Steve Imke, Chapter 206
Colorado Springs, Colorado
A real-time snapshot to study
During a recent trip to Seattle, I browsed the famous Pike Place Public Market made famous for their fish market. Fishmongers clad in white aprons and sea boots entertain the crowd as they seek out customers looking to buy their fresh fish selection. If a customer selects a salmon, he grabs the customer's nearly whole fish from an ice-filled display and heaves it over the display stand to be processed. Employees yell in a singsong fashion "Fish for Bobby," or whatever the customer's name is, while tourists take pictures of the spectacle. This goes on all day, every day, and no matter when you stop by, people are everywhere and sales at the fish market are brisk. It would seem that locating a business in the Pike Place Public Market would guarantee success for a retailer. However, foot traffic alone is not the only determinant of a location's success.
The west side of the street, where the fish market is located, is filled with shoppers jammed so tightly they are forced to bump into one another to navigate through the various vendors' booths. A mostly-cobblestone pedestrian thoroughfare separates the retail stores on the east side by a mere twenty yards, yet the stores there are nearly absent of customers. Therefore, the mere proximity to high traffic areas may not be enough to produce customers.
As I observed the pedestrian traffic pattern, I wondered if the rent the retailers on the east side were paying was similar to the rent of the retailers on the west side, in spite of the reduced traffic? Rent is mostly proportional to the tenant's ability to generate revenue. This is why some retail locations can charge $40 per sq foot and another cannot find a tenant at $7 per sq ft. Therefore, the cost of rent needs to be directly related to a business's sales potential.
Next, I observed the industrious entrepreneur often selling some obscure product - like astrological calendars or jewelry made from animal poop - leaning over their display tables, practically grabbing customers as they walked by. These booths always had customers in discussion with the sales person. Other booths were obviously manned by non-commissioned employees who sat on a stool, eyes fixed on a mobile device, texting away, or with their nose in a book until a customer demanded their attention. Which booth do you think had more sales at the end of the day? Therefore, even relevant customer traffic is not enough; a business has to have employee involvement with the customer to leverage the traffic.
Lastly, I noticed buyer demographics and the effect on booth or shop popularity. Aside from the locals drawn to the market for fresh food, the remainder of the traffic was made up of tourists. Booths and shops that catered to the tourist demographic, which sold mostly cheap products such as T-Shirts and souvenir items, experience high customer sales, while booths and shops focused on selling more novelty items, like old movie posters or specialty items for dogs, had lots of lookie-loos but few buyers. Therefore, traffic into your store is not a guarantee of a sale unless the customer demographic is matched to your products.
In the end, location is important for any retail operation, but the savvy retailer must also consider specific consumer traffic flows, rent ration to potential sales, employee motivation to exploit the traffic, as well as a product that matches the shoppers' demographic.