Getting customers downtown: the role of branding in achieving success for central business districts

Abstract

PurposeTo extend the research focuses of downtown business districts beyond the urban planning literature through application of the resource‐based theory of the firm. Downtowns may act like firms (with a collection of SBUs), and therefore should possess resources that provide competitive advantages.Design/methodology/approachA multi‐method approach (focus groups; survey) is used to examine, a priori, the resources that provide competitive advantage for downtowns, including brand identity, business mix and community characteristics. Structural equation modeling is used to test the measurement of the constructs as well as estimate the effects of those constructs on downtown success. The data were collected from business owners within 11 downtown business districts in the US Midwest.FindingsConfirmatory factor analyses reveal that brand identity, business mix and community characteristics are three distinct measures of downtown resources. Brand identity was found to have a significant and positive effect on downtown success. Though the literature points to the importance of both business mix and community characteristics, these did not have a significant effect on downtown success.Research limitations/implicationsBrands in general are posited to be less mobile than other firm resources, and thus may provide a more sustainable competitive advantage. By combining diverse areas of study, operationalizing new constructs, and testing measures, both the resource‐based view (RBV) and brand research are extended.Practical implicationsSince most downtown business districts (and the small businesses therein) have finite resources, to identify those which provide the most sustainable competitive advantage is critical to success. In this study, brand identity is the most important resource a downtown can possess.Originality/valueThis research moves the study of brands beyond “product” towards the concept of place branding. It extends the RBV framework to conceptualize downtown business districts as “firms,” thus allowing the identification of resources that lead to successful downtowns.