Why do competitors open their stores next to one another?

Because clustering together makes sense … for many types of business.

Check out this video, especially if you  like ice cream! http://ed.ted.com/lessons/why-do-competitors-open-their-stores-next-to-one-another-jac-de-haan 

If you live in a small town, you expect to go down the road to buy a cup of coffee, milk or bread. You might not expect to walk into the main shopping street of a town and see a long line of furniture stores because these are not frequent purchases.

Food businesses are good examples of how local businesses can benefit from each other, especially when they compete. We can all imagine that having a street or area that has a few restaurants is desirable. We know that this is the place we go for food, what food we may not mind or we might try something different from time to time. We are even more likely to tell others that this is where you go for food.

From small local stores to national big box stores, clustering is good for most businesses. What clusters of business do you see in your favourite shopping places?



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