“There are three things that matter in property: location, location, location.” -Lord Harold Samuel
Today, this proverb is widely accepted as gospel in commercial real estate. But is it still true? For the answer, let’s consider the synopsis of Trade-off, a new book coming out in September:
“(A)lmost every decision we make as consumers involves a trade-off between fidelity and convenience.”
In this statement, convenience and location are basically the same; fidelity is something like quality. So today we base our decisions on quality and location. This is nothing new. But here is the twist: location has always been certain, while fidelity is more ambiguous. Today, however, Yelp offers more certainty in quality, while Google Maps and GPS systems lessen the strain of convenience (i.e. getting lost in a new place). As a result, the desire for quality has and will increase, while the need for location will decrease.
What does this mean for your business? If you own a retail business and you think location is most important, think again: while it still has value, the greater value is in creating a fidelity that renders location irrelevant. In other words, if your cafe makes the best coffee, has the best atmosphere, and is open the best hours, it can be located in a strip mall and still have a strong customer base.
Conclusion: A better mantra (for retail businesses) is “Quality, Consistency, Location.”
(ht: Seth Godin)