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Page 20 — Retail Properties Quarterly — November 2016
D enver is a hot city
for millennials on
the move. Accord-
ing to data collected
by the U.S. Bureau
of Statistics, Denver is one
of the fastest-growing cities
in America. The Mile High
City is consistently listed as
one of the
top des-
tinations
for young
profession-
als, due in
large part
to the city’s
healthy
and grow-
ing econo-
my.
Millenni-
als, aged 18
to 34 years,
account for
roughly 35 percent of Den-
ver’s population and will
have a large influence on
the future of retail in Den-
ver, just as they are driving
changes in the national
retail market. Millennials
are the largest cohort in U.S.
history. In 2015, there were
roughly 92 million people
between the age of 18 and
36, compared to 61 million
Generation Xers, aged 36-50,
and 72 million baby boom-
ers, aged 51 to 70. As they
age, millennials will have an
immense impact on the U.S.
retail market and economy
as a whole; by 2020, mil-
lennials will make up the
majority of the American
workforce.
As young professionals
flow into Denver, the city’s
retail market is expanding
in all directions. Employ-
ment in Denver is up 3.2
percent over the last year,
and total retail sales are up
1.3 percent from February
2015 to February 2016. The
new light rail, completed
in April, has expanded
Denver’s retail boundaries,
transforming once inacces-
sible locations into land ripe
for development. The Retail
Attraction Program, devel-
oped by the city’s Office of
Economic Development, is
pushing to attract first-in-
market retailers.
On the downside, as
demand continues to grow
and supply is strained,
rental rates in Denver have
increased 35 percent since
July 2013; some Denver
businesses have seen their
rent increase by as much
as 300 percent since they
opened their doors. This is
forcing retailers in Denver
to downsize or relocate
their storefronts, moving
from high-rent districts like
Cherry Creek and Capitol
Hill to lower-rent areas like
Englewood, South Broadway
and River North.
This year, retail construc-
tion grew 24.4 percent year-
over-year nationwide, with
most of the growth coming
from renovation of existing
storefronts. Retailers have
been moving quickly to
keep pace with new buyer
expectations.
Nationwide, large store-
fronts like Macy’s and Bed,
Bath & Beyond are suffer-
ing because they are losing
their appeal with shoppers,
many of whom are millen-
nials, who are less inter-
ested in “stuff” and more
interested in experiences.
This shift in what motivates
shoppers, who would rather
buy a plane ticket than a
luxury handbag, poses a
major challenge for brick-
and-mortar businesses. The
“social generation” is chal-
lenging retailers to adapt
to their new buying habits,
which are influenced, in
large part, by their online
presence.
Dramatic visual impact of
a store’s space is even more
important in the age of
social media, where many
shoppers go to learn about
retailers and brands. Brand
loyalty is built predomi-
nantly by social means or
word-of-mouth. Forty-four
percent of millennials claim
to communicate about a
brand by text message,
while 38 percent communi-
cate by social media. Now,
more than ever, it’s ben-
eficial to have a storefront
that generates buzz – where
customers walk in and pull
out their phones to share a
photo on Facebook.
Last year, Restoration
Hardware premiered its
flagship store at Cherry
Creek Shopping Center in
Denver, renovating the four-
story, 58,000-square-foot
space once occupied by
Saks in the style of its new
“mansion concept,” a reno-
vation effort the company
is using across the country.
This is an example of turn-
ing lemons into lemonade.
While malls across the
country are struggling to
stay open, RH saw an oppor-
tunity to enter new mar-
kets and brand its stores as
destinations. By creating a
unique space, the company
encourages buyers to step
beyond the screen and into
its storefront.
Even if the product you’re
selling stays the same,
changing your presentation
can be a big game-changer.
Ralph Lauren experienced
lackluster sales in recent
years, due to the overall
slump in department store
sales. Last month, the lux-
ury clothing store unveiled
a redesigned flagship
storefront in Beverly Hills,
featuring the store’s first
interactive, touchscreen
handbag salon. This innova-
tive feature – along with a
collection of high-end fin-
ishes and products – helps
to establish the Rodeo Drive
Ralph Lauren as a destina-
tion shopping experience.
Pictures posted on RL’s Ins-
tagram of the new store,
with all the Hollywood
glamour of a millionaire’s
mansion, have generated
over 35,000 likes.
As Denver’s popularity
continues to grow, national
and international retailers
are taking notice. Japanese
retailer Uniqlo – popular
with millennials for its
affordable, trendy clothes
– opened its first Denver
store at 16th Street Mall
in October. The Denver
store is Uniqlo’s second
U.S. store not on the East
or West coast. The retailer
has the name recognition
and social-media savvy to
attract millennial buyers to
the 16th Street Mall, which
has struggled in recent
years as traditional depart-
ment stores left downtown
Denver.
Millennials are drawn to
Denver for the growing job
opportunities and beautiful
scenery. As the city con-
tinues to grow and attract
first-in-market retailers,
Denver has the potential
to become a top-shopping
destination.s
Tom Rockstad
Account manager,
Rand* Construction
Corp., Denver
Retail Trends
While malls across the country
are struggling to stay open, RH
saw an opportunity to enter new
markets and brand its stores as
destinations. By creating a unique
space, the company encourages
buyers to step beyond the
screen and into its storefront.
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