Millennials Catalyst for Retail Transformation of Center City Philadelphia
As consumer shopping habits continue to evolve and shoppers get younger, retailers are trying to strike the right balance between their online and physical presence. Those that find this omnichannel harmony are thriving in cities across the United States. Philadelphia’s Center City, in particular, is capitalizing on its booming millennial population and attracting retail concepts that cater to this group.
According to Center City District’s 2018 State of Center City Philadelphia report, millennials make up 40 percent of Philadelphia’s downtown population, one of the highest percentages in all U.S. cities. With millennials moving into the peak spending years of their lives, Philadelphia is experiencing a multitude of development with most of the focus being on mixed-use.
Mixed-use development, which combines retail and residential, and sometimes office, is attractive to the millennial generation who are driven by convenience and want the ease of living, working, dining, and shopping all in one place.
The largest retail development projects Center City is seeing right now are happening in the Midtown Village neighborhood, which had been largely neglected until recently when it comes to large mixed-use developments. A few notable projects here are The Collins, a residential community that features 90,000 square feet of retail and includes Target, PetSmart, Starbucks and Fine Wine & Good Spirits as well as East Market, which includes T.J.Maxx, Iron Hill Brewery & Restaurant, Mom’s Organic Market, Wawa and District Taco.
The other trend in Philadelphia currently being driven by millennials is the emergence of microbrands — small-scale brands that typically originate online — which are now expanding into physical stores. This “clicks-to-bricks” movement has taken Philadelphia by storm as native online retailers are beginning to realize the need for a physical store presence to fully reach all of their potential customers. Some of these retailers who have recently opened physical locations in Philadelphia include Bonobos, Warby Parker, Marine Layer, UNTUCKit, Brandy Melville, and Carvana.
Microbrands will continue to keep Philadelphia’s independent retail flavor alive as they complement the more traditional retailers who have recently emerged in the downtown shopping districts.
Center City Philadelphia is a microcosm of the state of urban retail across the U.S., as the millennial generation continues to shape and mold retail into what it is today. Younger consumers want convenience and experiences, both online and in-store, and the latest retail brands at their fingertips.
Moving forward, it’s imperative that developers and brokers stay on top of the demands of this demographic and build and lease their projects accordingly.