Luxury Retail and Digital Management, 2nd Edition

Chapter 13Location of Sales Points

In a real estate context where every square metre counts, the ultimate luxury is empty space. A space that is not ‘productive’, that is not commercial, one that encourages contemplation, discretion, movement and luxury.

–Rem Koolhaas¹

In the past, the response to the question of the location of retail stores for luxury brands seemed very simple: one only had to install them in the immediate vicinity of their main competitors. The industry thus seemed to have perpetuated the old medieval system, when every member of a particular trade strove to find a place on the same street as its main competitors.

But what type of sales outlet should one open near competitors? What size? And what would be its function? An in-depth analysis of each catchment area, though it might be more useful for the management of a supermarket chain or specialised chain stores, is not without interest for a luxury brand. Lastly, one should also address the question of rental costs for stores in various countries, which could explain, to a certain extent, the strategies for setting up new stores at one place rather than another.

The Classification of Stores in the Mass-Product Market

In the case of mass products, there are three types of commercial configurations: destination sales outlets, convenience stores and incidental outlets.

• Destination outlets correspond to situations where consumers purchase items following a complex planning process, and for which they are ...