Tourists Drive NYC Retail Sales

Tourists Drive NYC Retail Sales
Shoppers on Madison Avenue last week

NEW YORK — As tourism here continues to rise, footwear retailers said they are seeing a new consumer demographic eager to spend in their stores.

According to NYC & Co., the city’s official marketing and tourism organization, New York had a record-breaking 52 million visitors last year, 11 million of which were international tourists. This year, the number of foreign visitors headed to the Big Apple is expected to climb to 11.4 million. And while here, they are likely to go shopping.

NYC & Co. estimates that retail shopping makes up 22 percent — or $8 billion annually — of the money travelers spend in New York.

“The city has done a tremendous job of getting the word out about what we have to offer,” said Matthew Bauer, president of the Madison Avenue Business Improvement District and a member of NYC & Co.’s retail committee. “For Madison Avenue, retail is certainly the major draw, and there’s been a lot of excitement here.”

In the past six months, 14 new stores have opened in the luxury district. Bauer added that the five hotels in the area and local attractions such as The Metropolitan Museum of Art and Central Park also have contributed to making the neighborhood a go-to shopping destination for spendy tourists.

“All these things combine to make an incredible visitor experience,” he said. “It’s a dynamic place that’s appealing to visitors looking for luxury.”

Edna Galo, owner of Galo Shoes, said she has noticed an increase in out-of-town shoppers at her Madison Avenue store. These consumers, she added, are quicker to make a buying decision than the locals.

“Their consumer behavior is different in the sense that they spend less time considering a purchase,” Galo said. “They’re not saying to themselves ‘Let’s think about it,’ whereas the resident can always come back.

“Tourists certainly have access to designer stores if they’re coming from the West Coast or southern parts of the country,” Galo continued. “If they’re [buying] here, they want to buy shoes they can’t find at a department store or elsewhere.”

Private-label products have been hot sellers among tourists for Galo, as well as at other boutiques throughout the city.

Randy Ochart, owner of French Sole, noted his private-label items have had good sell-through among tourists. However, the retailer pointed out that most of the international shoppers haven’t been from Europe, as in years past.

“We have been seeing more tourists this year, from Asian countries,” Ochart said, adding that customers in this demographic have been buying more high-end products.

Sales from foreign shoppers is so important to French Sole’s business that Ochart has store associates who speak a total of five languages, including Mandarin. He also is considering taking out advertising in Chinese periodicals.

Manhattan isn’t the only place in New York feeling the rush of tourism. Storeowners in Brooklyn also have seen a wave of new shoppers.

With Brooklyn’s close proximity to Manhattan and less-expensive hotels, many travelers are spending more time in the borough.

“We have a lot of activity at our Williamsburg location,” said Dani Kahalani, owner of DNA Footwear, which has five doors in Brooklyn. He added that the hottest sellers are styles from Toms Shoes, Vans and Converse. “[The Williamsburg store] is closest to the city and it’s the coolest destination to be in New York right now.”

Rick Lee, owner of Brooklyn’s Soula, said the changes in the borough have meant more foot traffic from European tourists, though it hasn’t necessarily equaled additional profit.

“The economy in Europe isn’t doing so great, so we’re getting tourists, but it doesn’t translate into sales,” he said, adding that these shoppers have been more value-conscious than in years past.

Infinity Shoes buyer Dan Kenigsberg, who oversees the retailer’s five stores throughout New York, said the weakness of the euro, as well as other factors, has caused tourist revenue to be somewhat flat.

“Unless the euro is strong, there isn’t much encouragement for European tourists to buy here,” Kenigsberg said, adding that the city’s short spring season this year also hindered shopping.

Although New York may not be the shopping destination it once was for European travelers, it still appeals to visitors from countries with developing economies.

Joe Welter, Deloitte’s Northeast regional sector leader for consumer products and retail and distribution, said he expects an uptick in visitors from countries such as China, Australia and Brazil.

NYC & Co. forecasts that visitation from Brazil will increase by 8.4 percent by 2015, while Chinese tourists are expected to grow by 8.8 percent.

“When you think of folks from burgeoning economies — where there’s a larger portion of people in upper-income brackets — coming to visit, it’s a positive force for local retailers,” Welter said, “especially when people from these countries have proven to be consumers of luxury goods.”