Why do some stores thrive effortlessly while others, despite offering excellent products and services, struggle? Often, the answer lies in one critical factor: location. You can have the best inventory and the friendliest staff, but if your store isn’t situated where your target customers are, success will remain elusive.
Rituals and Destination Retail
This principle has been recognized for over a century. Walter S. Hayward, in The Retail Handbook (1922), emphasized that store placement dictates profitability. Today, while digital tools have enhanced our ability to analyze locations, the core idea remains unchanged: your store needs to be where your customers are.
A Historic Lesson: Kruidvat’s Expansion Strategy
In the Netherlands, Kruidvat serves as a prime example of effective location strategy. Unlike competitors that focused on premium shopping streets, Kruidvat expanded into high-traffic, everyday shopping areas such as neighborhood centers and near public transportation hubs. This approach made Kruidvat the go-to drugstore for busy, price-conscious consumers seeking convenience.
The result? Over 1,200 stores in the Benelux region and a dominant position in the Dutch drugstore market. By choosing the right locations and implementing a strong discount model, Kruidvat gained a competitive edge that even premium competitors couldn’t match.
Location, Location, Location
A Modern Example: Rituals and Destination Retail
On the other hand, Rituals has adopted a different approach by focusing on high-end shopping streets and prime retail districts. By selecting A-list locations like Kalverstraat in Amsterdam, Rituals ensures its presence in premium shopping environments that align with its luxury branding.
By making the store itself a destination, Rituals attracts customers seeking indulgence and unique shopping experiences. Here, the emphasis isn’t just on foot traffic but on attracting the right type of foot traffic.
Actionable Steps for Retailers
Drawing from these insights, here are three concrete actions to enhance your store’s location strategy:
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Audit Your Store Location
Spend time outside your store during peak hours. Observe who passes by. Are they your target customers? If not, consider adjusting your marketing efforts or even relocating to better align with your audience.
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Prioritize Quality Over Quantity in Foot Traffic
High foot traffic doesn’t always translate to high sales. Ensure that your store’s location aligns with the lifestyle and shopping habits of your ideal customers. For instance, Bever, an outdoor equipment retailer, strategically places its stores in areas frequented by outdoor enthusiasts, ensuring that the foot traffic consists of potential customers.
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Enhance Your Digital Presence
Even with a prime physical location, it’s crucial to be easily found online. Ensure your store ranks highly on Google Maps, utilize location-based advertising, and engage in geo-targeted promotions.
Final Thought
Retail dynamics have evolved, but the importance of location remains paramount. Whether you’re launching a new store or evaluating an existing one, challenge yourself: stand outside your store and ask—if I didn’t own this place, would I walk in? If the answer isn’t a resounding yes, it may be time to rethink your strategy.
References
- Hayward, W. S. (1922). The Retail Handbook. New York: D. Appleton and Company.
- Kruidvat’s Expansion Strategy: “Dutch chain Kruidvat seeks to expand operations to Brussels and Wallonia,” The Brussels Times, October 17, 2022.
- Rituals’ Retail Positioning: “Rituals surpasses €2 billion revenue milestone,” RetailDetail EU, January 24, 2025. Link
