The dataset that I have built from my dissertation research on The Hague and Detroit (and that is currently being expanded to Vancouver and Birmingham) is fertile ground for studying the micro-scale behaviors of ground floor businesses. As retailers have come under increasing threat by consolidation and online competition, shopping streets across the Western world have come under threat. Is there rhyme or reason to the geography of this decline? If we know how retailers close, we can counter this pattern.
Together with my colleague Rainer vom Hofe at the University of Cincinnati, I have studied the effects of clustering on closing retailers. To find a common pattern of retail decline, our research delves into a century of retail change in two cities on both sides of the Atlantic between 1911 and 2011. We deliberately picked cities that seemed like perfect opposites: the beleaguered downtown of Detroit in Michigan and the award-winning city center of The Hague in The Netherlands. First impressions might fool you, as both cities actually experienced a steady and significant decline of retailers over the past century: the demise of downtown is a much longer-drawn story than one might imagine. Our study focused on how this decline happened at the level of individual establishments, specifically whether there were patterns that would influence the chance of a retailer closing. One of these patterns is the location of shops: retailers in more remote and poorly connected places were the first to shut down over time. At an even smaller scale, we discovered that shops in larger clusters had a much lower chance of closure. In other words: if shops want to survive, it’s best for them to stick together.
This finding corroborates common economic thought, but has thus far never been proven with data at this level of detail. Furthermore, we have found the first signs of an increased sensitivity of retailers to clustering depending on the type of merchandise they sell. The research results have been published in the Journal of Urban Studies, and you can read a synopsis on the London School of Economics weblog.
These findings are part of my ongoing research agenda on the transformation of urban retail. Expect more results soon!
Both Detroit and The Hague have experienced significant retail decline, which shows remarkable similarities in their location and process.
Retailers are highly sensitive to clustering in their longevity.