When you are seeking to make your ‘entrepreneurial debut’ with a retail shop, the first important decision to make would be choosing the location of your shop.
You could either opt for something that is in the middle of a bustling city, which will have expensive rent or, select a location that is in the suburbs and would not be so heavy on the pocket.
However, it must be noted that you would have to spend considerably on advertising when it comes to a retail shop in the suburbs, vis-à-vis a shop in the city which would have comparatively more visibility. The other crucial deciding factor in the location of your retail shop is the presence of target customers.
Here are some detailed tips on what locational factors should be taken into account before opening a retail shop.
Locational Factors You Should Consider While Opening A Retail Shop
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1. The Products You Wish To Retail/Type Of Store
Before deciding on your location, it is important to gain clarity on the products that you wish to sell and the kind of store you wish to establish.
It could be anything from a small kiosk to a convenience store, a specialty store or a big-ticket store. Hence, if you are keen on selling convenience items, then a small kiosk located inside a shopping mall would not be a great location choice in terms of accessibility and price.
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On the other hand, the optimal location for convenience stores is usually on the way to commute for a customer, as shopping at such places becomes a convenient activity. On the other hand, a specialty shop usually has curated, high-priced goods that do not feature on regular shopping lists of customers. For such shops, the best location would be someplace that would place them away from their competitors, so that comparisons are not made.
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2. The Area Should Be Close To Potential Customers
It is important to choose a location that is inhabited by the right age bracket of people who can invest or purchase the goods you sell at your retail shop.
A good way to understand this would be to conduct a thorough survey or research of the area and assess the type of businesses and shops around your proposed location.
Scale your business online presence as if somebody search for Kirana store near me or best retail shop near me than your shop will appear on the top.
Get an idea of the demographics and the average incomes. This is most important if you are out to open a specialty or a big-ticket retail shop with luxury goods.
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3. Check The Rental Cost Of Retail Store
If your retail store is selling luxury products that require a niche customer base, then it would be prudent to open a shop in an upper-class, elite location. The rent would be obviously higher, but it can be set off by the fact that you are in the middle of your target customers and would potentially do great business.
Take into account all location-related expenses when selecting a retail store location, encompassing fundamental costs like:
- Determining responsibility for grass maintenance and security.
- Clarifying responsibility for the upkeep and repair of heating and air conditioning units.
- Assessing whether any modifications or painting are necessary to tailor the space to your specific requirements.
- Establishing whether the retailer will bear the responsibility for real estate taxes.
4. Visibility and Accessibility of Your Retail Shop
For retailers, the ideal location is in the middle of their target customers. However, there are various factors that should be considered nonetheless.
Firstly, check to see if the area is accessible to those taking public transportation or if there is enough car parking available. Visibility of the retail shop is equally important as it ensures a steady flow of customers and reduces the need for expensive advertising.
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5. Availability of Workforce
It is important for you to opt for a location which is accessible to prospective employees of your shop. Check to see if the shop is at a proximate distance to essential services like hospitals, restaurants, schools etc.
6. Keep a Distance From Competitors and Locate Near Aligned Shops
Zeroing in on a location that is teeming with competitors is not a good idea, especially for speciality stores, as it tends to hurt the business.
Rather, ensure that your shop is located near shops that attract a similar customer demographic as it will be more beneficial. An example to highlight would be a high-end furniture shop located near a designer upholstery store.
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7. Personal Reasons
The best location for your retail shop should be one that is close to your home, as the comfortable commute time will help you maintain a healthy work-life balance.
The perfect choice for your location would depend on all these factors and any wrong selection could be detrimental to the success and growth of your business.
Indifi is the answer if you are looking for the best solution for finding the perfect location for your retail shop.
8. Location of Raw Material
When selecting the optimal location for your retail store, it’s crucial to exercise additional caution. Compile a checklist highlighting distinctive aspects of your company that require attention, including:
- Does the store require specific lighting, fixtures, or other hardware?
- Are there restroom facilities available for both employees and customers?
- Is the neighborhood adequately safeguarded by fire and police services?
- Are sanitation services readily accessible?
- Does the building have a canopy to offer shelter during rainy weather?
- Are there any restrictions on Sunday sales that need consideration?
Types of Retail Store Locations
1 Business parks
A business park is an area where businesses often have their headquarters. Some business parks also have factories and warehouses. These places can be great for growing your retail business.
Pros of Business Parks
- Plenty of Parking: There is usually a lot of parking space because employees of the businesses drive to work, so customers can easily find a spot to park.
- Lots of Space: The units in a business park are generally larger than those in busy shopping centers. This means more room for storage, creative store layouts, and unique shopping experiences.
- Business Connections: Being surrounded by other businesses allows you to build relationships with nearby business owners, which can help you grow your own business.
Cons of Business Parks
- Location: They are often in semi-residential areas, so customers might have to go out of their way to visit your store.
- Low Foot Traffic: The number of people passing by depends on the types of businesses in the park. If there are mostly offices or factories, only the workers will be around.
- Limited Public Transport: Public transportation is less likely to go to business parks because most employees drive to work.
2 Shopping Mall
A shopping mall is a big place where people come to shop. These malls have many stores, from large chain retailers to small independent shops, all in one location.
Pros of Having a Store in a Mall:
- Lots of Visitors: Your business can be seen by thousands of people every week without needing a lot of advertising.
- Shared Marketing: Mall owners promote the stores inside to attract more visitors.
- Security: Malls usually have 24/7 security to protect the valuable items inside.
Cons of Having a Store in a Mall:
- High Rent: Renting space in a mall can be very expensive due to the high exposure.
- Tough Competition: Big malls have many stores, including your competitors, all fighting for the same customers.
- Inconvenient for Quick Visits: If someone only wants to visit your store, they might find it bothersome to navigate a busy mall.
3 Brick-and-mortar retail
Brick-and-mortar retail is the traditional way of having a physical store where customers can visit and shop in person. These stores, also called freestanding or anchor stores, are used by businesses to directly connect with customers.
Pros of brick-and-mortar stores:
- Cheaper rent: These stores often have lower rent compared to busy shopping malls because they aren’t located in high-traffic areas.
- Accessibility: They can be found out of town but still on main roads, near public transport, and with cheaper parking, making them easy to reach.
- Customer preference: Many people still prefer shopping in physical stores, with 67% of surveyed consumers doing most of their shopping in-store.
Cons of brick-and-mortar stores:
- Zoning rules: Local governments often have rules about how buildings can be used, so it might be hard to get approval to open a retail shop in a residential area.
- Lack of foot traffic: These stores might not naturally attract a lot of visitors, so you’ll need to invest in local marketing, advertising, and signs to bring in customers.
FAQ
How to choose a retail location?
- Research the area: Find out about the neighborhood and its potential customers.
- Consider visibility: Make sure the store can be easily seen by people passing by.
- Analyze the rental cost: Check if the rent is affordable and fits your budget.
- Look for amenities: See if there are nearby facilities that attract customers, like parking or public transport.
- Consider the future: Think about how the area might change and grow over time.