The Viability of Vertical Retail in Urban Environments

Written by  //  May 16, 2016  //  Posts, Retail Around the World, Retail Design, Retail Feasibility  //  No comments

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In the context of vertical shopping environments, a rule of thumb that is sometimes applied is that sales performance drops off by 50% for every floor above ground level. By the time you get to the third storey, you can expect only a fraction of the sales turnover. As a result the space is often not viable. When working in dense urban environments we have found that through strategic merchandising sales decay can be less – in the 25% to 33% range per floor – but nonetheless is still significant.

There are ways to help counter this vertical sales decay. This is done primarily through the use of retail and entertainment uses that provide an anchoring draw (e.g. food courts, theatres, promotional spaces). But without a doubt the best approach, where possible through design, is to ensure that a retail centre has more than one level acting as the primary entrance point. Toronto Eaton Centre is the prototypical North American example. Mall visitors are entering the building at several levels due to a sloped grade at street level and through connections to two subway stations. This vertical accessibility provides access in convenient and unobtrusive ways.

Probably one of the best urban environments in which to observe how retail follows foot traffic rather than ground level is on Hong Kong Island. The network of above-grade pedestrian bridges and escalator systems carries incredible volumes of pedestrians as they commute up to the Mid Levels. As the system expanded, retail began to take advantage of this change in foot traffic pattern by connecting directly into the pedestrian bridge. Other multi-level stores take advantage of the visibility through large transparent windows that act as excellent advertising. Further up the hills, trendy restaurants and bars opened up adjacent to the escalator system as it became easier to reach these previously inaccessible streets. Through these physical design changes, space that was previously nonviable for retail uses has now became both profitable and desirable for many tenants.

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