Retail
July 9 2024
Choosing a location for your retail store is a big decision. It can make or break your business. The old adage “location, location, location” still rings true, but there’s more to consider than just a catchy address. In today’s data-driven market, retailers need a strategic approach to site selection. Here are some key factors to consider: Know Your Target Customer
Corner of Fifth
Choosing a location for your retail store is a big decision. It can make or break your business. The old adage “location, location, location” still rings true, but there’s more to consider than just a catchy address. In today’s data-driven market, retailers need a strategic approach to site selection. Here are some key factors to consider:
Know Your Target Customer and Where They Are
Understanding your ideal customer is crucial. Retailers and brands need to analyze demographics such as age, income and shopping habits and choose a location where your target market lives, works and plays. It should be a location with high visibility and easy access. Consider foot traffic, parking availability and proximity to public transportation. Is the location on a busy road or near a major intersection?
Competitor Check
Research existing stores in the area, both direct and indirect competitors. Is there a gap in the market your store can fill? How will you differentiate yourself from the competition? Consider co-tenancy with complementary businesses that can attract more customers. In researching the competition, study their social media content and sign up for their newsletters and promotions. What and how are they marketing to their customers? How are they engaging? For example, are they offering special or exclusive deals or product drops to customers who sign up for their marketing? What are customers saying in the comments? Are they happy or have add issues?
Size Matters
The size of your store should reflect your needs and the type of merchandise you sell. Factor in storage space, employee areas (including break areas) and customer comfort. Don’t get stuck in a location that’s too small or too big for your operation. In Asia, traditional department stores are reimaging their footprints, making them smaller and more tightly merchandised. Other retailers are expanding to larger footprints and adding more space for experiential activities such as custom fragrance stations, personalized greeting cards and even vintage arcade games. In each case, the merchandising strategy informs the store size.
Numbers Don’t Lie
Crunch the numbers! Analyze the cost of rent, utilities and build-out. Factor in potential revenue based on the demographics and competition in the area. Make sure the location makes good financial sense for your business. Many counties in the U.S. have local business development agencies that provide free counseling. They have access to localized data that can help inform your decisions.
Embrace Technology
Data is your friend. Utilize demographic and traffic data tools to identify ideal locations. There are also software programs that can help you analyze potential sites and project future sales. Traffic data platforms such as StreetLight Data, RetailNext and Placer.ai can help. The latter even has a set of free tools.
By carefully considering these factors, you can increase your chances of finding the perfect location for your retail store. And don’t go at it alone. There are commercial real estate agencies that can help. Of course, they want to close on a lease, but your success is their success.
Remember, the right location can be a game-changer for your business, driving sales and building customer loyalty. Don’t settle for anything less.
