From CNBC, here is a ranking of the Top 10 International Cities for Retail:
- Hong Kong
- Austin, Texas
- Los Angeles
- Melbourne, Australia
- New York
- Milan, Italy
Never in my life did I expect to see Philadelphia listed beside Milan–for any reason, ever. But there you have it.
This list, keep in mind, is not based on retailers’ income or operational costs, nor the value of retail real estate, but the cities’ appeal to shoppers. Patrons have very different priorities than retailers, of course, and in this list, the priorities are quality and unique merchandise, convenience and variety, and overall shopping “experience.” In the case of the cities we’ve listed here, there’s a very fine line, if any, between retail and tourism.
None of these cities are listed because of the size of their local Wal-Marts (NYSE: WMT), regardless of how well such stores perform. These cities are selected for their supply of unique jewelry and art stores, their Urban Outfitters (or Prada) stores, and other more specialized businesses like spas and antique shops. These cities are chosen because their stores’ shopping experience, if not inventory, can’t be replicated by Amazon (NASDAQ: AMZN) or other online vendors. Amazon can’t duplicate the experience of shopping on Fifth Avenue or the Champs-Elysees (they don’t have the technology–yet).
This is something I discussed in my report on CREC’s recent CFO panel. The CFO of PREIT (NYSE: PEI), a REIT focused on shopping malls, pointed out that his firm was working to attract tenants like those I’ve described: high-end, brand-centered, experiential retailers. To a great extent, the future of traditional retail depends, not on the appeal of a store’s products, but the appeal of its shopping.