Case Study:
The impact of retail in Cleveland

Client: City of Cleveland, Department of Economic Development

Project goal:

Mass Economics was retained by the City of Cleveland to support an ambitious data collection and analysis effort designed to better understand the consumer retail and services sectors in the city’s lowest-income neighborhoods.  The data and findings from the project will be used to craft programs to assist individual small businesses in the neighborhoods, as well as to formulate strategies and policy initiatives to create vibrant retail and services districts within the city’s neighborhoods. Because the challenge of creating a vibrant retail and services sector in low-income neighborhoods exists not only in Cleveland but in cities across Ohio and the United States, the project is designed to act as a model for data-driven efforts that can inform local, state, and federal policies to strengthen low-income urban neighborhoods across the country. This project aligned with Mass Economics’ expertise in small business data and analysis, familiarity with growth challenges in low-income urban neighborhoods, and experience in developing strategic approaches that leverage public, private, and philanthropic capital and programmatic resources.

Approach:

In Summer 2013, City of Cleveland staff along with personnel from local nonprofit and philanthropic organizations conducted surveys and site assessment of 40 retail and service sector businesses regarding business practices, market opportunities, and growth obstacles.  Using completed surveys and field notes, the Mass Economics project team created a database that captured each firm’s growth aspirations and opportunities, technology utilization, capital and technical assistance needs, and existing obstacles to increasing revenue and employment, as well as information on building and site conditions. Using GIS and statistical software, the project team developed preliminary findings on current conditions and potential for retail and service sector growth in the surveyed neighborhoods.

Recommendations:

The project team uncovered unique challenges facing small businesses in the low-income urban neighborhoods surveyed for this project. For example, the surveyed businesses operate in neighborhoods that lag much of the country in terms of high-speed internet access at a time when retail strategies increasingly utilize e-commerce and other web-based tools. At the same time, many of the programs aimed at providing capital and technical assistance to local businesses discourage participation by the types of small retail businesses that are common in these neighborhoods. Project recommendations included the creation of partially forgivable loan products for site improvements, the establishment of targeted retail offerings within existing capital programs, and the development of a comprehensive retail strategy for Cleveland’s low-income neighborhoods that is sensitive to the characteristics of local businesses and the neighborhoods they serve.