Kingsport’s Leaders must start looking to the Future
There is a significant public dialog (nay, debate) ongoing in our community about the future. This is magnificent! It is the logical follow-on discussion that should occur. We should not only accept it; we should embrace it.
The operative term here is “future.” I fear that too much of what we do is focused either behind or laterally, not forward.
In the 1990s, we were a second generation rust-belt community in decline without the features of the new economy. In particular, we lacked the retail, education and public amenities of other communities. We were overlooked by exception and a negative one at that.
We have done much to overcome those shortcomings. We do now look much like other communities our size. Much credit should be given to past leadership that carried through with those projects. However, we have lost our way and the recent attempt to develop a strategy simply falls short.
We see ourselves not as what we could be, but what we are not in comparison to others. They have high end housing; we need that. They have better retail; we need that. They have more tax revenue…we really need that!
The problem with such an approach is that we are not them. We are “us.” And, “us” has some very unique features that both constrain, but can also propel, us into the future. Again, that word, “future.” That is the direction we must focus.
Take retail for example. We are seeing the migration of “Big Box” retailers towards the Pinnacle in Bristol. We are also seeing “some” erosion of our current assets.
Is this something we can stop? Is this all bad? My answer to both is, “Probably, not.”
The market dictates where the private sector operates (simple supply and demand). We could try to “subsidize” retail to stay or locate here, but we have learned that ultimately that is a short-term approach that does not pay off in the long-run.
We tried this in the past with a modicum of success. However, we are discovering that once the subsidies and leases are up, off they go in search of the next tax break.
It is all about demand, not supply. All a subsidy does is distort the market by lowering the cost of supply. Once that is gone, because we have insufficient demand, the market adjusts and the stores leave. This is why the current myopic view that annexation equals growth is bankrupt. It simply rearranges the pieces, not increase the numbers (aka, demand).
So what can we do? What does the “future” of retail look like?
Clearly, on-line sales is where the growth is coming. Much like Walmart killed downtown retailers in the past, the future is changing. Many Big Boxes will ultimately follow malls into oblivion.
Speaking at a PEAK-young professionals meeting, I asked how many of them shopped at (a large retail department store that recently relocated to the Pinnacle)? Only one poor young lady raised her hand. Millennials, by in large, do not shop at Big Box stores. Consequently, I would forecast that the Pinnacle will begin to look like a bad set of teeth when demand wanes and the newly-minted long-term leases are up. That is the future.
So how does a community capitalize on a trend when the direction is seeing local bricks and mortar stores disappear up into the cloud. Well, that is only a superficial reading of the tea leaves. Two alternative trends are also emerging which create opportunities for us.
First, specialty, full-service shops are becoming more popular. In fact, such truly “unique” local stores have always been able to buck the trend. Blakely-Mitchell men’s store is an example of how true personal service will always attract a certain segment of the market.
In a situation where even huge cloud-based conglomerates like Amazon can have a virtual “local” presence, we need to redefine what the word means.
We have always thought of this in geographic terms in the past. “Local” now means “personal.” Successful community retail of the future will be very individual. Customers will be known; service will be intimate. Those are the businesses we should support, not the Big Boxes. However, we must also accept that some of those will fail, but the future is not an easy place to get to.
The other trend is the exact reverse of what we think we see. Internet retailers are actually coming down out of the cloud. For example, Warby Parker, the trendy on-line discount optical business has recently begun establishing a “real” presence to differentiate themselves from what is becoming a crowded virtual market.
We likely will not get that particular business to locate here (so please let’s not head off on yet another tangent). However, we can find other operations that might fit our city’s unique characteristics (although we first need a serious honest scrub of what we think we are). Those are the businesses we should target (not the “Target” we currently court).
If we can actually stop comparing ourselves to others, we may be able to get ahead of the wave that surely will come. Envy is a terrible motivator. Perhaps we should pay more attention to the Commandments we so fervently desire to put up in our public buildings. “Thou shall not covet.”
None of this will be easy. We are likely to lag in tax revenue if we follow this path. This is all the more reason to be very cautious of entering into the newly approved “tax and spend” program before we really understand where we want to go.
Honestly, this approach is not inconsistent with Kingsport’s vision, the shorthand version of which might be stated,” to become a great place to live, work and play.” We are already a “great” place. We simply need to focus our attention on how to achieve future success. It requires a new way of thinking, something very difficult for our community. However, it is essential if we are to reverse the current trend and grow into the future.