“Location, location, location” is a real estate agent’s mantra, but it’s not just for Realtors anymore. The location of a retail store influences how the store fares both in its initial opening and for the long-term future. By studying up on the factors that influence sales in particular retail locations, you can avoid quite a bit of stress in choosing a location — not to mention financial difficulties if you choose poorly.
If you’re looking to expand into a new retail location or thinking about moving your store, read on to learn five tips for choosing the best possible location.
1. If moving to a new city, consider the size and personality of the city. Taking into account how many people live there and what their interests and lifestyles tend to be can have a huge affect on how successful your business would be there. Who has purchasing power within the city — is the inner city very poor but the suburbs wealthy? Also consider the competition in your new city. Are there already a lot of well-established businesses that sell what you sell? If so, you may have a hard time making inroads into this new territory. Look too at trends in the population of the city. If you own a sporting goods store, for instance, you’d probably have better success in a city where many people are outdoorsy than, for instance, in a city with a high obesity rate.
2. What else is in the area? You’re going to have better luck in any particular location if other businesses nearby also cater to the same demographic. A maternity store probably won’t do very well between a gun range and a tackle shop. An antiques shop might not survive on the same street as a computer store and an electronics store. These are obvious examples, but consider the smaller differences between your demographic and those of neighboring stores as well. For example, a bookstore, gourmet foods store and toy store may seem like very different types of stores, but they may well coexist in a single shopping district because the items they sell are all often used as gifts. If you own a video rental shop and are considering moving to the area, you might reconsider, as video rentals are most decidedly not gifts.
3. Check out your competition. As with choosing a new city, checking out the competition in any given area of a city or particular shopping center can be an important consideration. If there are many similar stores nearby that offer the same goods as yours, you might have a tough time convincing consumers that your new shop is where they should spend their money.
4. How easy is it for consumers to get to you? Is the street where you’re considering locating your business easy to access? Is it a one-way street in a confusing area, where consumers might give up trying to find your location? Is there ample parking nearby? The easier it is for potential customers to get to you, the more likely they are to turn into actual customers.
5. Consider the traffic count. Doing a traffic count of several different locations may seem like a big time commitment, but the data you gain could prove invaluable. First consider whether you want to count every person who goes by, or only a particular demographic. If you own a women’s clothing store, for instance, you may choose to count only females passing by who appear to be in the age bracket you target. Then compare your potential customers after a day of counting between the locations you’re considering.
6. Consider operating expenses. Rent may be significantly higher in one area you’re considering than in others. If you decide to rent in the more expensive area, will your increased sales volume make up for it, or will you be selling the same amount but paying more per month for the space? Will different amounts of shrinkage in different areas make a difference? If you rent a larger space, will you have to hire an additional employee or employees? Carefully consider the cost-benefit of each location before making a decision.
About the Author
Valerie Cecil is a research coordinator, marketing specialist and writer for Outbounding.com. Her work allows her to investigate many topics, ranging from online consumer relations to effective communication in the workplace. When she is not working, she enjoys kayaking, watercolor, and scouting out the cutest Gift Boxes From Retail Packaging she can find.