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Marion, Iowa © Tasha Sams
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In January 2022, we released our first-ever annual predictions covering the work of Main Streets and anticipated impacts on small businesses that make up the fabric of our downtowns and neighborhood commercial districts. Making predictions is always a risky proposition but is a valuable pursuit to get a better idea of what to keep an eye out for in the coming year. Perhaps an even more risky proposition is to take a reflective look back to see what was on target, what was a mixed bag, and what we got wrong. So, before we dive into what we expect to see in 2023, let’s take a look at a few of last year’s predictions and see how they played out.
GOT IT RIGHT: Main Street Workforce Constraints Remain, Resulting in Accelerated Technology Integration and Further Business Model Shifts
Unemployment remained low throughout 2022, with recent layoffs primarily impacting the technology sector. Stories abounded throughout the year of small businesses continuing to make shifts or integrating technology. One of these stories landed on the front page of the September 26th edition of the Wall Street Journal that covered a Milledgeville, Georgia, plumbing company from our entrepreneurial ecosystem work with partner Georgia Power and Georgia Main Street.
MIXED BAG: Certain Retail Sectors Will Continue to Grow While Others Level Off
“Looking ahead at opportunities for continued growth in our downtowns and commercial corridors, we should anticipate that retail spending around health and fitness (e.g., sporting goods up 29.9 percent), home improvement, furnishings (e.g., furniture up 28.2 percent) décor and gardening will continue to grow in 2022.”
Looking back at the 2022, Quarter 1 started out strong. However, inflationary pressures, which we did not factor into the stickiness, began to slowly erode. Sales with a number of sectors we predicted to be strong began to go flat, with sporting goods/recreation seeing the biggest impacts with several month-over-month sales declines.
WHAT WE GOT WRONG: Due to the Rise of Remote Work, Office Space Will be Reconfigured and Repurposed
This one comes with a caveat: if this had been a prediction that our colleagues over at the International Downtown Association made for their urban districts, we would have put this in the “what we got right” category. Many larger central business districts have struggled to bring white collar professionals back to their offices.Downtown Washington, D.C., is even looking at offering tax relief to developers converting office to residential.
But for our Main Streets, whether small downtowns or neighborhood commercial districts, the office sector is more centered on the office-service sector in which interaction with clients is more prevalent—think your local real estate or insurance office. As such, while some shifting occurred, it was far more limited and less disruptive than thought when we made the prediction in early 2022.
So, while no forecast is always perfect, taking the time to better understand trends and how they might impact the work of place management and small business is still a valuable planning activity that can help to inform the coming year. As such, I spent some time looking ahead to 2023 and landed on five key areas to consider, investigate, and discuss in the coming year.
For decades, the U.S. ecosystem hubs were concentrated along the coasts (think California’s Silicon Valley and Boston’s Route 128 Technology Corridor). Due to technology business relocations and consolidations in finance, places like Austin, D.C., Chicago, Charlotte, and Atlanta, have witnessed an acceleration of greater talent concentrations over time.
One key to success in these regions has been the concentration of human capital combined with the density of place that creates both intentional and accidental collisions that in turn form new ideas, access to capital, and networks that are the hallmark of successful small business support systems. However, the global pandemic has shifted both. For example, the rise of remote work, which has primarily been in the technology office sector, provided opportunities for human capital to decouple from these areas, diffusing this workforce to often suburban and rural locations. And now, these tech and financial centers are faced with what Professor Scott Galloway has coined the “Patagonia Vest Recession.” More on the long-term prognosis for Big City downtowns can be found in this recent analysis piece from Architecture Magazine.
As I indicated earlier, the office sector was largely unimpacted in most small and mid-sized cities. The heavy migration of remote work talent and recently-retired individuals to these areas provides the ingredients necessary to greatly enhance and stimulate a series of micro ecosystem hubs around Main Streets. They will likely never make the headlines or even be “named,” but nevertheless will have profound impacts on these communities’ overall economic growth and resiliency.
I spent time last year in Jasper, Georgia, where new businesses were popping up all over downtown and an entrepreneurial vibe was evident in meetings with both newcomers and existing residents who saw newfound energy in the community’s economic prospects. According to the Internal Revenue Service’s migration data from 2019 to 2020, there were 1,502 tax filings representing 2,972 new residents in Pickens County (Jasper, Ga.). The 2020 population for the county was 34,032 with newcomers representing a nearly 9 percent increase and an income injection into the economy of over $131 million!
For many years we have focused on place-based assets. As Main Street organizations we should begin to better understand our existing and new human capital assets and leverage place-based and organizational assets that create these accidental collisions—from obvious third places like cafes, breweries, and libraries, but also through our own task forces and other volunteer activities that enable us to capture talent. That is what will begin to drive and grow our own ecosystems. Think human capital asset mapping!
Yes, I know many of you may be thinking “when did that happen?!?” Certainly, in early 2020 the rate of e-commerce sales growth was off the charts—in fact, during an 8-week period in March and April 2020, e-commerce growth exceeded the equivalent of what occurred in the previous decade. But what we have also witnessed during the global pandemic is an unexpected awakening, with consumers realizing what they missed when it was gone: the experience of going into a store, interacting with other humans, seeing family or neighbors, and just being able to use their senses as part of shopping. We had missed this essential form of leisure. In fact, the tide had already begun to turn in 2021. In evaluating the following graphic with data from the U.S. Department of Commerce, bricks-and-mortar sales growth began to surpass e-commerce sales growth during the first quarter of 2021, and throughout the year kept a consistent 6-7 percent growth advantage.
As we look ahead into 2023, a couple of things are already shedding light on this prediction coming to realization. First, the sizable stock price declines and recent announced layoffs from Amazon. While 20,000 sounds like a lot, given their size it’s still fairly small. However, this certainly marks a shift from the hiring frenzy of 2019/2020. And, the fact that much of the anticipated layoffs are occurring in distribution further suggests headwinds for online ordering.
Secondly, several exclusively online brands announced that they would be moving into the bricks-and-mortar space. One could argue this started with Apple. And now we see what was seemingly a purely transactional online experience transform into a closer alignment between the brand and the lifestyle feeling that a company attempts to evoke through an instore purchase. Some brands recently making this switch include Warby Parker, Bonobos, Allbirds, and Amazon (through various iterations including partnerships with Kohl’s and Starbucks).
Hmm, perhaps they realize something we Main Streeters always knew: people like human interaction and the experience of being around others, even if that means just sitting in a coffee house with a $6 latte by themselves.
During the pandemic there were a number of particular retail sectors that experienced sizable growth. For example, retail bike sales grew by 54 percent from April 2019 compared to April 2021. Sales and interest in garden sheds grew by 400 percent. And in April 2021—powered by consumers having extra-large covid relief tax refunds—furniture sales were up 181 percent over the previous months. But that was then, and as we saw in 2022, overall retail sales began to reach some norm-setting more consistent with 2019 than 2021. Inflation headwinds are part of the equation, but the fact is that 2021 was such an incredible spending year that in 2022, many consumers already had a lot of what they could not get in 2020. As such we would anticipate consumers will now direct more of their spending to servicing those past purchases and more leisure experiences. So, what does that look like for Main Streets? Time to work with our retailers to add more service elements!
Much of the news cycle over the past year has reflected on our younger generations through the lens of workforce participation. In fact, Gen Z will make up 30 percent of the workforce by 2030. But for Main Street, 2023 will mark a highly visible shift in asset ownership along our neighborhood and downtown commercial districts. The context for this prediction simply comes from observations throughout visits to 50 plus communities in 2022 in which whether it was focus groups of entrepreneurs or district tours, there was an obvious youth movement.
In early November 2022 I had a chance to visit nine different downtowns within the Maine Downtown Center’s program. In Bath, Maine, I got to experience the Grant Building development, a mixed-use preservation project spearheaded by young developers Mandy Reynolds and Sean Ireland. This project was actually just one of a few properties they had taken on with projects ranging from housing, co-working spaces, and retail.
The Grant Building Project in Downtown Bath, Maine; Jon Stein, owner of Fogtown Brewing Company.
And in Ellsworth, Maine, I met up with Jon Stein, owner of Fogtown Brewing Company and an example of what we had historically thought of our long-standing business owners…those that served on committees and had a deep level of community engagement. I visited Jon on election day. That evening he found out he won election to Town Council.
These are not isolated examples as my travels have demonstrated a highly visible shift is afoot. Despite the often doom and gloom of the passing torch from one generation to the next, our Main Street’s are in terrific hands and the future is bright.
For years, names like Jamie Diamond, Jeff Bezos, and Elon Musk have dominated the news cycle and even entertainment pages. Some might refer to this as corporate idolatry. In 2023, we believe there is a real opportunity to really showcase and highlight the importance of Main Streets and the small business owners as essential players who make of our neighborhoods and downtowns as critical to one’s quality of place and to what truly brings value to the consumer experience. With the rise of the “covidprenuer,” these past two years have witnessed amazing growth in individuals endeavoring to reach their dreams of business ownership. Many of those individuals chose to launch along our Main Streets for the very reason that they wanted to give back to their community and be a part of something bigger than just their business. This motivation is often missing in corporate America and consumers took notice during the pandemic when businesses were shut down. Join us in the coming months as we begin to push this storyline as part of Main Street’s brand and identity.
In closing, I’m a big believer that innovation occurs at the crossroads of people’s different backgrounds and experiences. While these are just some of my thoughts based on visiting with many of you and your communities throughout the year, pleasereach out and share your own observations. We will continue to monitor these trends and predictions for 2023 and look to incorporate our findings and your experiences into evolving and adaptable planning tools for your Main Street program's continued resiliency.
Community Heart & Soul, a Main Street America Allied Member, is this quarter's Main Spotlight advertiser. For more information about what they do to support Main Street organizations, click here.
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© Priscilla Du Preez
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Raton Adventure Centre in Raton, New Mexico © Brenda Ferri
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The Dalles, Oregon © Alicia Gallo
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A storage container storefront in Jasper, Alabama. © Ryan McGill-Blanton Media Group
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Crema Brew Coffee is a locally-owned coffee shop in New Bern, North Carolina. © Swiss Bear
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New Morning storefront in Biddeford, Maine © Heart of Biddeford
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New Orleans, Louisiana © Bobby Boone
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Cincinnati, Ohio © Janet Hurn
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Charlotte, NC © Pixabay
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Laramie, WY © Laramie Main Street Alliance
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© Allapattah CDC
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© Main Street South Carolina
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© Historic Valley Junction
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© Notice Pictures
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Stockbridge, GA © Stockbridge Main Street
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Spencer, IA © Spencer Main Street
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Boston, MA © Kyle Klein
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Franklin, TN © Brandon Jean
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York, PA © Sully Pinos
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Evart, MI © Storyville
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Ottumwa, IA © Main Street Ottumwa
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Wixom, MI © Carissa Serylo
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Oceanside, CA © Road West Photography
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Colville, WA © Colville Together
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Camden, AR © Kimberly Moore Davis
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Silver City, NM © Silver City MainStreet
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Skowhegan, ME © Kristina Cannon
Main Street America is proud to support the Revitalizing Small and Local Businesses Act
Main Street America's research team shares the results of the 2022 Small Business Survey.
© JENNIFER E. WOLF
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Wheeling, WV © Wheeling Heritage
Chief Program Officer Matt Wagner, Ph.D., shares his predictions for the trends affecting small businesses in 2022.
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Charles City, IA © Mark Wicks
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Little Rock, AR © Main Street Arkansas
Matt Wagner explores how Main Streets can navigate workforce concerns in the post-pandemic economy.
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Memphis, TN © Four Way
Heart of Biddeford shares the strategies they developed to support Black-owned businesses in their community.
Biddeford, ME © Heart of Biddeford
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Tulsa, OK © Dr. Tiffany Crutcher
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Fremont, CA © Fremont Economic Development
BDOs are place-based organizations that help small businesses and entrepreneurs to flourish. They have been on the frontline of support for the country’s hardest-hit entrepreneurs throughout the pandemic and have been working to enable thriving commercial corridors throughout the crisis.
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A vacant storefront is the perfect stage to creatively promote the available space or to showcase other businesses and events in the area.
Ripon, WI © RetailWorks, Inc
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Batavia, IL © April Duda Photography
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Asheville, NC © Ablohkin
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© Cindy Shebley
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Meet a recipient of the HartBeat of Main Street Grant Program
Meet a recipient of the HartBeat of Main Street Grant Program
Meet a recipient of the HartBeat of Main Street Grant Program
Meet a recipient of the HartBeat of Main Street Grant Program
Meet a recipient of the HartBeat of Main Street Grant Program
Meet a recipient of the HartBeat of Main Street Grant Program
Meet a recipient of the HartBeat of Main Street Grant Program
Harrisonburg Downtown Renaissance explores how they redesigned their Bricks & Clicks Business Retention Program during the pandemic.
Meet some amazing women business owners!
Read the results of our survey aimed at understanding how business owners are managing the recovery from COVID-19 and responding to recent protests and social unrest related to police violence against Black Americans.
Our research team dug into some of the data about the state of Black-owned businesses on Main Street, the structural challenges they face, and how Main Streets can support them.
Matt Wagner explores how the pandemic may affect the shop small holiday weekend.
COVID-19 has led to a rise in remote working. How can small and rural towns leverage this shift to create vibrant local economies?
Detailed findings from our follow-up survey on the impacts of COVID-19 on small businesses to better understand the continued challenges businesses face as the crisis evolves.
How does psychology impact the recovery of our downtowns after the COVID-19 pandemic?
Small Business Saturday® is more than a day to shop. It’s a nationwide movement that shines a spotlight on the importance of supporting small businesses in communities across America.
The Town of Benson started a special project to highlight their downtown businesses.
The Berkley Downtown Development Authority (DDA) proudly debuted its Downtown Berkley Shopping Bag for a Cause through a partnership between Better Life Bags.
Supporting new and existing small businesses, and the entrepreneurs who run them, represents a vital aspect of the revitalization of downtowns and neighborhood business districts.
The Equitable Economic Development Fellowship is a two-year, one million-dollar effort funded by the Surdna Foundation and the Open Society Foundations to help equity, transparency, sustainability and community engagement become driving forces in local economic development efforts.
The Jefferson Rotary Club partnered with Jefferson Matters: Main Street to offer mini-grants for building facades and storefront signage to two dozen businesses for up to $500 each.
The Wisconsin Economic Development Corporation (WEDC) partnered with Retailworks, Inc., a commercial interior design, display and branding firm headquartered in Milwaukee, to launch Wisconsin’s Main Street Makeover Contest.
Kelly Tompkins of Main Street Enid shares more about the Maker Trail project and how it inspired creativity and helped people discover downtown.
Too often, as we’re strolling our favorite Main Street, we pass empty or dark shop windows that make us want to hurry home a little bit faster. Imagine instead, a charming streetscape adorned with vibrant, lively window displays, showcasing retailers’ favorite products and seasonal gift ideas.
Small Business Saturday promo pic from Downtown Goldsboro, North Carolina, showing all the folks who took the pledge support a small business in their community.
We’ve put together a practical list of some of the things that local store owners can do right now to help them capitalize on this increasing trend in local searches.
From authentic comfort food to farm-to-fork fresh and everything in between, these restaurants, bars, and cafes are key to the thriving social, business, and residential life in the historic commercial districts in Main Street Iowa communities.
Located in southeast Kansas, Independence (pop.8,799) is home to Fab Lab ICC, which is on track to be the world’s leading innovator in combining entrepreneurial mindset education with a fab lab maker space.
The craft beer industry is playing a key role in the rebirth of Main Streets and neighborhood commercial districts across the county.
Appealing to mobility-challenged shoppers yields benefits beyond the store.
Being the only person in the know can be fun, exhilarating even. Except when you are the one person out of 600+ in a room and you know bad news is coming.
Fritz the dog has made his way into the hearts of the residents of LaBelle, Florida, and helped our Main Street Community find a way to make what we do more noticeable.
Altavista On Track, the local Main Street organization, is working to cultivate and sustain local entrepreneurs with an educational business launch competition, Pop-Up Altavista 2.0.
In Winchester, Virginia, one woman’s vision and commitment to downtown’s revitalization created an innovative community space for the Creative Class.
A business retention and expansion plan, properly implemented, not only helps keep businesses open but possibly even helps them expand.
The first rule of conducting business is “make it simple.” The easier it is to pay for merchandise, get entertainment or obtain a service, the more likely it is that people will take advantage of those options.
Main Street communities across the country are no stranger to seeking creative strategies to solve their most nagging issues – vacant buildings, marketing downtown, bolstering retail to name a few.
To understand the role that immigrant business owners play in Boston’s small business ecosystem, you need only to walk through any Boston Main Streets district.
Façade appearance is a critical aspect of the overall aesthetic appeal and unique character of downtown.
A lot of signs are necessary to make a downtown work well, but not every community knows what a good sign system looks like, or how instrumental it can be to the creation of a successful downtown.
Main Street Iowa, a program of the Iowa Economic Development Authority’s Iowa Downtown Resource Center, created a one-of-a-kind three-year program to provide help for performance venues located in Main Street districts.
