A few weeks ago, while driving back from Florida to Savannah on I-95, I had a need for a caffeine fix. You know how these things are – those long drives on straight, fast highways often require some extra stimulation.

Jamie reached over to her trusty Iphone, and used one of the apps (Road Ninja? Yelp?) and found the nearest exit with a Starbucks, and the exact location. Combined with the trusty Google Maps app, we easily found it in a somewhat hidden strip center, and headed on down the road. Those billboards and blue directory signs were completely unnecessary.

road ninja iphone app

The Road Ninja App

The experience got me to thinking about how one of our precious rules of retailing is quickly becoming irrelevant. The rule? Location, location, location.

That’s right – the sacred mantra of real estate that states what the 3 most important characteristics for success are.

First – a brief history of real estate. First, you had to be near water. Then, you had to be near rail. Then, you had to be near a busy road. That brings us to today. Like I said – brief.

We’ve held to the notion of the importance of location for obvious reasons. If you’re in the retailing business, for example, you want people to see your business, and know that it’s there. Whether or not someone stops when they see it immediately is irrelevant – the key is that your presence has been fixed in their brain. When they want to visit, they’ll know where to go, because they see it or pass by it often.

In the days when people primarily got around on foot or streetcar, this led to commercial strips, main streets and neighborhood centers at important stops on the route. In the switch to cars, it led to every retailer wanting to locate on the busy commercial highway strips, so that drivers could see their stores. Even in the revival of main-street style retail and urban retailing, the presence of cars going by has been critical. It’s a key factor why so many of us decry pedestrian malls – their lack of car traffic drastically reduces the number of “eyes on the stores”, and thereby reduces the customers. Result: businesses don’t want to locate there. This is the case whether it’s a grocery store, a drugstore, or a coffee shop. Businesses simply need visbility.

Or so we thought.

That world that we’ve all become familiar with in planning and development appears to be on the verge of turning upside-down. In the new world of commerce, every business drives people to their stores with Facebook pages, reviews on Yelp and Urbanspoon, and specials via Twitter. A plethora of smart phone apps can easily lead you to any category of business. Food trucks in many cities even change their locations daily, and tweet them to their thousands of followers.

I no longer need to walk or drive by a business to know it’s there – I simply need to access its location on my phone, and follow the GPS-enabled map to get there.

The real question is – how will I know how to find Dairy Queen? (hint: use the Find DQ app) No, of course the real question is how will this technological change impact how we use our cities and towns, and how real estate is valued? That’s clearly two questions, but if you read this far, you know how they are related.

If a business knows that it can reach its customer base through phone apps, Twitter, etc, will they really care much about their exact location? Does Groupon drive more people to your business then being on a busy street, or near an anchor store?

These questions are un-answerable right now, but it’s unequivocal that the changes taking place will be profound. Savvy entrepreneurs will soon be able to make “B” and “C” locations in conventional terms work far better than they ever did in the past. In fact, some are already doing this.

What will feel more pain – the commercial strip that needs drive-by traffic, or the main street that relies on heavy pedestrian traffic?

Play futurist for a minute – how do you see this affecting your life? Do you have a favorite new business that you follow more on social media than because it’s on a busy street?

 

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9 Responses to Will SmartPhones make location irrelevant?

  1. Stu Sirota says:

    I would agree that the importance of location is decreasing from a “visibility” standpoint, but I would posit that the importance of location is actually increasing from a “proximity” standpoint. That is, locating businesses and services in close proximity – specifically in walkable, bikable, and transit-accessible formats – to other land uses. Why? Higher vehicle operating costs amid an unstable and uncertain energy future, worsening roadway congestion and conditions in which government can no longer fund roadway capacity expansion or even routine maintenance, and shifting preferences toward walkable urban lifestyles are all pushing urban form toward conditions where retail and other services will benefit by being within walking distance of compact activity centers of housing, schools, jobs, and transit stops.

    Smartphones are great for helping us find services when we are travelling away from familiar surroundings but I don’t believe that GPS technology will negate the re-emerging need to cluster diverse land uses to support walkability. While the auto-oriented sprawl paradigm was diabolically efficient at doing just that – largely decimating the physical and social fabric of our cities and towns – I think that era will be seen as a historic aberration, and I don’t think we will see a repeat of the devaluing of compact urban places again. At least I hope not for the sake of future generations.

  2. Marisa Page says:

    I believe that humans are creatures of routine. Unless something is not working out well for them, they will stick to their routine. iphones and smart phones are only so new, so many places people go to are already stored within their habits.

    When it is “on the go” situations, like your crave for caffeine, I believe it is a combination of the GPS technology and your knowledge that Starbucks is a well known coffee shop (which relates to the visibility of seeing the Starbucks sign).

    If the architecture, visibility and stature of the coffee shop you were brought to through your GPS made you feel uncomfortable, the possibility that you would have picked another place is still there.

    So I believe that iphones and smart phones that bring you to places are just a way to help assist you. If you do not like the place the GPS brought you, you still have the option to not go inside.

    Both businesses, ones that rely on drive by traffic and ones that rely on pedestrians can both survive and strive based off of word of mouth and the way their business is presented.

    If any GPS can take you somewhere, but once again the people using the GPS still have the decision to walk inside.

  3. This is an interesting essay, and it bears on the role of cars in future access to services. Cars will remain important, increasingly less dependent on increasingly more expensive gasoline.

    For example, in the Seattle region’s award-winning metropolitan transportation plan for massive investment in urban centers, walkability, bicycle-friendliness, transit, and electric vehicle charging stations, the computer modeling forecasts an 83% private vehicle mode share for trips in 2040, with a bike/ped mode of 12% and 5% transit (mostly commuting to work).

    If a business has a desire to attract customers who are driving in cars and electronically searching (hands-free, voice-activated, increasingly) for what the business offers, such prospective customers coming from the road will expect close-by vehicle parking, or drive-through service. These are location features the businesses over time will be prone to note in electronic listings, especially if its location in a dense urban area makes that availability questionable.

    Market-leading Starbucks and McDonalds note available drive-thru in their electronic listings. Availability of parking is reasonably clear in McDonalds’ listings, and not so clear in Starbucks’.

    Electronic visibility will be an increasingly important asset for one-off retail locations deep in pedestrian-only locations not observable via eyeball from the streets and public sidewalks.

  4. Pat says:

    Location is still extremely important. I know of good businesses in bad locations that I will never visit.

    For example…

    I know of a vegetarian restaurant that my friends have told me is really good. I know exactly where it is. In fact I drive by it twice a week. But I never stop. Why?

    Because it is located in a strip-mall on one of the most traffic-choked, pedestrian unfriendly, soul-deadening, cluster-f#@$d intersections in the entire metro area. I don’t care how good the food might be, I won’t go because I don’t want to be there. It spoils my apetite just thinking about the location.

  5. Kevin, I thoroughly enjoyed your most recent blog post on smart phones, as well as your suggestion to play futurist for a moment. As I see it, the social media effect could play out in one of two (or both) ways. (1) as you seem to suggest, off the beaten trail retailers are no longer at such a strict disadvantage, making off the beaten trail sites more attractive (it’ll take time for the market price of a sites to catch up with the shift in location as a mantra), which seems to only lead in one direction–placeless everywheres. On the other hand, (2) Because of this ability to go and be anywhere, people will gravitate toward those places that are more desirable for inherent reasons (location, in my mind, serves more than a utilitarian function, and I suspect strongly that you agree). So, I see the app situation ultimately playing out in both of the above ways, with retail sites no longer focusing as much on locations with high traffic or accessibility, but instead focusing on markets that create desirable overall places with aggregate value (Newbury Street in Boston, Church Street in Burlington (VT), Exchange Street in Portland (ME)) — the next market shift we’ll see is retailers and developers seeking to become place-magnets, and I think a lot of that is happening already. What do you think? Thanks again for an interesting question.

    Patrick

  6. I found your post interesting because at one point I was focused on creating a law practice in which physical location was irrelevant. I was successful to a large degree and I wrote about it here. http://www.shawnjroberts.com/the-tools-for-making-your-work-location-irrevelant/

    Now, I am asking the question: While I can physical location largely irrelevant, is that a good thing?

    I am not certain it is.

    Shawn

  7. Will Selman says:

    I think Stu has it right. This article from The Atlantic Cities (link below) may indicate as much. The fastest gentrifying zip codes in the US are in downtown locations; the desire for proximity may be a partial driver for this.

    http://www.theatlanticcities.com/neighborhoods/2012/06/are-these-fastest-gentrifying-neighborhoods-us/2249/#.T9dIBzYyml4.facebook

  8. Pat, try looking at it the other way around — the place you want to avoid is that way because everyone is already there: it’s located on the strip. That’s the conventional way of drumming up business, and it seems to have worked in that instance (too much, it sounds). The question here is, would the same restaurant fail if it were located off the beaten path? Whereas the answer used to be yes (probably), today it is not so clear. While the attractiveness of locations still matters I think the actual geographic coordinates matter less, due in large part to the ability to locate services even off the beaten path by not just smart phones but a plethora of other electronics. Good discussion.

  9. Bruce Donnelly says:

    Kevin,

    I agree with Stuart. I think we’ve had a long trajectory in which being close to particular spots has been decreasingly important. Note that it wasn’t just about locating near water. It was really about locating in one of the rare locations where it was helpful–at a waterfall, at a natural harbor, below rapids, and so on. Then came rail which spread us out a bit. Then came cars, which tend to repel each other. Now, I believe we’ll be going back to rail & BRT, so we’re circling back to that.

    However, as self-driving cars come online, the nature of traffic and transit may change. Basically, once you’ve got self-driving, you can rent your car out as a taxi, so the lines may blur. You may have the ability to read and do other things combined with the point-to-point availability of cars.

    As to apps, etc. we may be going to an attention-based economy. Advertising is reaching natural limits on our attention, and if we think in terms of attention, watching ads is a lot like working. Either way you’re trading your attention for value.*

    So where does that leave us? Perhaps the value of “already there” or “already in touch” will rise, since it requires less attention. That means that things like personal introductions, reliable summaries, and co-location in communities will be important.

    * You’re welcome for this comment, by the way :)

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