Market Analysis Study Identifies Opportunities and Strategies
MADISON, Wis. (September 27, 2007)—As The Chicago Tribune put it earlier this year, “few Midwest thoroughfares are as vibrant” as Madison’s central downtown, including greater State Street and the Capitol Square.
Results of a Downtown Madison Market Analysis study announced today confirm this view and identify strategies to sustain and grow business vitality. With the recent influx of downtown residents, office workers and visitors, plus the bustling University of Wisconsin campus, downtown Madison retailers and businesses have new opportunities to expand or pursue innovative business concepts.
The year-long study was conducted as an educational effort by the University of Wisconsin Extension Center for Community and Economic Development (which has done similar studies for downtowns including Milwaukee and La Crosse) with assistance from UW-Extension Dane County and input from an advisory group of downtown business and property owners. Co-funded by Madison’s Central Business Improvement District (BID) and the City of Madison, the study is part of Downtown Madison Inc.’s “Downtown Dynamic” business retention, expansion and recruitment initiative.
Downtown Market Analysis Study/ADD 1
The study focused on areas such as characteristics of downtown customers, needs and perspectives of business owners, opportunities to enhance the downtown retail environment, and business “clustering” strategies within the central commercial district, bounded by Park Street, Lake Mendota, Blair Street, Lake Monona, and Regent and Proudfit Streets.
“The resurgence in downtown housing, recent projects such as The Overture Center and Monona Terrace, construction on the UW-Madison campus, and private development projects have increased the vitality of downtown Madison,” says Matt Kures, one of the study’s authors. “This renewed public and private investment has positioned downtown Madison to maintain and expand its prominence in the regional and national economy.”
The key now, according to the study, is to strengthen and expand the unique retail offerings downtown, continue to grow the office market by capitalizing on downtown’s amenities for workers in professional, technical, cultural and entertainment industries, and to share the story of downtown’s successes and potential.
A Growing Market
Recent trends have expanded the potential market for downtown consumer businesses, according to the study.
- Residents: Downtown Madison is home to more than 24,000 residents, with 3100 new housing units added since 1995 (1800 rental, 1,340 condominium). Between 2000 and 2007, the number of downtown households has grown at a faster rate than both Dane County and the nation.
- Workers: Downtown Madison businesses employ 33,000 workers, including concentrations of financial, scientific, arts and other knowledge-driven industries (such as architecture and engineering) locating downtown, as well as national companies opening offices downtown to serve the increasingly important Madison market.
Downtown Market Analysis Study/ADD 2
- Students: More than 50,000 college students live in Dane County, the majority in or near downtown. With discretionary income to spend on eating out, electronics, entertainment, and designer apparel, students account for $500 million annually in expenditures on local goods and services, with $175.2 million spent in retail and personal service categories.
- Visitors: With expenditures of over $1.2 billion, Dane County accounts for the second largest visitor spending in Wisconsin. With more than 1,200 hotel rooms, diverse cultural facilities, conference space, and proximity to UW-Madison, downtown is well-positioned to capture this market.
Retail Niches
Downtown Madison is ripe for enhancement of retail niches such as “urban living,” including home furnishings and decorating (currently exemplified by Rubin’s Furniture and Tellus Mater), as well as basic goods and services for residents. Other retail niche opportunities include apparel stores targeting students and professionals (e.g., Bop, Citrine, Gap, Jazzman, Urban Outfitters), and specialty arts and gifts (e.g., Pop Deluxe, The Fanny Garver Gallery). Downtown offerings are strong in the restaurant, coffeehouse and entertainment segments, and one notable gap in basic goods and services—groceries—is being addressed with the development of a second Willy Street Co-op location in Phase II of Metropolitan Place.
Clustering and Cross-Marketing
Other recommended steps for success include business clustering and placement strategies to help draw consumers to a critical mass of complementary businesses (e.g., apparel, shoes, accessories), and create cross-marketing efforts among complementary businesses.
Comparable Communities
The study also takes a look at “comparable communities,” such as Boulder, Colorado and Austin, Texas, which share attributes such as size, centers of government, demographics, and proximity to college campuses. Madison shares many of the same opportunities, such as potential retail niches, and can learn from these communities’ challenges and successes in creating vibrant downtowns.
Downtown Market Analysis Study/ADD 3
Business Support
Business support organizations such as DMI, Madison’s Central BID, and the city’s Office of Business Resources will take a proactive role in supporting business retention, expansion and recruitment by continuing successful programs such as the Downtown Map & Guide, as well as expanding their clearinghouses of information, creating business recruitment and marketing materials from the study data to help downtown property and business owners, and connecting entrepreneurs to business assistance providers, training and education opportunities.
“The Market Analysis provided a chance to learn even more about the perspectives of business operators in Downtown Madison,” said Matthew B. Mikolajewski, the City’s Office of Business Resources Manager. “It will serve as a useful base of knowledge for future downtown initiatives.”
The Big Picture
In the big picture, downtown Madison is poised to build its position in the regional economy, by promoting downtown as the geographic center of a knowledge economy with professional and technical businesses. Downtown Madison offers a concentration of worker amenities such as dining, entertainment, and personal services unavailable in other parts of the region.
With its availability of business services and support organizations, plus office and meeting spaces, downtown Madison is a de facto business incubator, with new concepts such as Fromagination (an artisan cheese shop) opening on a regular basis. Downtown also serves as a “place for networking” with its dense environment of social spaces such as restaurants, bars, coffee shops and “wired” public areas.
Next Steps
In cooperation with Madison’s Central BID and the City’s Office of Business Resources, Downtown Madison, Inc. (DMI), is already working on how the study findings will inform the next steps for the Downtown Dynamic business retention, expansion and recruitment efforts.
Downtown Market Analysis Study/ADD 4
“We look forward to sharing study results with downtown business and property owners in more detail,” said Susan Schmitz, President of Downtown Madison, Inc. “DMI will work in partnership with the BID and the Office of Business Resources on an action plan to support the vitality, growth and recruitment of downtown businesses.”
“This study confirms that there is great opportunity in downtown Madison,” said Mary Carbine, Executive Director of Madison’s Central Business Improvement District (BID). “We’re glad to know that we are on the right track with programs like the Downtown Map & Guide, our Ambassadors, and cooperative advertising efforts. With this new data, the BID can take its work to the next level, such as enhanced marketing of the district as a whole or creating materials to help property owners recruit business tenants.”
For more information on the Downtown Madison Market Analysis please see the following links:
Downtown Madison Market Analysis Executive Summary
Downtown Dynamic “Unified Dream Statement”
