Choosing the Right Location for Your Retail Store
Photo by Tania Miron on Unsplash
If there is one thing that business owners need to get correct for their brick and mortar stores is the location. As urban markets continue growing and choices for retail business space diversifying, it proves difficult for store owners to find the right location. Unless you have a good structure or framework to help you identify where you will locate your business, you may easily get lost amidst the options.
When looking for a location to set up your new store, you will have many questions to answer;
Should you go for a less expensive location that’s far from the traffic nodes? Should you choose a suburban development that is driven by a major tenant such as a grocery store? Or should you choose a professional building located in an up-and-coming neighbourhood?
Know your Product, Know your Customer
A business needs to know its customers and its product. You should know who you will sell to what are their buying patterns? Failure to understand your customer holds you back in making an educated decision regarding where to locate your business.
Knowing your customer means knowing your product. You probably know who you target to sell your product – for example, if it’s a store selling wholesale homewares and gifts, and premium artwork, you will be targeting homeowners. Once you know who you will sell to and how the customer will buy your product, it’s easier for you to identify a suitable location.
Business exposure or Destination
When you know the kind of customers you target to buy your product, you can identify whether your store is going to rely on exposure or it will rely on a customer destination. If your target customers tend to be impulse buyers and acquire products from sales and promotions, it is likely that you will need a location that’s able to offer exposure.
If you have unique products that can draw people from far or engage them to your online store, then you don’t need to look for a high-exposure property open your business. For example, if you sell the best designer clothes in the city, people will come to your store from all corners of the city. If this is the case, you don’t need to worry about situating your store within a high-exposure or high traffic area. This is because your product is differentiated or unique.
Photo by Jason Briscoe on Unsplash
Destination businesses tend to be unique or high-end products not likely to be found elsewhere. Also, they could be strong brands and the first to open in the area. That being said, destination businesses also benefit from high traffic exposure – people may buy jewellery because they saw it as they were walking by a jewellery store – this is an element of impulse buying.
Nearby Competition
You need to look at other retail stores in the area you want to set up your business. Try to analyse your competition and get the best wholesale distributor, because being closer to businesses or brands like yours can help determine the types of customers that come to the area.
Think of it this way; a developer may decide to build a mall and identifies the businesses to be set up in the mall – say, a grocery store, a fast-food chain, a pharmacy, and a bank. Since the merchandising plan of the developer shows that only one pharmacy can survive in the mall, if you approach them wanting to open a second pharmacy in the building, they will turn you down. They won’t let you put up a second pharmacy there.
There are stores that benefit from the competition. You may have seen the same businesses operating in the same building – they are clustered in one place. People know that a particular area has many similar businesses. For example, you may have a mall that features different boutiques – they are located neck to neck, and they do run effectively. This is because customers know that if they want to buy clothing, they need to head to that mall where they can visit different boutique stores. The competing stores attract many customers to the area.
On the other hand, some businesses tend to suffer from competition. If you open a business in an area where already there is a strong brand that controls the market, you may not get customers for your business. Unless your product offers a unique advantage to the customer, it may not survive – the stronger brand takes away all the customers. In such a case, you would be better off if you find an area that is underserved – an area far from the competition.
In urban centres, you may have different demographics in the communities. Knowing the population that’s within 3 to 5 km in an area can help determine whether to set up a business there or not. Also, the average household income for the people in the surrounding neighbourhoods may play a part. Besides, the traffic flow from the adjacent road may provide an insight into the suitability of the location to put up a business.
A good store location needs to offer the business a competitive edge to find and attract the right customers. It depends on various factors that the business owner needs to consider. When you access these factors one after another, and you put the information together, you will be able to find a location that allows your business to grow.
Opening a new homeware business in the perfect location? Contact our customer service team today to get you up and running with your stock.
