By Dave Ongie, News Editor
Johnson City Commissioners met with representatives from Retail Strategies during a workshop last Thursday afternoon to receive an update on efforts to shore up the retail sector of Johnson City’s economy.
Retail Strategies, an Alabama-based company, has been working on behalf of the city since 2016 to help recruit retailers to the market. Commissioners are currently considering a new three-year contract that would compensate Retail Strategies $35,000 per year to continue its work.
The retail industry is currently at a crossroads. The rise in online shopping has changed the landscape of the business and created serious challenges for brick-and-mortar retailers.
That seismic shift in the retail sector has certainly been felt in Johnson City, which long ago established itself as a retail hub capable of attracting shoppers from as far as Kentucky, Virginia and North Carolina. With no state income tax in Tennessee, sales tax and property tax revenues have long been the lifeblood of the city’s economy.
Needless to say, the struggles being experienced by retailers is a cause for concern among Johnson City’s leaders. With the former home of Toys R Us already sitting vacant on North Roan Street, it was announced last week that Sears, which has long served as an anchor in the Mall of Johnson City, will close its doors early next year.
But John Ruzik, portfolio director with Retail Strategies, is not buying into the doom and gloom surrounding the retail industry.
“I think it’s a myth that the retail apocalypse is here,” he told Commissioners last Thursday. “Retail is not going to die. I could give you lots and lots more data on why brick-and-mortar stores and brick-and-mortar retail is not dying. People still want to feel and touch and smell and taste their product before they buy it.”
Ruzik summed up the current situation retail finds itself in as “Bricks vs. Clicks” – the traditional brick-and-mortar model vs. online shopping. But he said brick-and-mortar retailers are starting to find their footing by integrating technology into the traditional shopping experience, a process he referred to as “omnichanneling.”
“What has changed is that Millennials have overtaken Baby Boomers as the largest consumer class,” Ruzik said. “Retailers have to keep up with the needs and wants of the Millennial. You have to incorporate some level of electronic component to the purchase process, but brick and mortar is still part of that process. Those concepts that are able to do a hybrid of brick-and-mortar and online purchasing are the ones we’re really seeing being successful.”
With the potential for a flurry of development looming in the Boone’s Creek area following the passage of the Regional Retail Tourism Development Act this past May, Retail Strategies has spent the last few months working to shore up vacancies in the city’s existing retail developments. Ruzik had some good news for commissioners on that front, reporting interest from several retailers and restaurants in opening new locations in Johnson City.
After playing a role in the development of the abandoned K-Mart location on Peoples Street, Ruzik said progress was being made in efforts to find a new tenant in the old Toys R Us building on North Roan.
“That’s something we’ve had a lot of success with here in Johnson City with the K-Mart, and we hope to do the same thing with the Toys R Us,” he said. “We’ve put the owner of the Toys R Us box in touch with the local developer, who did make an offer. They’re pretty close in number. They haven’t signed anything, but we’re hopeful that will work.”
Ruzik said work is continuing to fill the Johnson City Center, which is already off and running with Hobby Lobby and At Home open for business. Guitar Center is on the way, and Ruzik also mentioned the potential addition of a sit-down restaurant.
Ruzik said a workout facility and an electronics store are being considered as possible options for filling vacancies just up Peoples Street in Johnson City Crossing. He added that work is being done to fill Hamilton Place with unique retailers who will be able to thrive on the side of the development facing away from State of Franklin Road.
While backfilling vacancies in old downtown districts is not the company’s specialty, Johnson City development services director Preston Mitchell lauded efforts made by Retail Strategies to help bring retailers to Johnson City’s downtown.
“Over this summer, they have gone beyond and said we’re going to fight for this downtown market,” Mitchell said.
To that end, Jordan Williams, retail development recruiter for Retail Solutions, said the ability of Johnson City’s downtown to sustain a Trek store is sending a positive message to other retailers who may be considering opening a location in the district.
“That’s a very strong indicator for a market,” he said. “There’s not a lot of places you could sell a $1,000 to $5,000 mountain bike and people will come purchase it.”