12 Ways to Expand Your Sales Tax Base C. Kelly Cofer, CEO - The Retail Coach 2012 Spring/Summer Conference | June 12 Washington Economic Development Association Spokane, Washington

ABOUT THE RETAIL COACH We develop and execute high- impact retail recruitment and retention strategies From start to finish: retail recruitment is The Retail Coach’s only focus. C. Kelly Cofer President & CEO Aaron Farmer Vice President Austin Farmer Regional Project Director

CONSUMER CONFIDENCE HITS THE HIGHEST LEVEL IN OVER FIVE YEARS IN MAY 2012! Highest level since October 2007, according to the Thomson Reuters/University of Michigan. The index rose increased to 79.3 from 76.4 the prior month. Decline in gas prices and an improving housing market is helping offset slower job growth and volatile stock prices. Source.

NATIONAL IMPACT OF RETAIL 24% of jobs in the United States are directly or indirectly supported by retail 2.5 Trillion: Retail’s total impact on America’s GDP Source.

IMPACT OF RETAIL FOR WASHINGTON STATE 71,939 Retail Establishments 602,477 Direct Retail Employment 881,938 Total Retail Employment Impact $18,162 Direct Retail Labor Income ($million) $33,402 Total Labor Income Impact ($million) $29,621 Direct Retail GDP ($million) $56,782 Total Impact GDP ($million) Source.

RETAIL MEANS JOBS IN WASHINGTON STATE 17% Retail’s total impact on Washington's GDP 1 in 4 Washington jobs are supported by retail Retail supports 881,938 jobs in Washington Retail directly & indirectly generates 16% of labor income in Washington Source.

Washington Retail Trade Association is aggressively seeking retail sales tax fairness with online retailers, many of whom do not collect sales tax. Affects brick-and-mortar site's ability to compete Affects retail industry's job creation Source: WHAT CAN YOU DO IN YOUR COMMUNITY?

12 WAYS TO EXPAND YOUR SALES TAX BASE

LOOK AT YOUR COMMUNITY THROUGH THE EYES OF A RETAILER, DEVELOPER AND/OR INVESTOR

FIRST IMPRESSIONS ARE IMPORTANT Retailers look to minimize risk and maximize profit. - Community appearance - Pride of ownership (residential and commercial) - Functional infrastructure - Evidence of crime - Codes and code enforcement - Downtown vitality

RETAILERS ARE LOOKING FOR OPPORTUNITIES – NOT JUST SITES Understand the retailer’s essential location factors: Visibility Accessibility Regional exposure Population density Population growth Operational convenience Safety and security Adequate parking Adequate signage A location/site must have each factor in order for a retailer to be successful.

RETAILERS WANT TO LOCATE IN COMMUNITIES THAT OFFER RESIDENTS EVERYTHING Downtown district Business activity Commerce Social life Entertainment

KNOW YOUR COMPETITION Know your competing communities’ advantages and disadvantages Know the location of their retail submarkets Be familiar with their retail recruitment programs Know how your community stacks up against competing communities in terms of socioeconomic factors

KNOW YOUR COMPETITION Have an understanding of what incentives communities your size are offering retailers and developers. Be careful about entering the incentives game.

Know your advantages and understand your challenges. Address challenges by coming up with an actionable “to do” plan based on priority. Retailers, developers and/or investors want to know that something is being done. Retailers, developers and/or investors look for stable or improving communities where their risk is minimized. PERFORM A SWOT ANALYSIS OF YOUR COMMUNITY FROM A RETAILER’S PERSPECTIVE

KNOW YOUR RETAIL TRADE AREA #3

RETAIL TRADE AREA DYNAMICS A Retail Trade Area is the largest distance consumers are willing to travel to purchase retail goods and services. The size depends on the variety of goods and services offered in your community and proximity to retail in nearby competing communities. #3

RETAIL TRADE AREA MUST BE ACCURATE An accurate Retail Trade Area is the foundational tool for a retail recruitment strategy. Make certain it is accurate by: Meeting with or interviewing retailers Interviewing survey customers Confirming with license plate survey #3

Market your community to retailers and real estate developers as a Retail Trade Area population, not a community population. RETAIL TRADE AREA MARKETING #3

Primary Retail Trade Area Consumers who are likely to shop in your community more than once per week (where retailers derive approximately 80 – 85% of their business). Secondary Retail Trade Area Consumers who are likely to shop in your community once per week, or once every two weeks (where retailers derive approximately % of their business). RETAIL TRADE AREA PRIMARY AND SECONDARY #3

KNOW YOUR DEMOGRAPHICS #4

Have knowledge of your “area” daytime employment and recognize the importance to restaurants. Restaurants must have healthy dinner and lunch business in order to be successful. DEMOGRAPHICS DAY AND NIGHT #4

Psychographics and lifestyle segmentation have become increasingly important to retailers as they seek to perfect the site selection process. KNOW YOUR PSYCHOGRAPHICS #5

THE RETAIL ECONOMIC IMPACT OF COLLEGE STUDENTS Conduct a student survey to identify: Primary source of income Purchasing habits/frequency % of purchases in/near campus Retailer-type preferences Specific retailer preferences Monthly retail expenditures #5

KNOW HOW MUCH RETAIL OPPORTUNITY EXISTS #6

Consider highest and best use of existing properties and developments, as well as green field sites. RETAIL OPPORTUNITY IDENTIFIES LAND USE #6

Make certain that all real estate brokers, developers and investors use the same market information. Retail Trade Area Retail Trade Area population Demographics Psychographics Retailer gap information Traffic counts Eliminate confusion and minimize questions. DEVELOP MARKETING AND FEASIBILITY STUDIES #7

Have a current aerial photograph of your community and surrounding area highlighting: City limit and ETJ boundaries Major thoroughfares Major retailers/developments Planned/platted residential developments Schools/universities Planned/proposed roads Parks, hospitals Major employers/business parks PRESENT A CLEAR IMAGE #7

BE READY TO SEND INFORMATION IMMEDIATELY Upload all retail information on your website and make certain it is accurate, current and easy to find. This is becoming more and more important. Retailers and developers may visit your community without your knowledge. #7

REACH OUT TO RETAILERS #8

Goal: Get the retailer to the community. Have knowledge of sites that may interest the retailer prior to making the call. SELL YOUR COMMUNITY FIRST, THEN SELL THE SITES #8

THE IMPORTANCE OF ALCOHOL SALES TO RESTAURANTS Moral issue or economic development issue? Extremely important to restaurant recruitment Alcohol sales: 10-20% of a restaurant’s total sales Potential economic impact is significant #8

REACH OUT TO DEVELOPERS #9

Smaller communities must work harder to attract attention Do not abandon downtown Maintain strong residential support around downtown Have a downtown redevelopment strategy Downtowns have become entrepreneur-driven Entrepreneurism increases during economic downturns THE IMPORTANCE OF DOWNTOWN DEVELOPMENT #9

Know the real estate brokers and developers who are active in your area: Have in-house broker functions Make it easy for brokers: they are transaction-oriented Consider a bus tour to showcase properties WHO YOU KNOW MAKES A DIFFERENCE #9

Create a target list of those retailers you would like to meet and set up appointments 60 days in advance Make new contacts with retailers expanding into your area and nurture the relationships BE SEEN AT ICSC EVENTS #10

Have a minimum of two people at the show; one person to attend the booth and one to seek-out prospects Have a strategic plan for making new contacts Set up appointments Have attainable goals and realistic expectations GO IN WITH A PLAN #10

ICSC Next Generation Program & Reception 20 June, 2012 Spokane, WA ICSC Pacific Northwest Idea Exchange 1-2 August, 2012 Stevenson, WA KNOW ABOUT UPCOMING EVENTS #10

Understand your community’s retail recruitment and retention potential and work to manage the expectations of your board and the community. Confidentiality among staff and board members is important. MANAGING PLAN EXPECTATIONS #10

Have a retail retention program. Network with retailer managers as often as possible. They can be your best ambassadors when prospective retailers are in your community. - Drop-in regularly - Schedule breakfasts - Invite them to retreats and board meetings - Appoint to committees/board positions ENGAGE AND EMPOWER EXISTING RETAILERS #10

COMMUNICATE YOUR PLAN WITH ALL STAKEHOLDERS #11 Articulate your community’s retail strategy to everyone, everywhere. Make certain independent businesses understand the overall strategy and how they fit in. Make every attempt to get their buy-in. Rule of Thumb: “If they are not in on it – and up on it – they will be down on it.”

Retail Recruitment is a Process and Retailers Must be Recruited Be persistent – a “no” today might be a “possible maybe” in six months. FOLLOW UP, FOLLOW UP, FOLLOW UP #12

1.Look At Your Community Through Their Eyes 2.Know Your Competition 3.Know Your Retail Trade Area 4.Know Your Demographics 5.Know Your Psychographics 6.Know How Much Retail Opportunity Exists 7.Develop Marketing And Feasibility Studies 8.Reach Out To Retailers 9.Reach Out To Developers 10.Be Seen At ICSC Events 11.Articulate Your Plan With All Stakeholders 12.Follow Up, Follow Up, Follow Up 12 WAYS TO BUILD YOUR COMMUNITY’S SALES TAX BASE

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