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Street Commerce

Street commerce is deeply intertwined with myriad contemporary urban visions and planning goals and has become an increasingly prominent issue in urban areas. In Street Commerce, Andres Sevtsuk offers a comprehensive analysis of the issues involved in implementing successful street commerce and suggests innovative solutions.

Street Commerce
Creating Vibrant Urban Sidewalks

Andres Sevtsuk

2020 | 296 pages | Cloth $39.95
Sociology / Business / Public Policy
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Table of Contents

Introduction
Chapter 1. The Predictability, and Unpredictability, of Street Commerce
Chapter 2. The Survival of Individual Stores
Chapter 3. How Stores Cluster
Chapter 4. Coordinated Clustering: Business Improvement Districts, Co-ops, and Malls
Chapter 5. Location, Location, Location: How Retailers Gravitate to Homes, Workplaces, and Pedestrians
Chapter 6. How Urban Design and Building Typologies Affect Retail Location Patterns
Chapter 7. How Demographic Shifts and E-Commerce Are Reshaping the Retail Landscape
Conclusion

Appendix
Notes
Index
Acknowledgments


Excerpt [uncorrected, not for citation]

Introduction

On a sunny Sunday morning in London, my wife and I were having coffee and making plans for the day. We both had to take care of some shopping—she needed a dress from a store she likes, I had looked up some shoes and jeans online but wanted to try them on in person. We thought of having brunch in a park with friends and doing something fun in the afternoon.

Leaving the house, we walked through our neighborhood to Upper Street, the nearest high street, as they call main streets in the UK. We figured we should be able to take care of all the shopping there, given the choice of numerous clothing stores and a small urban shopping center at Angel Station. Sure enough, after checking Google Maps on our phones, we found a number of stores that she trusted for dresses and I for jeans and shoes. We walked by an eclectic mix of businesses, including a flower store, a local ice-cream maker, and a pop-up designer boutique—as well as several pubs full of Arsenal fans, whose home stadium wasn't far away. Within half an hour of browsing, we had both nailed what we were looking for. We then decided to grab some coffee to go from Coffee Works and caught a bus to Victoria Park, where there is a charming café called the Pavilion that reminds me of the Boat House in New York's Central Park with a more casual atmosphere. On a Sunday morning, it attracts joggers, parents pushing strollers, and occasional bohemians.

Celebrating our shopping success, we met up with our friends who lived close by for brunch. At some point, the conversation drifted to a new Russian film our friends had recently read about called Leviathan. It had just won the Palm d'Or in Cannes. We started wondering whether any theater in London would be screening it. As an independent festival film, it was not one you would expect to find in Odeon, Vue, or AMC-type theaters. Reaching again for Google in our pockets, we learned, to our surprise, that five different theaters were playing it that very afternoon in London.

We picked out the Curzon Theater in SoHo, which we had never visited before, but which had a screening in 45 minutes and seemed perfect. We walked to the Central Line, and within thirty minutes or so, we got off at Tottenham Court Road, a few hundred yards from the theater, and made it just in time for the opening titles.

It was a good film. At the end, it took us some time to get out, since the plot had sunk us both deep into thought about the intractable scale of corruption in post-Soviet Russia. As we finally made our way past the bar, out onto Shaftesbury Avenue, my wife suddenly remembered that she had also wanted to get some Erik Satie scores for piano. "Should we look up music stores in SoHo or head home? We have guests coming over for dinner soon," she said. We decided to head home, noticing that the 38 bus stop, which would take us right back, was just down the block. As we turned the corner and walked along Charing Cross Road to the bus, we came across Foyles—a popular bookstore in the UK. Because it was right at the bus stop, we decided to pop in and ask if they had any piano scores. If they did, we thought to ourselves, we would be unlikely to find Satie's, but at least they might be able to suggest where else to look.

The lady behind the counter told us to check the music section on the third floor. We took the stairs, walking past two floors packed with literature from all over the world, and arrived on the third, full of music-related publications. Another clerk pointed us to a set of large-format metal drawers at the end of the room, which looked promising. I walked over and opened a drawer. It was full of Bach and Brahms scores. The next one was full of Chopin. A few cabinets down, there were Rachmaninoff, Tchaikovsky, Tubin. And then, under "S," I discovered a whole collection of Satie scores. This was completely unexpected. My wife had only thought of Satie five minutes earlier and neither of us imagined coming across a whole collection right there. She chose her favorite pieces, and with the scores in hand, we descended back down to Charing Cross Road and caught the bus home.

As we stared through the front window on the bus's upper deck, we passed through tree-lined streets bustling with businesses and people of all ethnicities and backgrounds. We discussed our amazement that we had been able to find all we needed within a few hours in the city—we both found the garments we were looking for; Leviathan was playing not only in Curzon, but in four other theaters; we stumbled upon a store selling Satie scores; we encountered interesting people and businesses we hadn't seen before along the way; each bus or train that we took was no more than a couple of blocks away; and we still planned to stop by a vegetable stall near our house to pick up tomatoes, peaches, and fresh dates from Iran for dinner. We wondered whether all this had something to do with London's claim to being the greatest city in the world.

Napoleon is said to have called England a nation of shopkeepers. The shops and services that London offers, and the convenience with which they are connected on foot and by public transit, certainly capture in a very palpable manner the convenience, diversity and all-around quality of life that the city offers. I have seen a shop dedicated to umbrellas in London — hundreds and hundreds of different umbrellas — a store selling only hats, and a taxidermy store selling full-scale mounted animals. There are restaurants that specialize in Georgian, Burmese, Ethiopian, Nepalese, or Singaporean cuisine, as well as fancy department stores such as Fortnum & Mason or Harrods that attract people from all over the world.

But this wide-ranging choice of merchandise and services is not all that street commerce offers. Our stroll along streets rich in people and businesses in London that morning allowed us not only to run errands efficiently and conveniently, it also put us in contact with lots of different experiences we had not planned on encountering—people of different backgrounds and interests, businesses selling odd things, poignant smells from colorful restaurants, unexpected sights and conversations. During our brunch in Victoria Park, we overheard a conversation from a neighboring table about someone inheriting a trust fund. Walking through our neighborhood, my wife and I had peeked into people's houses and admired their kitchen furniture and tall ceilings. On the way out of the cinema, we had a brief conversation with someone from Russia.

Bustling streets, rich in amenities, are social condensers that pull people together regardless of their race, class, age, or religious belief, even if only for brief moments. Unlike the workplaces, families, political organizations, or faith groups that we are either born into or choose to be part of, the people and businesses we encounter walking down city streets are not united around shared kinship ties, interests, or beliefs. Bustling streets put us in touch with "others" who do not necessarily share the same beliefs, interests, or values with us. By fostering dialogic social exchange, streets are part of the glue that holds an urban society together. The more they make us interact, the more we understand and appreciate each other.

In a famous sociological article published in 1977, Mark Granovetter demonstrated the importance of "weak" ties in urban societies. By strong ties he meant the connections we have through our families, colleagues, or other groups we meet on a daily or weekly basis. Weak ties, on the other hand, describe people we meet or talk to only a couple of times a year—at a conference, an event, or just serendipitously on the street. Granovetter demonstrated that weak social ties are more important for social mobility and for spreading information across society than strong ties. For example, he showed that people are more likely to find a job through someone they meet once or twice a year than through someone they see every day.

Experiencing the city on foot along its streets helps generate weak ties—it provides the opportunity for serendipitous encounters with members of our social networks we do not see very often. Furthermore, a walk down a street full of diverse amenities and people also produces what might be called "latent" ties—social connections that do not preexist, but which can sprout from casual encounters, unplanned conversations, or simply eye contact. Some of these first-time encounters can lead to exchanges that grow into weak or even strong ties over time. Just think of the conversations you have started with strangers in a store, restaurant, hair salon, or on the street. This happens more commonly on main streets and other urban retail clusters than on quiet residential streets because these environments attract a lot more users and offer public spaces that are configured to encourage interaction. Streets lined with commerce and amenities thus produce a double benefit for city dwellers—they not only serve the utilitarian function of supplying the urban consumer class with shops, amenities, and services, but they are also instrumental in spurring latent ties and social awareness.

Street commerce can also generate economic and environmental benefits for a city. Smaller and sometimes locally owned stores along city streets tend to produce greater economic benefits for a town than do national big-box chains. A significant share of the revenues generated by small, locally owned stores reverberate back into the local economy via subcontracting from local providers, payments to local employees, and improvements made in the public infrastructure around stores, as well as through indirect investments into employee health and retirement benefits. By purchasing food products from local suppliers, furniture and office supplies from local sellers, or by using local transportation, construction and maintenance contractors can produce a strong, positive multiplier effect on a local economy. One study that compared economic multiplier effects of local versus chain bookstores found that for every dollar spent at a local store, 45 cents circulated back into the local economy. A chain store, on the other hand, spread three times less—13 cents—back to the local economy. Retail transactions typically directly represent around 7% of the local economy, but when combined with those from the various suppliers that support shops and food, beverage, and personal service providers in a town, a more significant share of the local economy is affected. The more integrated a local economy is, the more its wealth passes around to its inhabitants.

From an environmental perspective, retail clusters accessible by foot and by public transit reduce a city's energy bill, contribute to cleaner air, and improve public health. Having a higher proportion of visitors arrive without a car helps lower traffic congestion, encourages exercise, and reduces per capita fossil fuel consumption. According to the 2009 National Household Travel Survey, 70% of all trips in the United States are for shopping, other family or personal errands, or social and recreational trips. If the bulk of trips can occur on foot or public transit, not too far from one's home or workplace, then palpable strides can be made toward reducing both greenhouse gas emissions and energy consumption, while enabling more urban land to be converted from roads and parking lots to functional economic destinations, public spaces, and recreational areas. And when development densities are too low to support street commerce on a local basis, coordinated public transit can facilitate car-free arrival from surrounding districts.

Yet relatively little has been written to explain how the patterns of stores and amenities that make cities so convenient, serendipitous, economically robust, and socially interdependent come to be. What are the forces that shape the amenity clusters that line a city's streets? What determines how much commerce we find in San Francisco as opposed to London? Why do some streets specialize in bookstores and others in only restaurants? Why are some streets used for social and recreational activities that go well beyond shopping or dining? And what can planners, urban designers, and public officials do to foster streets that produce these amenities and interactions? This book tries to address these questions.

A lot has been written about retail location and retail economics. But much of scholarly research on retailing in the 20th century focused on shopping centers, a highly coordinated form of retailing that differs in important ways from the street-based shopping that I am referring to here. Shopping centers are rarely embedded in dense urban neighborhoods, making them less dependent on the sociospatial context that immediately surrounds them. They tend to cater to customers from a whole metropolitan area, who predominantly arrive by car rather than on foot or public transit, leading to a more predictable and less diverse set of encounters.

More importantly, retail space inside shopping centers, whether urban or suburban, is typically jointly owned, enabling them to behave as a single, coordinated entity. "A shopping center is not a building but a management concept, a way common management causes separately owned businesses to behave as one," explained John T. Riordan, a longtime head of the International Council for Shopping Centers (ICSC). In contrast to independent stores competing with or complementing each other in uncoordinated urban main streets, shopping centers leverage the financial benefits of joint management, synchronized leasing, detailed design, and operating guidelines that all stores in a mall must follow. Developers buy the land, develop the structures, and lease them out at variable rates to carefully picked stores, depending on how many customers they are expected to bring in. The goal is to orchestrate an optimal mix that maximizes profits for the center as a whole and establishes tailored financial incentives for individual stores to join the cluster. Stores that bring in the highest number of customers—the anchors—often pay no rent at all or even get multi-million-dollar subsidies in the form of construction, parking, signage, and priority access routes. These anchors, in turn, bring in a lot of customers and spend large sums on marketing and advertising. Smaller stores, which benefit from customer spillovers from the anchors, pay steep leases for these gains. The whole entity operates like a fine-tuned machine. When the output does not match the owner's expectations, individual stores can be immediately adjusted, bringing performance right back to where management wants it.

Street commerce works differently. With numerous independent landlords, no coordinated management structure in place, and no financial incentives to lure in large anchor stores, street commerce behaves less like a machine and more like a farmer's market. There, certain rules apply, but beyond that each store can sell whatever it pleases, whenever it pleases, while paying its landlord whatever it can negotiate. Public spaces between stores—the sidewalks, roads, squares, and pocket parks—are typically owned by a municipality and are regulated by a public legal code that bars private landlords from restricting who can enter or what activities are and are not allowed. What we know about retail economics and planning strategies in shopping centers is thus inadequate for explaining the retail patterns we observe on city streets. The specific factors affecting urban retail environments remain poorly understood among planners.

In the chapters that follow, I try to bring together knowledge that lies in different disciplinary silos to explain how economic, organizational, and spatial forces together shape these shifting retail and service establishment patterns in cities. Contrary to some economists' belief that urban retail environments are shaped purely by market forces, I argue that street commerce is molded by planning and urban-design decisions as much as by the "invisible hand" of the market. I also argue that an array of design and policy tools can be used to enhance street commerce in broadly sustainable and equitable terms. The initiative for their mobilization can emerge from grassroots and civil society organizations, city leaders, developers, or planning professional, but in each case, understanding what mechanisms are available to improve street commerce is a prerequisite. To support this argument, I demonstrate how several successful commercial streets have benefited from deliberate planning and argue that there is a growing need for such efforts as city centers continue to densify and a new generation of downtown inhabitants call for more vibrant city life.

The pattern of street commerce in a city is a good example of what complexity scientists would call an emergent phenomenon. The pattern of stores we observe is a result of many interacting forces that exert their influence in nondeterministic ways, yet they produce a recognizable pattern that we encounter from one city to another. Urbanist Jane Jacobs, for example, described use patterns in city parks like this:

How much a park is used depends, in part, upon the park's own design. But even this partial influence of the park's design upon the park's use depends, in turn, on who is around to use the park, and when, and this in turn depends on the uses of the city outside the park itself. Furthermore, the influence of these uses on the park is only partly a matter of how each affects the park independently of the others; it is also partly a matter of how they affect the park in combination with one another, for certain combinations stimulate the degree of the influence from one another among their components. . . . No matter what you try to do to it, a city park behaves as a problem in organized complexity, and that is what it is.

Street commerce also depends in part on the configuration of the built environment around it—the ways in which a network of streets, public spaces, buildings, land uses, and transportation lines are distributed in the city. These qualities of the built environment enable stores to access more customers in some parts of the city than others. But the influence of the built environment also depends on who lives in, works in, or occupies the buildings and spaces around stores.

Aside from the influence exerted by the external environment around stores, shops within retail clusters also position themselves strategically with respect to other shops. These endogenous interactions pull some stores together while pushing others apart, depending on the degree of competition or complementarity between them. The pattern of stores we encounter at any point in time is, in fact, a snapshot of a complex dynamic process that continuously shifts. It is impossible to explain the pattern of stores we encounter through the exogenous qualities of the built environment or endogenous economic interactions between stores alone—both play a role simultaneously.

Within a year, some businesses will thrive, some will just break even, and others will be forced to close due to insufficient revenue. In neighborhoods where things are going well, stores prosper, new shops open, and developers launch new real estate ventures. In others, visits decline, revenues fall, and shops go out of business. Some stores are replaced while others are vacated and boarded up until times improve.

Scholars in a number of fields have studied these dynamics and have influenced this book. The branch of economics that deals with spatial phenomena is typically called urban or real estate economics, and retail economics forms a part of that. Human and economic geographers have developed ways to map and spatially analyze how retailers distribute themselves across cities, states, and regions. And public policy scholars and political scientists have examined how government oversight and organizational frameworks affect business owners and their location decisions. Scholars in each of these fields have contributed knowledge that can help us explain the retail landscape we observe.

Somewhat surprisingly, urban planning and design literature has exhibited relatively little interest in urban retail clusters. The scholarship that does exist is outdated or focused on very specific aspects of retailing, such as business improvement districts or main street revitalization strategies. With a few notable exceptions, current planning literature also appears to address commercial development in a reactive manner, for example, observing negative externalities, such as food deserts in underinvested neighborhoods. The current generation of planning professionals has been trained to think that retail and service projects belong to the realm of the private sector, and very few planning programs offer courses on commercial planning. The American Planning Accreditation Board guidelines for curricula currently do not require any specialized courses on commercial planning as part of program accreditation. Students thus graduate with a relatively poor understanding of environments and policies that allow street commerce to thrive.

By discussing different factors that shape street commerce, I will address what it takes for shops and service establishments to remain viable, how agglomeration effects and inter-store externalities affect colocation and patronage, how different merchant organizations affect coordination between stores, how location affects store accessibility and visibility, how building types and urban design regulations affect the opportunities for commercial mixed-use ground floors, what planners and policy makers can do to support street commerce, and how e-commerce is likely to influence brick-and-mortar stores. Planning commercial environments requires an inherently multidisciplinary approach—in order for retail clusters to work; their location has to work; interactions between stores and even online sellers have to work; building typologies have to work; access, parking, and pedestrian flows have to work; and organizing agreements between stores as well as public-sector partners have to work. No one of these prerequisites alone is sufficient for achieving sustainable urban street retail and commercial clusters; they all need to align in concert.

In the chapters that follow, I bring the various levers of urban street commerce together for one particular group of influencers—urban planners and designers. When moving from descriptive to normative discussion on how to improve street commerce, I thus generally refer to strategies, tactics, and tools useful to urban planners and designers. There is also plenty of relevance for real-estate development and public policy.

I also suggest that new and innovative strategies are needed to generate equitable street commerce, where gentrification or lack of investment threaten to harm the amenities and spaces that communities depend on. Just like inclusionary housing policies were developed in response to market failures, we need to create inclusionary retail policies to ensure that urban amenities are available for everyone's benefit. Retail establishments that deliver affordable goods and services not only benefit lower-income populations but serve a broader clientele across socioeconomic levels. Cities need not only to address declining main streets and downtowns reactively, but to become more proactive in using financial subsidies, zoning, urban design, and policy tools to foster equitable street commerce.

Street commerce is also currently going through important social and technological changes. Demographic shifts in the United States are producing more unmarried and single-person households, who have different living and shopping preferences than the nuclear suburban family that helped proliferate car-oriented malls across the nation. E-commerce is creating even cheaper and more convenient alternatives to big-box discount stores, driving many such establishments out of business. More flexible work schedules are increasing the share of time people spend on recreational activities and are bringing younger urbanites back to city streets, looking for new types of experiences. I explore these transitions in the penultimate chapter of the book and propose some strategies and tactics that planners and urban designers can use to cope with the new realities of brick-and-mortar retailing.

The book is organized as follows. Chapter 1 starts with a big-picture overview of how retail and services clusters are distributed across US cities. Borrowing insights from recent work on urban scaling laws, I explore how predictable, as opposed to unique, the spatial pattern of stores actually is. The chapters that follow examine the different factors that explain these patterns. Chapter 2 provides a microeconomic perspective, exploring the factors that affect the economic sustainability of individual stores and limit the density of competing stores. Chapter 3 discusses why stores tend to cluster and the forces and dynamics that lead complementary or competitive businesses to locate next to one another and how such decisions can make stores better off. Chapter 4 also discusses clustering, but from the perspective of how a number of businesses together can decide to organize around business improvement districts or associations to further common interests. Chapter 5 discusses how location affects street commerce, examines what qualities of the built environment retailers are most attracted to, and describes how retail agglomerations work as a system—how changes in one cluster are bound to affect other clusters around it and vice versa. Chapter 6 explores how architectural typologies and urban street design affect stores—qualities that zoning and urban design can directly affect. Chapter 7 explores how both e-commerce and changing demographics are shaking up brick-and-mortar commerce today, and the Conclusion summarizes key takeaways and discusses the role of street commerce in making cities more diverse, equitable, and walkable in the 21st century.

I illustrate the spatial patterns of street commerce with several examples. I use Cambridge and Somerville, Massachusetts, both part of the Boston metropolitan area, as examples of historic East Coast cities with rich legacies of street commerce that have been shaped by British colonial street patterns as well as streetcar lines in the early parts of the 20th century. Los Angeles, California, offers a counterexample—it is a fairly new city, dominated by the car, but still rich in walkable street commerce. The island city-state of Singapore offers lessons from the perspective of a strong state using top-down planning, which can at times produce remarkable results in urban development but also risks dampening private initiative and diversity. Post-Soviet towns in Estonia offer a natural example to explore the relationship between urban design, transportation policy, and retail development—they exemplify how a sudden departure from a state-controlled socialist economy to a liberal market economy played out in retail location patterns. The Indonesian city of Solo offers insights into retail development in increasingly pervasive conditions of rapidly developing cities in the Global South, where the economy is characterized by semiformal actors, weak government institutions, and rapid growth.

These examples come from different spatial, historical, political, geographical, and cultural contexts. They do not constitute comprehensive case studies of any place in particular but are instead meant to offer grounded illustrations of specific cultural, historic, architectural, and economic factors that shape street commerce in different contexts around the world. They illustrate how street commerce is not only shaped by environment and context but also conscientious policy, planning, and design.

The structure of the book is thus itself similar to the experience of wandering through bustling streets rich in encounters and experiences—not so different from the experience I recounted from the streets of London at the beginning of this Introduction. Rather than a linear, predictable trajectory of getting into a vehicle and driving to a predetermined destination, the story weaves past serendipitous, occasionally surprising, and hopefully richer experiences than you might have initially expected when you set out and picked up the book. The forces shaping street commerce are multidisciplinary and complex, and so is the order of their appearance throughout the chapters.

The various examples used throughout the book also emphasize that making street commerce work is not a uniquely American, European, or Western challenge, but indeed an issue for cities around the world. Opportunities for developing streets with vibrant commercial clusters exist everywhere. Recognizing and capitalizing on these opportunities requires a better understanding of how street commerce works and what city planners and urban designers can do to help it thrive.

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