Design Talk by MV no. 10 - An Inside-Out Look at When Business Happens From the Outside-In

One of the beautiful things about New York City is its local integrity: the bodega, the laundromat, and the pharmacy are all within a stone’s throw. So what happens when new types of industry move in? What is the city’s response? And how do we stay afloat?

“Sometimes, I think there’s a kind of emerging new male jerk persona of the digital age,” said Silicon Valley impresario Jaron Lanier. Talking to Maureen Dowd of the New York Times, he acknowledged this new character of power players resulting from the digital age. He continues, saying, “There’s this sort of smug, superior, ‘I’ve got the levers of power, and I know better than you.’” He said it first. And, because he comes from that same world, we can assume he said it best.

What we’re witnessing, as a major factor of the disruption of the dot com industry, is the emergence of companies created from the outside in, versus the inside out. In other words, the majority of tech start-ups are helmed by techies, not by experts in the fields they’re moving into. And they’re steering ships with a grand amount of hubris: “I know better than you.” Many have consultants or art directors to help them appeal to their customer segments, but they lack a comprehensive understanding of their market. This article (which I also cited last week), “Venture Capital is Terrible at Online Shopping,” does a great job chronicling this phenomenon. 

Now, New York City is in the running for the talked about Amazon HQ no. 02, and is pining for the corporation’s affections. There’s no doubt that Amazon would bring jobs to the city, and that its business constitutes an economic asset. But what we need to consider is the cost in civic and cultural capital: what’s lost, or rather, left to the wayside, when these representatives of homogeneity move onto our city’s (or your city’s) turf?

Part of the beauty of New York is the locality of its communities and its services. Each neighborhood is a microcosmic commercial and civic unit. You have your bodega, Laundromat, and pharmacy within a few blocks’ radius. The same services three blocks over just don’t feel like home. When big brands move in, whether their footprint is as huge as Amazon’s or as small as Duane Reade’s, they’re often displacing businesses with authenticity and a local spirit. Very often, they’re displacing things we need – like hardware stores, grocery stores, butchers, or drycleaners that are owned and operated by people invested in and understanding of their neighborhoods – with things we don’t need – luxury luggage retailers, perfume shops, “showroom” shops that don’t offer points of purchase on-site. To again use NYC’s SoHo neighborhood as an example, these types of luxury stores and disposable/fast fashion mega-retailers have rapidly populated the busy arteries of the neighborhood, displacing the small or local businesses that had offered accessible goods and services to their residents. Despite their general inaccessibility, nowadays many of the neighborhood’s commercial incomers are taking over retailers simply as advertising or PR ploys. Their lax investment in their neighborhood and in citywide ecosystems doesn’t make for a sustainable relationship to existing currencies of social and cultural capital. Brooklyn Councilman Robert Cornegy, the chairman of the Committee on Small Business, said it perfectly: “You can tell the character of a community by its retail corridors. Every community is beginning to look exactly alike, having the same bank and a popular [chain] eatery or coffee shop instead of the older mom-and-pops."

An important irony exists here, in that amidst each of these homogenizing municipal-commercial endeavors, the entire structure of consumer habits is also changing. This, of course, is largely attributable to the Internet age. Online retail decreases the urgency to purchase in-store; there’s less foot traffic overall because people are either tethered to their screens or simply recognize convenience in them; and there are so many new products introduced or suggested to us all the time that we’ve become desensitized to the joy of discovery in “real life.” That said, businesses like Amazon are important responses to these habits and new types of consumer “needs” – I wholly acknowledge that. What we need to be cautious of, at the same time, is that this oversaturation factor of new products and information is happening, paradoxically, at the same time that U.S. cities are oversaturating their real estate footprints with homogeneous businesses/services. To put it into perspective, according to the International Council of Shopping Centers (ICSC), the United States has six times the amount of retail square footage per capita than the UK. There are simply too many options, in our faces, all the time, and the ways in which we’re allowing our cities to respond to that need to remain conscious of the commercial infrastructures already in place.

In Mayor DeBlasio’s 2017 jobs report, the city outlines a proposal to introduce 100,000 new, “good-paying” jobs. The proposed amount of additional jobs in the industrial/manufacturing and creative/cultural sectors equals the proposed amount of additional tech jobs: 30,000. That’s a reassuring, if optimistic, commitment by the city to pursue diverse types of industry. We can hope the city stays committed to that equality of the projects, vocational ecosystems, skillsets, and trades it’s proclaiming support for. And we can hope it’s followed through on, for the sake of the designers, small businesses, micro-manufacturers, and all the independent voices making great work, offering great services, and committed to and invested in their communities.

One final point: Commercial retail rents have been escalating, just as retail has been taking a hit. Part of the explanation for so many empty storefronts across the U.S. is that owners have mortgage responsibilities to banks based on the frothy commercial rental rates of yesteryear. Those owners cannot accept leases for less than the promised rental income they quoted in order to acquire large mortgages – that is, without jeopardizing the mortgages. This catch-22 situation is contributing to the stress on retailers.

I love New York. And I know that development and growth and change are all a part of its character. I hope, though, to hold the city accountable for its actions and dictated values, and to maintain a supportive political and economic infrastructure for all different kinds of development, growth, and change. I also recognize that responsibility for the current shifting retail economy is, in part, in the hands of retailers and businesses. We can contribute to our economies in sustainable, lucrative ways with solutions like retail sharing, relevant programming, and creative partnerships. In these ways, we can position ourselves – as creative businesspeople and retailers – for a softer landing and less carnage as the current retail market adjusts and figures out its future.

Till next week,

As told to Emily R. Pellerin

Next week, I’ll jump into the value of knowing my neighborhood and my neighbors, and talk about how retail sharing is a solution for business owners that’s preceded by that analog sociality. It’s a realistic, creative response to the reality of today’s marketplace and today’s consumer, and it’s a beneficial way to think about the future of independent retail.