With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.
Issue link: http://digital.canadawide.com/i/1515520
25 B C B U S I N E S S . C A M A R C H 2 0 24 Illus t rat ions: iS tock / lasagnaforone /shuoshu /gri v ina and its rebound effects (must travel! buy stuff! experience everything!), the emer- gence of "omnichannel" shopping, the fraught tussle over where everyone is going to work and the current provincial govern- ment's drive to massively increase hous- ing density in major cities. Hovering over the landscape at the moment is the storm cloud of the highest interest rates and con- struction costs to be seen in 20 years. But Vancouver is likely to be ahead of or quite different from many other cities in its new incarnation, because of the particu- lar characteristics that shape life and land use here: a tightly constricted land base; a well-thought-out and functional rapid- transit system; and big influxes of tourists, students and immigrants from all over Asia. "Vancouver is setting the standard for what retail, and in particular malls, can be in North America," says Vancouver-based Ian Thomas, who spent four decades as an international retail consultant. "There are at least 12 malls being repurposed, and a lot of it is related to the LRT. That's why Vancouver is having this amazing success." Vancouver mall owners are taking the ideas popularized by Los Angeles devel- oper Rick Caruso a quarter-century ago and hyper-driving them. Caruso believed that malls could become the new town centres, the modern crucibles for thriving urban life. He worked primarily in California, so that meant most of his village-centre malls (The Grove in L.A.'s Fairfax district is prob- ably the best-known to British Columbians) still require a lot of vehicle miles travelled by customers. In Metro Vancouver, the transit connections—a vastly different pic- ture from struggling malls in the U.S. that are isolated at the intersections of giant freeways and are unlikely candidates for urban-style densification—help take malls to a new 4.0 or 5.0 stage from their first iterations in the 1960s. That's the big and somewhat utopian picture. Within it, there are dozens of larger and smaller transformational shoots sprouting, some of which will grow and blossom while others may wither after a brief spurt. IT'S NOT UNIQUE TO VANCOUVER, but shops with stuff in them are on the rebound. Yes, online shopping is still increasing at a higher percentage but that's because it's a smaller base. (When online shopping boomed at the start of the pandemic, it went from a 3.9 percent share of total retail to 6.2 percent in 2022.) But what people in the retail universe are seeing is something they call omnichannel shopping: People are buying things every which way. They shop in malls and on main streets. They buy in person and online. They go to giant big-box discounters and they patron- ize small independents. Both Canadian and American analysts and stats-gathering agencies have documented the rebound of in-store spending over the past year as people rediscovered the benefits of looking at the physical thing in a shop instead of on a screen from an online catalogue. "The retail sector surprisingly is making fairly strong headway," says Thomas. "With the frustration of returning merchandise and the anguish you can go through, a lot of people are rushing back to touch and feel. Malls have responded, made themselves more open." Amy Robinson, the executive director of LOCO BC, a nonprofit that focuses on small-business issues, agrees that in-person shopping is seeing a comeback, especially here. "B.C. consumers emphasize more seeing the product in person," she says. A survey by the Canadian Federation of Inde- pendent Business this year found that people in B.C. and Saskatchewan are the most likely of all Canadians to shop at a local store—only about one in five, still, but certainly better than the tiny 7 percent of Albertans in that category. There's a cloud, though. Many small retailers are thinking of throwing in the towel, says Robinson. They can't find labour, inflation has been a killer, many of them owe money on their pandemic loans, and com- mercial leases continue to be mind-bogglingly expensive as tenants are required to cover the property taxes on buildings where assessed value is pegged to development potential. If that incipient trend swells, it could mean a kind of mass extinction of small retail in the region. So what happens in the next 30 years will depend on what different levels of government, along with the private sec- tor, do to sustain them. In the ideal 2050, cities have found ways to ensure a place for small, local businesses by creating new policies to support them: tax relief, requirements for suitable spaces built into new develop- ments, more public messaging about their important role. And private developers could help by finding more ways to include small, local busi- nesses in their projects—something Robinson says is starting to happen (see Trend 3). Trend # 1 In-person shopping came back, baby. But online didn't go away. We're living in the "omnichannel" world of consumption now.