The methodology behind the retail store selection

The position of a retail store can make or break its success. For anyone considering embarking on a retail venture, or for existing retailers looking for a new site – where do you start in your search for the perfect space?

Here are the key areas to think about:

Macro-economics 

What are the current economic trends in the retail sector in general and what’s the broad economic profile of the area you’re considering? You need to consider the profile of the community. Is it already well-established or is there an opportunity for population growth due to housing developments in the area? Don’t just think about what’s there now, think about how this could change over the years and the opportunities and challenges that presents.

Demographics

Consider the demographic data of that community. Do they match your potential customer-base? Demographic profiles obviously include things like age, ethnicity and income, but it’s also worth thinking about demographics in terms of ‘life cycles’ – as this is one of the biggest indicators of likely shopping habits.

Now, look more closely at the position of the store within that community.

The middle macro mindset

Local shopping center or a street shop? It is all about the potential footfall from existing shoppers in the area, therefore, take a closer look at the surroundings. What other stores are close by? What mindset will shoppers be in when they’re in the area? Are the surrounding shops large (or larger) retail chains or smaller shops? What does that mean for you?

Being surrounded by retailers that complement your products will increase the chances of footfall: For example, a bakery shop owner knows that being close to other ‘daily needs’ food retailers boosts his sales – shoppers will wander from the butcher, to the fishmonger to the bakery and the fruit-and-vegetables shop to stock up for the week. On the other hand, if the shopping area is more fashion focused, even if there are thousands of potential customers per day, they aren’t likely to be in the right mindset to buy products from a bakery and an accessories store, for example, would have much more success here.

The micro matters

The micro detail matters. Take a shopping centre, for example: the level the store is on, its proximity to an entrance, whether the centre’s architecture is linear or curved all have an impact on how many people pass by or walk in. For example, in a curved shopping centre more people tend to walk on the inside not the outside of a curve. While shoppers themselves may not even realise they do this – there is a pattern to how they walk around and shop. A difference of 10 meters can make a huge difference. Discuss with existing retailers in the area and learn from their experience. Try spending a few hours studying the shoppers in the area yourself and consider how things change at different times of day and on different days of the week.

In theory, there are no unlucky shops. Just retailers who haven’t done their research!

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