number of spaces Haddonfield ought to have to serve its shoppers and its workers, and the number of spaces that it does have.
The price for parking at the meters is low and should not be a deterrent to shoppers. The two hour time limit that Haddonfield currently has on many of its meters is reasonable. Turnover of spaces is desirable, particularly in prime locations, and distances within the downtown are not great if people need to feed a meter. The permit spaces, which are best used for office workers, are well utilized and in almost all cases are oversold.

Although there are a number of municipal parking lots throughout the downtown, the signage for these lots, while attractive and in keeping with the style of the town, is not easy to pick out. In most situations, parking is easy to find for those who are familiar with the town. But for those who are less familiar with the town, parking can be a challenge at certain times of the day.

Another parking issue in Haddonfield is that employees of retail stores tend to use spaces that are close to their stores, which significantly reduces the number of convenient spaces available for their customers. In malls, on the other hand, employees are required to park at the outskirts of the parking lots to reserve spaces close to the mall for the customers. Haddonfield should explore the idea of dedicated parking areas for employees, to free up convenient spaces for potential customers.

It should be noted that almost all desirable downtown retail destinations have parking challenges, but minor parking inconveniences and costs will not stop shoppers from coming if there is something strong to draw them there.

• Haddonfield should explore the idea of shared parking schemes, whereby the borough works with local landlords to consolidate private lots and make them available for public use. This has been accomplished with success in Chestnut Hill, Philadelphia, for example.
  
• Review current parking signage and consider improvements to make signs more noticeable.
  
• Work with a parking consultant to identify ways to increase the supply of parking at convenient locations in Haddonfield. Structured parking could be an option if it is well designed and is in a convenient, high-traffic location. These sorts of public parking structures have been constructed with success in two Pittsburgh neighborhoods, Shadyside and Squirrel Hill, which share many of Haddonfield’s attributes.

DOWNTOWN HADDONFIELD - Number of Stores by Merchandise Type

The following categories are already well represented and should not be expanded:

• Most service uses, particularly hair and nails
  
• Specialty and gifts
  
• Fine jewelry
  
• Floral

The following categories are under-represented and should be targeted for recruitment to Haddonfield:

• Restaurants. Restaurants are one of the most important ingredients in revitalizing a downtown, and Haddonfield should look to expand this category dramatically. Restaurants add energy, vitality, and buzz to a downtown district, and bring people downtown who might not use it otherwise. People value the unique characteristics of restaurants, such as atmosphere, décor, and menu, more so than with other commodities such as clothing. Restaurants also serve a built-in need of all of the residents (eating) and therefore are one of the most viable sorts of businesses for small downtowns. In addition, many people who go to a walkable area like Haddonfield for a meal tend to walk around before or after the meal, and this is an excellent opportunity for them to browse in shop windows and perhaps return later to make a purchase.
  
• Cafes & Coffee Shops. Cafes and coffee shops become frequent and regular destinations for local residents of all ages. As with restaurants, the uniqueness of the café – its décor, food, atmosphere, service – is extremely important, and if done right, can generate strong customer loyalty. The success of Starbucks is evidence of the demand in Haddonfield for casual places where people can meet, socialize, and linger.
  
• Women’s apparel. Haddonfield already has a few fine women’s apparel stores. These stores, however, would benefit from the addition of more fashion and apparel offerings, to create a critical mass of retailers offering a substantial selection of goods.
  
• Shoes & Accessories. Currently, Haddonfield does not have any stores offering items to coordinate and accessorize with women’s clothing. To provide a complete, one-stop shopping experience, stores should be targeted that offer shoes and accessories such as handbags, scarves, hats, and mid-price fashion and costume jewelry.
  
• Bath & Body. This would be a popular category for nearby residents, and currently Haddonfield has only one store (Crabtree & Evelyn) offering these sorts of items.
  
• Children’s apparel. Children’s apparel is often attractive to buy close to home due to the difficulties of traveling distances with young children, as well as the tendency to buy these items as gifts.
  
• Children’s bookstore. A small bookstore specializing in children’s books would be ideal for Haddonfield given the large number of families who live in the area and use the downtown for walks and outings.
  
• Upscale newsagent. A high-quality newsagent with a pleasant atmosphere, offering a wide selection of magazines and newspapers, would be a desirable addition to the downtown.
  
• Used music. A well-run, well-merchandised used CD store would be a great attraction for both teenagers and adults, and give them a reason to browse and linger in the downtown.

Uses to Target

Haddonfield needs unique, exciting, innovative retailers that understand their customer and invest heavily in good merchandising, display, selection, and advertising. These stores do not need to be national chains, and in most cases they should not be. However, these retailers do need to be aggressive businesspeople, who are in retail to be successful and make a profit, not to run a hobby shop.

STRATEGY

Recruitment
The landlords who own property in downtown Haddonfield cannot expect that good retailers and restaurants will come to seek them out. Rather, it is essential to be proactive about recruiting new retailers to the downtown who will improve its merchandise mix and attract additional customers to the downtown as a whole.
The Borough of Haddonfield has already implemented Downtown Works’ recommendation to hire a Downtown Retail Coordinator in order to recruit new retailers to Haddonfield on behalf of all of the downtown’s landlords. The Retail Coordinator for downtown Haddonfield will be responsible for proactively identifying and recruiting retailers to Haddonfield, based on the merchandising scheme in this report. The Retail Coordinator will interface between prospective retailers, landlords, and Borough departments to match new retailers with appropriate spaces in Haddonfield.
The Retail Coordinator will not be paid by commission, and will market all available spaces in Haddonfield equally, with no special preference given to specific landlords or locations. The Retail Coordinator will, however, assist the tenant in finding the best suited space given their specifications for size, amenities, rent, etc. The Retail Coordinator will work with a prospective tenant from initial contact through to store opening, assisting in the permitting process and any other issues that require Borough approval.

Lease Clauses

In malls, strip centers, and other kinds of retail developments, landlords include clauses in their leases regarding operations of the stores in order to protect the health of the retail center as a whole. Haddonfield should adopt a similar strategy by encouraging landlords to incorporate certain clauses into future leases that require high standards of operations and maintenance within the downtown. These clauses will not only protect the landlord, but, more importantly, they will protect the other retailers in the downtown from behavior on the part of certain businesses that would be detrimental to the retail district as a whole.

Suggested content of such lease clauses includes: