Location and Trade Area

Chapter 4: The Bookstore as a Retail Business (7)

It has often been said that the bookstore business is all about location. Especially for a typical new bookstore, if you can buy the same items at the same price anywhere, it is obviously more convenient to have a store in a good, easily accessible location. Also, for typical used bookstores, while it may not matter as much for sales, used bookstores do compete with each other when it comes to buying books. If buying is your main focus, you want to handle as many unwanted books as possible in an area where a certain number of people who read books live.

The area where the people who use the store live is called a "trade area." When you go to consult with a major book wholesaler about opening an account, if the discussion proceeds positively, a trade area analysis will be conducted. A circle is drawn on a map centered on the planned store location. Based on data such as how many people live within that trade area and how many bookstores already exist and how much sales floor space they have, an analysis is performed to determine whether a new bookstore can succeed at that location. If there is already enough sales floor space for the population, the conclusion of the analysis will be that "a bookstore is not needed in this trade area at this time."

Of course, accessibility is also a factor. In urban areas, being close to the station is best, while in the suburbs, facing a major road is preferred. Naturally, being on the first floor is ideal. Keiichi Kikuchi, the founder of "Village Vanguard," once said that when he was about to open a store in a property that required climbing thirteen steps, a wholesaler representative warned him, "For every step you climb, sales will drop by 10,000 yen" (*).

However, such analyses are based on the premise that all bookstores are more or less the same. A store's charm and individuality are difficult to quantify. Yet, it is precisely that charm and individuality that are important.

Thinking about it that way, one could say that location does not matter all that much. Even if it is something you can buy anywhere, if there is a space you can only experience by going there, or people you can only meet by going there, people will make the effort to visit.

On the other hand, that is precisely why location can be said to be important. If you choose a location for reasons other than simply because there are customers in the trade area, why that place? To put it grandly, the location also expresses the store's philosophy. It might even be enough to simply say that you like that town or that place. When a store continues to exist in a certain town, the individuality of the town and the individuality of the store overlap and begin to influence each other. The town creates the store, and the store creates the town.

If the stores have individuality, they will not compete much even if their trade areas overlap. While large bookstore chains are likely to compete if they are near each other, small bookstores, which cannot compete on the sheer volume of their selection, are actually better off gathering in the same town. This is expressed in the phrase "bookstore hopping." By creating a route that visits multiple nearby stores, horizontal connections between stores are formed, and the benefit of attracting people who come specifically for that town is greater.

Also, in this day and age, location does not necessarily refer only to the physical place where the store is located. If you think about where your customers are from a broad perspective, deciding which social media to use actively or which platform to use if you are doing mail order can also be called a location strategy in a broad sense. "Mangasick" in Taipei, Taiwan, strategically uses Facebook in Traditional Chinese for its domestic audience, Instagram in English, and Twitter in Japanese, allowing it to reach out to the world despite being a small store.

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* Keiichi Kikuchi, "A Holiday at Village Vanguard" (Shinpusha, 2005)

※ Reprinted from "A Reader for Future Bookstores" (NHK Publishing), pp. 176-178