Talking Shop: Destination retail offers competitive edge

There’s the shopping people do to keep socks on their feet and food in their fridge, but then there’s a whole different sort: the shopping they do for pleasure.

That’s destination retail. British retail strategy and marketing firm Design4Retail defines the concept as an enhanced retail experience that customers go to, rather than simply stopping by. Some savvy retailers work to hone their attraction by offering more than merchandise, giving customers additional reasons to visit and hang out, these retail experts say.

The concept isn’t new, evolving from the pickle barrel at the general store to Swedish meatballs at Ikea. Creating an experience for shoppers simultaneously creates a reason for them to return, not to mention social buzz.

If it all sounds a little extra, it isn’t, according to respondents in Springfield Business Journal’s 2023 Economic Growth Survey. Destination retail was one of the top answers when respondents selected the biggest three factors needed to keep Springfield competitive in the next five years, topped only by affordable family housing and tied for second with affordable multifamily housing.

Mark Hecquet, president and CEO of the Springfield Convention & Visitors Bureau Inc., agrees with survey respondents: Destination retail is important.

“It’s very important for a community to have good shopping,” he says, noting its draw for visitors. “Obviously, when we travel, we like to shop. We do enjoy places that we sometimes cannot find within our own communities.”

Statistics compiled by the CVB back up Hecquet’s assertion. In a 2023 survey that recorded activity participation by visitors to Springfield, 36% said they shopped while they were in the Queen City, making it the second most popular activity. The top activity, however, at 37%, was also centered on shopping: a visit to the Bass Pro Shops headquarters, which is a destination retail outlet if ever there was one. A visit to downtown was cited by 30%, and Battlefield Mall drew 23%.

Lots of options
Amanda Ohlensehlen, director of Economic Vitality for the city, notes retail opportunities bring a lot of awareness to Springfield.

“Destination retail to me can be everything from a small entrepreneur that may have a really unique shop or restaurant, all the way to major national retailers or big box stores that may offer goods and services that aren’t likely to be found in surrounding areas,” she says.

Springfield is an activity hub for its more rural surroundings, she notes.

“We do draw visitors from a large radius – maybe larger than most metropolitan areas, considering our geographical location and position,” she says.

Put simply, people come to Springfield to shop.

“Based on being a metropolitan area within a more rural landscape, with many big box stores, Springfield is a destination for many folks,” she says.

A 160,000-square-foot Costco membership warehouse club opened in Springfield in August 2021 – the chain’s only location in the Ozarks. On that morning, hundreds of customers waited outside for the doors to open. In his remarks at the ribbon-cutting, Mayor Ken McClure thanked the company for coming to town.

“We have so many people that have said, ‘I drive 150 miles to go to Costco,’” he said at the time.

Ohlensehlen notes other restaurants and service providers have popped up around Costco in east Springfield.

“The store has performed well,” she says.

When a 53,000-square-foot Buc-ee’s travel plaza – the first in the state – opens in northeast Springfield later this year, Ohlensehlen anticipates even more destination shoppers.

“Travelers will come and even detour to stop at Buc-ee’s when they are on a road trip,” she says. “Based on data and information shared, many of those visitors to Buc-ee’s and those that will shop in that store will come from more than 50-100 miles away.”

At a January 2022 Springfield City Council meeting to consider an infrastructure reimbursement agreement for Buc-ee’s, Sarah Kerner, the city’s Economic Development director at the time, noted 88% of Buc-ee’s customers come from at least 20 miles away, and the average visitor group spends $100 per visit, generating annual taxable sales – not counting gas – of $30 million.

Shopping matters
Hecquet says shopping is a big segment of travel.

“It’s important for a community to have good shopping, so we’re interested in any opportunity to attract unique opportunities for that,” he says. “It’s a very important mix into our tourism ecosystem.”

Despite the data offered in the CVB survey about what visitors did when they were here, Hecquet says it’s hard to track what compels visitors to come to a community.

He points to Bass Pro Shops as a prime example of a shopping destination that draws people just to experience it. With 17 acres under roof, according to its website, it also offers dioramas featuring wildlife taxidermies, live fish and even an alligator, gun and archery ranges and a buffet restaurant.

And beside it all is the Wonders of Wildlife National Museum & Aquarium, in a building large enough to hold 1.5 miles of trails. “You can’t get that experience anywhere else,” Hecquet says. “As they term it, it’s the granddaddy of them all. It’s huge, and it attracts millions of people every year into our community.”

Ohlensehlen says Springfield offers a wide range of destination retail. There is Commercial Street, with a variety of unique shops and restaurants in a compact, walkable area, and the downtown district is also very popular. She added that the Pickwick Avenue and Cherry Street area of the Rountree neighborhood also attract retail customers in search of special shopping experiences.

“Those locations continue to be very strong,” she says. “They have a lot of small businesses and entrepreneurs who are present in those districts, and that can be really attractive for visitors. They can eat at a restaurant they can’t find anywhere else, and they can find goods that are unique to Springfield – even handmade items.”

The Battlefield Mall is also popular with visitors, she notes – as is the Brentwood Center across Glenstone Avenue.

Added to that are a number of individual stores that have a unique draw – from independent bookstores to galleries and craft retailers.

“Tourism is a significant driver of our regional economy,” Ohlensehlen says.

A need?
But what do survey respondents mean when they refer to destination retail as a high-ranking need for the community?

“Having diverse options is very important,” Ohlensehlen says. “There is a demand here for retail. The sector continues to be strong based on the performance of the sales and use tax within the city.”

She notes that the city is heavily reliant on the sales and use tax to support its operations. Adding to its retail options is just another way to diversify funding to support the services city residents depend upon.

For the month of September, Springfield’s sales tax brought in $5.7 million, just short of the projected revenue of $5.9 million, but up from $5.6 million year over year, according to the city’s Department of Finance.

According to the financial reports page of that department’s website, the city relies on sales tax proceeds as its main source of revenue to fund vital services, like police and fire operations. In the city, approximately 62% of revenue in the general fund comes from sales and use tax. She adds that diverse options help to prevent a phenomenon known as leakage, which is when people leave the city to shop elsewhere – like that Ikea referenced earlier outside of Kansas City or the Trader Joe’s stores in Missouri.

“If we can identify the kind of leakage we are experiencing, that can help us to identify potential target retailers that may be successful here in Springfield,” she says.

Ohlensehlen stresses that Springfield needs to have unique offerings.

“It’s important for us to tell Springfield’s story – to try to proactively identify stores or brands that may be a good fit,” she says.

Ohlensehlen said retail development is happening in the city. As two examples, she cited Brody Corners, a retail-ready community improvement district in the city’s southwest corner, and the activation of a second phase of development for Springfield Plaza on the west edge of the city.