While the dust continues to settle on the social outcomes of the outbreak of COVID-19, one effect has definitively emerged: COVID changed where Americans are living. Temporarily and permanently, we moved to smaller cities - which are now growing at faster rates than many of our major markets. In some markets, people are moving to the suburbs. In others, we are seeing a revitalization of the urban core. For brands, these trends are worth a close look, and could shape your brick-and-mortar expansion strategy well into the mid-21st century. Here’s what the data is telling us, and here’s why you (and your real estate team) should pay attention.
- Migration is an indicator of a market’s overall economic health.
People tend to move where they can secure economic stability for themselves and their families. That means relatively affordable housing, decent cost of living, and ample opportunities for jobs. If these things are in good supply, chances are that the market can support your brand’s success.
- Opening stores in smaller, growing markets could help you capture new customers.
Your target NYC customer could very well be moving to Phoenix—where they may have friends that will also like your brand. What’s more, customer segmentation data could reveal that a whole new profile of customer lives in these smaller, fast growing markets. Understanding how your customer varies market-to-market could add nuance to your growth strategy, and make your brand smarter and more tactical with how marketing dollars are spent.
- Retail developers are also noticing migration patterns - and are ready to work with brands.
Developers have noticed these trends - and are making moves. Phoenix, Houston, Austin, and Dallas are in the top ten cities for both retail construction underway and population growth. This means there’s an opportunity to get favorable rent economics in new developments, or to work with developers to reinvest in existing assets.
NYC and LA will always be densely populated, buzzy markets - but don’t overlook the potential of smaller MSAs with an influx of newcomers. Healthy economies, young, upwardly mobile populations, and retail developers eager for interesting tenants could make them ideal markets for you to expand. Want to learn more or just talk shop about migration patterns? Reach out anytime.