StreetSmart: Reinventing Retail Through Smarter Small Business

Abstract

Before the COVID-19 pandemic, the retail market in U.S. cities was widely acknowledged to be overbuilt by about one billion square feet¹. The wave of lockdowns and restrictions on retail operations further exacerbated the distress in the retail market, with bankrupt major retail chains closing stores sending rents plummeting. Simultaneously, the rapid rise in eCommerce coupled with the COVID-19 pandemic exacerbated inequalities in minority-owned businesses, including ownership rates, revenue, and access to financing. The pandemic also led to the closure of street retail, increased demand for eCommerce and logistics space, and resulted in retail supply chain operational challenges and disruptions which disproportionately affected minority businesses. It is also estimated that the US may need an additional one billion square feet of logistics real estate to meet growing eCommerce demand. These trends taken together can have important implications for U.S. cities. Brick and mortar retail, storefronts, and street commerce, are critically important to the vibrancy of cities and a key social attraction of urban centers. This thesis explores a solution to the problems faced by minority-owned small businesses. By responding to changes and opportunities in the retail landscape, the competitiveness of minority-owned businesses can be strengthened. This thesis explores a solution—Venture Design—responding to changes and opportunities in the retail landscape designed to enhance the competitiveness of minority-owned businesses. The Venture Design framework developed by MITdesignX was applied to create a proposed hybrid-retail approach as a venture opportunity. This thesis makes the case that minority small businesses are uniquely positioned to leverage such a solution to remain competitive in the changing retail landscape.

¹Cody, Kevin. Retail Market May Be Overbuilt to the Tune of 1 Billion Square Feet, April 14, 2021. https://www.costar.com/article/1488563638/retail-market-may-be-overbuilt-to-the-tune-of-1-billion-square-feet.