Quote:
Originally Posted by Smack dat
For the purpose of this post, I am going to talk about coffee shops but it could be a new bar etc.
In my town, there are a lot of coffee shops both independent and chains. A new Costa has opened up and it's always busy. There are at least 5 others on the same street.
Where did these customers come from? Have they defected from another coffee shop?
Are all coffee shop drinkers spur of the moment and don't just go to one?
Do other business notice a drop in revenue when a new coffee shop opens across the street?
Personally I might go to a coffee shop once a year. I find the prices extortionate.
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I understand the brick and mortar food + beverage trade very well.
People are creatures of habit, follow a routine, and sadly are also generally lazy. Clients which are loyal to the brand will switch locations which are more convenient to them.
When a brand decides to open up an additional location:
- within 30 days of the new location's actual opening, the local media does their write ups,
- within a week of the grand opening, the brand then heavily promotes the new location on the receipts, handbills, and table top displays, at all the existing locations that are within a distance of X km, and
- spend heavily on print, online and radio advertising targeting only those that live and work within X km of the new location.
Yes people from other coffee shops will temporarily try out an alternate coffee shop, which may cause them to permanently defect if they are satisfied by the new venue. Regarding the brand losing its client at one location, only to be picked up by another location of the same brand, this works in brands favor. When happy clients migrate, over time, the word of mouth that they still count on, also spreads out.
Hope that was enlightening.