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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

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Building the Customer Base for our Local Businesses

Uploaded: Nov 19, 2023
Our local businesses have seen a decline in their customer base for two major reasons and several other causes. The two major reasons—1) a surge in work from home during the pandemic and continuing and 2) a steady increase in online shopping. While workers may spend more days in the office in coming months, these losses in customers are not going away.

So, what can be done both large and small to increase customers locally.

There are three main sources for our customer base—1) residents, 2) workers in PA and 3) visitors.

One option recommended by our ED consultant and mentioned by council this month is to increase housing near DTN and Cal Ave.

Another option mentioned both by the ED consultant and a survey of Cal Ave merchants is to eliminate some of the constraints in filling our vacant spaces and encouraging new businesses. This could include several initiatives—1) allowing more service uses in vacant spaces, 2) rethinking our policies with regard to chain stores, store size limits and the retail preservation ordinance.

For my wife and myself what we need in our DTN neighborhood shopping area are everyday shopping venues and services. While I have no objection, we do not “need” shopping options that are more easily available at T&C and Stanford—both easily accessible to DTN residents. And spending on services on a growth sector and also not something done much if at all online.

We know that some shopping is done in neighboring cities because PA currently prevents those uses. Personally, the Whole Foods we use DTN is constantly reporting that they discontinue uses because the store is too small to make them viable (so we go the Los Alto store) and also difficulties being fully staffed.

If vacant spaces can be filled, this both provides more options for spending locally AND by itself brings more customers for nearby locations.

While this is not in our control, it is important to understand that Stanford activities are probably the most important source of visitor spending in PA and that includes hotels as well as dining and shopping. There are many types of visitors related to Stanford activities including —1) for sports activities, 2) the hospital, 3) to shop at the shopping center, 4) to see the campus, 5) parent activities and 6) related to the research park and 7) visits to non-academic activities on campus.

Better signage and “wayfaring” initiatives (like signs at parking garages as to how many and where there are parking places can help with people unfamiliar with Palo Alto.

Please share your thoughts.

What is it worth to you?


Posted by Victor Bishop, a resident of Another Mountain View Neighborhood,
on Nov 19, 2023 at 3:37 pm

Victor Bishop is a registered user.

Palo Alto decades ago made decisions regarding retail in the city and now they have to live with the consequences. No chain stores - so chain stores built right outside the city limits
Small grocery stores- JJ&F had to be protected at all costs ( to hell with the free market) and again groceries built large stores at the border
A limit on service stores- thee are too many gyms and nail salons, better the space remain empty until a mom and pop can take over
And don't forget the irrational lockdowns that drove many businesses to close and made people turn to online shopping. ( oh and the lockdowns didn't work. Web Link

Posted by scott, a resident of Palo Verde,
on Nov 19, 2023 at 5:05 pm

scott is a registered user.

Midtown Safeway has the same problem as the Downtown Whole Foods. The Safeway on San Antonio right on the other side of the border in Mt. View is just vastly better.

For a long time it struck me as weird that so many people are fixated on retail in this city. But I think I finally put my finger on something. Perhaps they do not have unrealistic expectations, as I long believed; but rather that I live next to Mountain View, and so my needs are served.

Posted by Local news junkie, a resident of Charleston Meadows,
on Nov 20, 2023 at 12:58 pm

Local news junkie is a registered user.

How will adding more residents downtown or near California Ave. help local retail? The new residents (likely to be well-to-do and tech savvy) are just as
as likely to shop online, work from home, and go to other cities (Mountain View) to shop at chain stores as current Palo Alto residents.

Posted by Philomena Duncan, a resident of Crescent Park,
on Nov 20, 2023 at 1:43 pm

Philomena Duncan is a registered user.

Part of the problem pertaining to the decline in Palo Alto retail stores is because shopping in Palo Alto is little more than a mundane experience, no different than shopping online.

And while more people do their shopping online nowadays due to convenience and pricing, many of the defunct PA retail stores were selling the same type of mundane merchandise that Bezos/Amazon now has the corner on.

Where are the specialty stores that once made shopping in Palo Alto unique and esoteric?

If shopping at the Apple Store, Williams of Sonoma, Macy's, Nordstrom, and some of the obscure boutiques at Stanford Shopping Center is the best Palo Alto can offer, why bother unless one is just another unenlightened materialist more preoccupied with designer labels and Veblen brands?

On the other hand, adding more esoteric shopping in Palo Alto might prove pointless because unlike the BabyBoomer generation, most Millennial and Gen Z shoppers have no esoteric tastes other than an ongoing preoccupation with mass-produced electronic devices and the wisdom of social media influencers.

Outside of maintaining a strong customer base for PA dining venues and nail/hair care salons, the other options are quite limited and probably not worth pursuing.

Posted by Judy Wong, a resident of Menlo Park,
on Nov 20, 2023 at 2:21 pm

Judy Wong is a registered user.

While they are not exactly the most exciting places to shop, why have downtown Los Altos and Menlo Park retail stores been more successful in terms of survival than the ones in Palo Alto?

Commercial rents are costly everywhere so it cannot be used as an excuse for Palo Alto retail businesses.

Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Nov 20, 2023 at 6:05 pm

Bystander is a registered user.

Palo Alto has always been against big box stores. Some of my most frequent big box stores became almost useless through lack of choice, size, colors, etc. and that inludes Ikea. Nowadays, Costco, Target and Home Depot are still busy but seem to be lacking in inventory compared to the past.

Online shopping is not only convenient, but choices abound compared to any big box store, let alone smaller mom and pop store. Smaller stores are the place to go to browse and impulse buy, but not really the place to get household items, linens, etc. and even appliances have become easier online than an appliance warehouse.

Basically shopping for various items where instant gratification is not necessary, or trying on e.g. shoes, otherwise why bother. It is a chicken and egg situation. Even various food items are often out of stock in local grocery stores so online is the way to go.

Posted by Neilson Buchanan, a resident of Downtown North,
on Nov 21, 2023 at 10:16 am

Neilson Buchanan is a registered user.

Steve, you are the professional planner and economist. There must be a better thought process to create an agenda for change. Trends will emerge slowly. We would be more informed and happier if a stronger consensus could emerge. For example, here are a just few assumptions seeking greater consensus.

On-line shopping and delivery services can only increase.

Big box retail will prevail. Costco and Home Depot, for example, serve several distinct classes of customers....larger familiies, contractors, and apparently small restaurants. Palo Alto lacking large, undeveloped sites will struggle to compete with RedWood City and Mt. View. eg, Safeway(s) and Costco(s). Draegers and Whole Foods are established, convenient but relatively expensive for many citizens.

The future of large national pharmacy chains will be unclear. Many of their products are vulneable to online shopping and direct shipment. They are exploring various gaps in health services ranging from vaccinations, primary care and urgent care. They may have expertise and capital to create and enter unseen markets. Or they may fade away as a relic of the past.

Exoerts should be able to analyze and track the overall markets being served by "downtown" Los Altos, Mt. View, Palo Alto, Menlo Park and Redwood City. What is regional vs local size of their customer base? What are trends for these successful small, nimble businesses when new housing creates new demography.

Realistically, what are 2 simple, 10-year forward-looking scenarios for new, occupied housing within ten mile radius of Palo Alto. These assumptions are woefully absent. State government wizards create more heat than light.

Finally, two big hurdles. #1 What is potential for ECR? 80% housing or less? 20% retail and services? Small lot sizes constrain Palo Alto.

#2 Will RTO and WFH reach equilbrium? I bet we do and more workers will be in moat offices. Worker productivity and profits will be the timing determinates.

Posted by Bystander, a resident of Another Palo Alto neighborhood,
on Nov 22, 2023 at 3:05 am

Bystander is a registered user.

Timely headline, when discussing Cal Ave anyway. Hundreds new customers in high rises without enough parking spaces will certainly add customer base for Cal Ave businesses.

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