July 24, 2008
Retailers Look to Develop on College Campuses
By George Anderson
According to a Retail Traffic report, universities are increasingly looking at building mixed-used projects on campuses that provide housing and a host of retail outlets for students, faculty and administration personnel.
A current example is a plan for a 38-acre site on the East Campus of the University of Maryland in College Park that will include administrative offices, graduate student housing, professional offices and retail space. Foulger-Pratt and Argo Investment are behind the project’s development.
In College Park and elsewhere, merchants including bookstores, clothing stores, fast casual restaurants, grocery outlets (Whole Foods is one) and others are opening new locations for business.
Not all campuses, according to Jeff Green, president of Jeff Green Partners, are meant for large-scale commercial development. The best candidates, he told Retail Traffic, are prestigious private universities that have large numbers of students from affluent families.
Commercial development on campuses has become increasingly popular with schools looking to develop new revenue streams.
Development Design Group is working on a 114,620-square-foot mixed-use redevelopment at Franklin & Marshall College in Lancaster, Pa. Roy Higgs, CEO and managing partner with the Baltimore-based planning, architecture and design firm, said the project makes sense with “a high visitor component because of the students’ families, plus you’ve got the increasingly higher spending power of the student body itself.”
Discussion Questions: What do you see as the college campus opportunity for retail stores? Will retailers be increasingly drawn to college campuses and other mixed-used retail projects because of factors such as high gas prices? Is there a significant competitive advantage associated with being located on a mixed-used project’s grounds than, say, just down the road from it?
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I think developing mixed use buildings on campuses, specifically retail, is something that should have happened a long time ago. Anyone who’s been to a large campus will tell you it’s like a mini city. And what’s a city without a shopping district? If retailers work hard to ensure their stores are located in the right kinds of schools (based on demographics), I think they should experience a great deal of success.
The only real question is, how can a person study under the pressure of finding the right pair of jeans on sale?
For generations, major universities’ “college bookstores” have been department stores, with most profits coming from apparel (just like off-campus department stores). And I’ve seen colleges and trade schools located in shopping centers. So why not have shopping centers on campus? Just be prepared for high shrink and a very high proportion of price-conscious cherry-pickers.
Right retail or, Right location – Right decision? This is not an “if we build it, they will come scenario.” This is a “they are there and if we can fulfill the need, they will buy the product.”
If developers work carefully to match the square footage of stores to the actual potential based on the sizes of the campuses, it could work well. The only caveat is that many of the prestigious private schools with affluent students are small. Retailers need to really understand the local market before they jump in, since affluent students tend to have cars and still enjoy getting off campus for that shopping trip to the nearest city or mall.
I recently visited my old college campus. The number of dormitories has dropped from 11 to eight over the past 30 years. Of those eight remaining, many have been remodeled so that three rooms were converted to two larger rooms. That tells me that on campus population is dropping and colleges are trying to find ways to keep students living on campus. Adding retail is a great convenience but will the students be able to afford the higher prices? Head shops, bars, pizza, seem to be the mainstays. All other retailers on campus seem to have short life spans.
Another factor that retailers will need to consider, particularly for the smaller campuses, is the summer months when the vast majority of the population leaves. Larger campuses tend to keep a steady stream of traffic during the summer months. However, from my experience, smaller schools tend to be ghost towns which would factor into budget and sales forecasts for those months.
My child is a student at a mid-to-large sized state university that is totally under served by retail both on campus and surrounding it. The major retailers that surround the university have aged stores that have not been maintained up to standards found in other metropolitan areas where they are located. Is this the result of the economic conditions of the town itself? Or, is it the result of the spending capability of the student body?
Any semblance of retail on campus is state or university run. That should tell you quite a bit about the offerings and the price competitiveness of what is available. The campus itself while large in student count and facility is actually quite compact in overall footprint. This allows for walking or biking from one side of the campus to the other in literally minutes.
The question is, what’s the right retail mix for a campus like this or others similar to it? One thing is for sure – there are few options outside of the college ‘meal plan’ that offer nutritious foods in an affordable and convenient way. There are also few, if any, smaller specialty shops to meet other needs. Yet, if you want a university logo sweatshirt or t-shirt, there are literally dozens of options. A small market with college student favorites at reasonable prices? It doesn’t exist. Other retailers, attempting to gouge the captive audience? Plenty.
Being exposed to this type of market for a few years now, it seems that it would be wide open for the taking. The major retailers appear to be ignoring the need. It’s a market open to opportunity. However, just as mentioned in the article, it seems that the only worthwhile place to be successful is at larger schools with affluent students? I think that is a pretty narrow view. I would see this much like inner city markets that are widely under served.
The potential here is significant, specifically in Florida. Colleges in Florida are growing rapidly and retail and services are struggling to catch up. In addition, universities tend to be recession proof with enrollment increasing during tough economic times. The biggest challenge with these developments is working with the universities themselves.
Commercial business for campuses is a good idea for schools, but only if the environment is right. I’ve been schooled in campuses that have varied greatly. One was downtown, the other in the suburbs.
The suburban one had a designated retail mini-mall rented out to businesses and it makes sense. There is nothing around the campus for students to shop. You have to take a car and drive 20+ minutes to the nearest mall.
The campus mall had most things…food court, drug store, book store, coffee shop, eateries, photo store, travel agency, small grocery store, CD/music shop etc…. Some of them were brand name franchises, some no name. It’s been there forever. The key omission was clothing stores, aside from a few stores that specialized in school tees, jackets and souvenir type things. The mini-mall was always jam packed, even though the prices were often a rip-off. You would think a school would have cheap prices for students, but it wasn’t. Students not willing to drive or without a car were trapped, I guess.
The problem I see for any business is the summer months when the population was limited to summer students. Not sure what business would do then. I was on campus through the summer and the number of students was probably 1/4th what it normally is.
Fuel prices are not the driving factor; it’s understanding where your current market is. Creating a new model is critical not the current model that we see in the lifestyle center. The retailers that understand Gen Y, how to market, what they want and how they want it will ultimately create a fresh new model.
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I think developing mixed use buildings on campuses, specifically retail, is something that should have happened a long time ago. Anyone who’s been to a large campus will tell you it’s like a mini city. And what’s a city without a shopping district? If retailers work hard to ensure their stores are located in the right kinds of schools (based on demographics), I think they should experience a great deal of success.
The only real question is, how can a person study under the pressure of finding the right pair of jeans on sale?
For generations, major universities’ “college bookstores” have been department stores, with most profits coming from apparel (just like off-campus department stores). And I’ve seen colleges and trade schools located in shopping centers. So why not have shopping centers on campus? Just be prepared for high shrink and a very high proportion of price-conscious cherry-pickers.
Right retail or, Right location – Right decision? This is not an “if we build it, they will come scenario.” This is a “they are there and if we can fulfill the need, they will buy the product.”
If developers work carefully to match the square footage of stores to the actual potential based on the sizes of the campuses, it could work well. The only caveat is that many of the prestigious private schools with affluent students are small. Retailers need to really understand the local market before they jump in, since affluent students tend to have cars and still enjoy getting off campus for that shopping trip to the nearest city or mall.
I recently visited my old college campus. The number of dormitories has dropped from 11 to eight over the past 30 years. Of those eight remaining, many have been remodeled so that three rooms were converted to two larger rooms. That tells me that on campus population is dropping and colleges are trying to find ways to keep students living on campus. Adding retail is a great convenience but will the students be able to afford the higher prices? Head shops, bars, pizza, seem to be the mainstays. All other retailers on campus seem to have short life spans.
Another factor that retailers will need to consider, particularly for the smaller campuses, is the summer months when the vast majority of the population leaves. Larger campuses tend to keep a steady stream of traffic during the summer months. However, from my experience, smaller schools tend to be ghost towns which would factor into budget and sales forecasts for those months.
My child is a student at a mid-to-large sized state university that is totally under served by retail both on campus and surrounding it. The major retailers that surround the university have aged stores that have not been maintained up to standards found in other metropolitan areas where they are located. Is this the result of the economic conditions of the town itself? Or, is it the result of the spending capability of the student body?
Any semblance of retail on campus is state or university run. That should tell you quite a bit about the offerings and the price competitiveness of what is available. The campus itself while large in student count and facility is actually quite compact in overall footprint. This allows for walking or biking from one side of the campus to the other in literally minutes.
The question is, what’s the right retail mix for a campus like this or others similar to it? One thing is for sure – there are few options outside of the college ‘meal plan’ that offer nutritious foods in an affordable and convenient way. There are also few, if any, smaller specialty shops to meet other needs. Yet, if you want a university logo sweatshirt or t-shirt, there are literally dozens of options. A small market with college student favorites at reasonable prices? It doesn’t exist. Other retailers, attempting to gouge the captive audience? Plenty.
Being exposed to this type of market for a few years now, it seems that it would be wide open for the taking. The major retailers appear to be ignoring the need. It’s a market open to opportunity. However, just as mentioned in the article, it seems that the only worthwhile place to be successful is at larger schools with affluent students? I think that is a pretty narrow view. I would see this much like inner city markets that are widely under served.
The potential here is significant, specifically in Florida. Colleges in Florida are growing rapidly and retail and services are struggling to catch up. In addition, universities tend to be recession proof with enrollment increasing during tough economic times. The biggest challenge with these developments is working with the universities themselves.
Commercial business for campuses is a good idea for schools, but only if the environment is right. I’ve been schooled in campuses that have varied greatly. One was downtown, the other in the suburbs.
The suburban one had a designated retail mini-mall rented out to businesses and it makes sense. There is nothing around the campus for students to shop. You have to take a car and drive 20+ minutes to the nearest mall.
The campus mall had most things…food court, drug store, book store, coffee shop, eateries, photo store, travel agency, small grocery store, CD/music shop etc…. Some of them were brand name franchises, some no name. It’s been there forever. The key omission was clothing stores, aside from a few stores that specialized in school tees, jackets and souvenir type things. The mini-mall was always jam packed, even though the prices were often a rip-off. You would think a school would have cheap prices for students, but it wasn’t. Students not willing to drive or without a car were trapped, I guess.
The problem I see for any business is the summer months when the population was limited to summer students. Not sure what business would do then. I was on campus through the summer and the number of students was probably 1/4th what it normally is.
Fuel prices are not the driving factor; it’s understanding where your current market is. Creating a new model is critical not the current model that we see in the lifestyle center. The retailers that understand Gen Y, how to market, what they want and how they want it will ultimately create a fresh new model.