Towngap Blog

I had the pleasure of living in Maine for a couple years, and there's one location that always sticks out in my mind. On busy Route 1 between Rockland and Camden there was a building overlooking the bay, with ample parking and plenty of Maine charm. I think the first time i drove past it, there was a Denny's there. Within a couple months, a sports bar. Fast forward less than a year, and it was a shoe store. 

This one location was eternally turning over, largely because the businesses going in didn't understand what the Mainers (and more importantly the summer tourists driving by) really wanted. Meanwhile, just a couple hundred yards up the road there was a guy that sold fresh seafood out of the back of his truck… and let me tell you he did amazing business. There was always  a line of cars parked on the shoulder waiting to get whatever the day's catch was. Having stopped to talk to this guys a couple times i found out he had tried selling all kinds of things, but after years of listening to what people living there told him he focused on what they asked for most.

The simple lesson learned from that guy and his seafood truck was profound: if any of the dozen or so failed businesses down the street had spent the time to validate what the market actually wanted, they probably would have succeeded. Communities will tell you what they want, you just have to listen.

By the way, if you ever happen to be driving up Route 1 make sure to stop and say hello to Alvin.

I've spent most of my career in geographic information systems, and have worked on a fascinating array of projects all over the world. One focused application of this technology i've done a lot of is site selection analysis, determining where the best possible location for x based on y variables.

On the commercial side it's truly amazing what businesses know about markets by utilizing compiled demographic data, spending metrics, even proxy datasets such as utility consumption. You know those two Starbucks practically across the street from each other, or the bank branches ever other block? Yeah that's no accident, those are all determined by multivariate models that ensure economic viability. Every business has their own secret recipe, but essentially they all come down to a prescribed revenue threshold and competitive positioning.

At the end of the day, these models may show what has potential to be profitable, but what ultimately determines the success of any new business is if the people in that area that will choose to support it or not. As far as technology can take us, consumers always have the final say. Site selection analysts everywhere would kill to know what consumers actually want, but up until now this communication channel hasn't existed.

These days you can buy virtually anything online. With one quick search you can undoubtably find a cheaper product, and in an age of retail competition it usually includes cheap (or free) shipping. Consumer convenience has never been better.

So why have we at Towngap chosen to focus on brick and mortar in a time of e-commerce? And why now?

The answer is that while some view e-commerce as the death of retail, we see it increasing the importance of local experienced based businesses.

Even though commodities may become cheaper online, local businesses are the only way to deliver experiences. While we might not care about the experience of buying toilet paper, we sure do value a night out at a restaurant, or a Saturday morning trip to the Farmers market. We can order coffee online, but what we're really after is the experience of sitting in the coffee shop. There are all kinds of niche experiences that fall into this category (sports, creativity, fitness, entertainment, productivity, health, dining, etc ), and those businesses that are always going to be inherently local.  

These locations are the glue that define our communities, and hold together our urban economic fabric. Smart guys like Jason Calicanus have written about this trend, and it's one we think will grow increasingly important as more traditional commodity supply moves online. The new challenge is understanding what kinds of experiences communities want/need, which will determine which businesses can survive in an increasingly online world.

Growing up in the small town of Prescott AZ I saw a lot of businesses come and go. Being a sleepy little mountain town it was off the radar of most big businesses, though we got a steady stream of average stores trying their luck. What always amazed me was how far people would drive to get a quality product. Phoenix is about two hours away from Prescott, but lots of people i knew would drive that distance just to shop at Trader Joes. 

I can't tell you how many times I heard people around town say, we should  get together and create a petition to get a Trader Joes here. Of course nobody ever did, but if you do an online search today there are actually lots of communities still talking about trying to get a petition together to bring one to their town. Technology has advanced a lot in the past decade, yet communities don't have the tools to take advantage of it and communicate their needs more effectively.