The detail’s in the retail

As Lord Mayor Martin Haese begins Year 2 of his four–year term, it’s possible that one plan he carried into City Hall may be the equivalent of stopping a runaway train. What’s Adelaide’s brand and does anybody care? Given the capital at stake, it’s a question likely to demand answers sooner rather than later.

It’s not known whether Lord Mayor Martin Haese’s bookshelf contains a copy of Dale Carnegie’s 1936 bestseller How to win friends and in fluence people. But he appears to practise much of the timeless wisdom in that work, especially among the in fluential people who backed him when he was a local government political long-odds outsider planning a bid for the top job.

Carnegie’s wisdom emerges in the way the Lord Mayor has dealt with a number of time bombs that he’s had to defuse, matters left ticking by his predecessor. They include when – and with what money – the other half of Victoria Square will be completed ($70m); council’s city square commercial users’ policy – especially about lucrative lease terms for some operators at that central site; whether pop-up food vans should be allowed to trade near established bricks-and-mortar establishments that pay substantial outgoings for the privilege of place; how the Frome Street bikeway should be altered under pressure from the anti-bike lobby; and why council became responsible for poor UniSA advice about slippery road paving for Hindley Street west, which slowed traffic to a crawl.

But in terms of influencing people, his chief challenge relates to his original decision to run. It will be critical that he maintains Dale Carnegie’s tips as he rubs shoulders with the city’s retailers – especially in Rundle Mall. Most Lord Mayors come to office with long experience in listening to and understanding people – and all of them bring a plan. Michael Harbison wanted to stem the future rising tide of Adelaide’s young people moving interstate, rather like King Canute by the shoreline.

Stephen Yarwood wanted to drag Adelaide into a reduced-traffic ‘green sustainability’ future. Martin Haese’s election platform was focussed on more traditional ‘back-to-basics’ Adelaide elements, but with one important additional feature – simultaneously boosting the city as the centre of ‘the shopping experience’. Retail has been a labour of love – long before he became Lord Mayor, as illustrated by a 2014, 198-page, $120,000 report paid for by council, written by Retail IQ International, the company run by (then) private citizens, Martin Haese and his wife, Genevieve.

Upon receipt, administrators put it away, although a May 2014 memo to councillors mentioned it. It contained a host of clever ideas to boost the city centre’s retail heart. As with his predecessors, achieving that goal is going to be challenging, and expensive. But if he is unsuccessful, much of what the well practised former retailer stands for will, at the 2018 council election, look like little more than excess career baggage in a city that, like so many around the globe, is being buffeted by trends not faced by the city fathers only a few council terms ago. What is Adelaide’s brand and does anybody care? The wags say the wine; the facilitators say the festivals and the jokers say the jobless.

The risk is that a ‘brand search’ sounds like a retail marketeer’s philosophical navel gazing. But behind all that it’s actually a call to arms in a war that the city began losing some time ago. In the late 70s, Rundle Mall retail enjoyed 30 percent of Adelaide’s retail spend. Now it’s just five. It’s been leeching into the suburbs for years.

Now, a new challenge is evident. Online buying threatens the viability of every bricks-and- mortar retail outlet, from the basement pots and pans to the fifth floor ladies’ lingerie. Does anybody care? The city’s 15,575 workers in food and retail do, especially the 3206 in the mall.

So do the CBD landlords, a low-key but powerful lobby group that helped put the Lord Mayor where he is. It’s a heck of a challenge and he carries a heck of a handicap, given the council’s heavy dependence on $10.7m (2015 revenues) from its 10 parking stations with their 6,200 spaces, plus street parking fines that in 2015 raked in $14.9m – costs that every survey reveals as more reasons why people aren’t keen to pay if they can shop elsewhere without cost. Moreover, in pursuing his objective, Martin Haese is placing himself between the great tectonic plates of South Australian retail commerce – powerful property tribes, codependent on state government ministers to continue to smooth the planning path to fit their retail visions.

Mayor Haese’s City Tribe is up against cashed up, very focused Suburban Tribe competition – Burnside, Marion, Tea Tree Plaza, and others: food, clothing, bling and kitchenware purveyors in cities of their own, defined by local government boundaries. Mayor Haese’s backers and advisors are wealthy men whose investments in the mall and down the boulevards face a perfect storm that few of them have skills to handle – the exploding digital world, offering an even faster and cheaper way to shop than first driving to a CBD car park. But right now the city centre is losing relevance.

Lord Mayor Haese’s plan is to confront the tidal wave of change and get you back to Spending Central – even if it’s through a digital portal. Not much to ask. No other Lord Mayor in Adelaide’s postwar history has had to prosecute such a broad campaign against such steep odds.

In recent years, online sales have been rocketing more than 20 percent annually, although that steep trend is now flattening, with 2013 figures at 12.6 percent (compared to only 0.6 percent growth in retail bricks and mortar) and 2014 growth of nine percent. Either way, it’s scary, and other trends are kicking in. In the past 12 months 82 percent of surveyed respondents said they travelled interstate to shop – almost certainly after online surfing. Very locally, only about half the families living in North Adelaide – a five-minute bus ride away – now bother to shop in the city.

Other comparative data? Adelaide’s major suburban shops hubs cover 390,000 sq metres (with more plans for growth) while the city’s retailers lease only 310,000. Remarkably, the city’s five-year game plan is publicly available. Here’s the go… Make shopping in the city “a remarkable experience”; Deliver “a compelling offer”; Make the city “a destination of choice”; and “Create a prosperous retail sector”. And one more – informal but vital – element: Throw Money; Collect More; then pin down future Town Hall budgeting. For example: 2012 (in Stephen Yarwood’s term): tear up and fully upgrade the mall: $30 million.

Annual collection among traders (2015) for Rundle Mall Management Authority, complete with detailed five-year strategic plan: $3.742 million. Then allocate another $366,000 in the 2015-16 budget (already very stretched) to adopt the Lord Mayor’s 2014 blueprint – the one administrators sat on for a year. Is the retail opposition spending like that? Oh yes. Marion and Tea Tree Plaza have millions allocated for expansion and their private owners throw megabucks at strategy.

Being private, they’re not revealing their business plans. So the armies stand ready. But here’s where things get tricky for the CBD. Because the good Lord Mayor’s ‘destination of choice’ blueprint is also anticipating two fresh, new players in the game, with significant potential to divert attention from ‘ground central’ – the mall’s streetscape and store skyline. Big local developer, the Makris Group, proposes a topend $118 million retail and office hub just a few kilometres north, on O’Connell Street, North Adelaide.

It promises big potential to divert the fashion and food dollar well before it gets o ff a bus near Rundle Mall. Then there’s the Riverbank, a government-led expansion plan for food and hospitality, made possible (like the Makris plan) by the state government’s creation of exceptional, new commercial growth zones in a revision of the city’s development plan. The top-down government changes pay little heed to a hungry retail city centre’s vital need to stay ‘exclusive’.

As both proposed developments progress, they’re likely to tear at the fabric of council’s Rundle Mall vision, sapping strategists’ energy and focus so crucial to achieving a brand turnaround against long odds. Historians often enjoy the ‘what if’ game. Should they ever apply it to the 2014 rise of Lord Mayor Haese, they might ponder a different outcome had he won just one term earlier, in 2010. Because it was during the subsequent four years to 2014 that the state government put in place all of the changes that have allowed the Makris Group’s proposal and the Riverbank expansion to be given oxygen.

These run directly against the focus on ‘city central’ becoming ‘a remarkable experience’. Dale Carnegie’s 1936 homely advice covered many eventualities, but one aspect was probably too obvious to mention: timing. Because while it’s one thing to be taking on the burden of the landlords’ challenges and the aspirations of city retailers, it’s quite another to be taking on a higher level of government and ‘at-odds’ planning policy created through the influence of different friends in different places.

It will probably be only when the 2018 deadline for city election nominations arrives that the Lord Mayor will know whether his commitment to the city-central challenge was worth the effort.

By the way, Dale Carnegie’s advice was: “Three fourths of the people you meet tomorrow are hungering and thirsty for sympathy. Give it to them and they will love you.” (How to win friends and influence people, page 147, 1966 edition.)

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