As someone who loves to spend my paycheck shopping for clothing, I frequent the Tampa International Mall quite often when I am home for the summer or on breaks. I love Nordstrom, Lululemon, and mainly boutique stores, which happen to be on all different sides of the mall. As I walk from one end to the other, I have noticed how close together the designer or higher-end stores are in comparison to your "lower or average-priced" stores. In fact, Gucci, Louis Vuitton, Tiffany's, David Yurman, Michael Kors, Coach, Saint Laurent, Swarovski, Golden Goose, and Tesla are all located on the second level near the food court right next to one another, just within a few steps.
This is a perfect example of Spacial Location Theory. Spacial Location theory is the idea that if there are two firms with identical output, uniform distribution, and spatial mobility, they will eventually come to locate next to one another in the middle of a specified distance to steal customers from each other and limit the distance the average shopper has to walk in order to shop in their store. If you think of International Mall as its own community, there is in fact an optimal place for these types of stores to set up as they try to poach other shoppers interested in designer items -- the exact center of the mall right next to one another. And they did just that. These designer stores have close to similar outputs (high-end clothing, shoes, and jewelry) and are drawing a similar demographic of people who want to exemplify they have money to spend on their appearance. Setting up shop right next to one another shows that these designer companies understand the need to "race to the center". Instead of being scattered around the mall, they can all converge to the median and maximize their profits, and individuals chose these stores to maximize their utility.
No comments:
Post a Comment