This month's Harvard Business Review features a story on the many businesses that are deciding to move back to the city. A few decades after the great push to relocate to the suburbs, the tables have turned as the business climate in general has changed.
What's intriguing about this story is not simply the locational decision-making, but how the urban and the sprawl environment lead to very different ways of doing business. For example, take the standard retail or food service operation. If you've set up shop in sprawl, you have a matter of seconds to make your potential customer want to stop and come in. This is simply because he is traveling 45 miles an hour and experiencing the outdoors through a windshield.
This forces you to decouple the marketing from the actual customer interface and reconnect it back again through branding. The hope is that Joe driver has built enough of a positive experience through television commercials and other ads beforehand that they all come rushing back to him the moment he sees your brand hoisted on a sign above the highway. This process tends toward economies of scale in a big way, hence the dominant position of franchises and multinational companies.
The customer interface in an urban environment has the ability to be more prolonged and textured. The proverbial window shopping experience piques the imagination of customers by putting actual products right in front of them. The window display can be changed, so the experience changes with time. The chalk board announces the special of the day. Perhaps there are smells wafting out from the bakery, or the familiar clanging of glasses alerting the customer to the bustle of a restaurant inside. The retail environment can spill out onto the public realm and beckon passers-by to ease themselves in, something William H. Whyte called the "sensory street." Most importantly, the customers themselves are on display, either siting outside at cafe tables or browsing the goods in the window. People are attracted to the hub-bub.
The whole urban marketing experience is more relational, playing off both the merchant-client relationship and the client-client relationships. Branding may always be important for establishing trust and connecting experiences to each other, but in cities that function as cities it's not the only game in town. This arrangement allows local businesses to vie head-to-head with the major franchises.
The article concludes:
"In many ways, New Urbanism and the trends it captures are part of broader recent changes businesses already accept: the shift to an experience economy, consumers’ and employees’ demands for greater corporate social responsibility, an emphasis on work/life balance, and the importance of interaction between companies and their customers. The demographic aspect is simply the newest part of an ongoing conversation. Companies that recognize the larger trend, however, and seize the opportunities that it presents will contribute to its social impact—and may gain a competitive advantage in the process."