The Retail Journey. Location Location Location!
One of the very first things that every to-be-retailer needs to consider is location depending on what product or service it is that they want to sell. Location can make or break a business as it can have a huge impact on the revenue and even the cost to run the business.
Finding the right business location is an interesting first challenge because the ideal location would be right next to your customers of course. This is ideal because it reduces business risk by guaranteeing a certain amount of customers. Now you may question the practicality of such a location but it can be practical. Take pharmacies for example, specifically the ones that are located next to a hospital or a medical centre. Yes, they have done very well in locating themselves right next to their ideal customers. And these guys are not exceptions either, there are many other examples of this such as laundries in hotels, taxis at airports, food courts in shopping malls to name a few.
Now obviously locating your stores where your customers are isn’t always feasible. For example not all laundromats can be located inside hotels. So then how do we determine the best location?
1. Figure out who your customers are and what they really want
Yep, that’s your first step, figure out who your customers are. Are they looking for a quick coffee in the morning or perhaps house wives who like to catch up for brunch during the day? All this should be part of your business plan and can help you determine the city and maybe even the suburbs that might suit your business. Get in touch with your local Chamber of Commerce for a business plan template. If they don’t have one, you can even check with your bank. The business plan can help you validate your business idea, discover your market, your customers, your competitors and figure out if all the numbers add up.
2. The Shortlist
Now that you know what suburbs to target, it’s time to create a shortlist of potential locations. Besides the obvious cost of the site and competition, you will want to concentrate on everything that impacts the traffic flow to the potential retail locations. Here are some things to consider:
Leasing or rental costs
Competition in the area
Potential impact of new developments in and around the area (e.g. new school, train station, mall, suburban extensions)
Flow of traffic to the store and in the surrounding areas
Anchor stores nearby that could compliment your store
Store visibility and accessibility
Signage and its visibility (e.g. billboard to advertise your presence)
Lighting and security at night
Pre-existing fixtures (if any required)
Local attractions (e.g. public swimming pools, night markets, parks)
Okay, so now you have a business plan, a good understanding of the target customers and a shortlist of potential store locations. The last thing on your list should be to validate all your assumptions before signing a lease or purchasing the property. Here are some tools you can use to help validate:
Socialise: Go talk to the local complimentary shop owners in the area and get their opinion. They might even be able to help you validate some of the assumptions you’ve made about the area.
Census records: These usually include demographic information you can use.
Google Trends: This free tool can give you an idea of what people are searching for and where.
Twitter / Instagram: Depending on the business and demographics, you could also look at the local public social media posts to better understand what the local sentiment is and what the local shopping experiences are like.
Mentor: Sometimes your local council or the chamber of commerce will provide mentors with varying backgrounds. Mentors can provide guidance and valuable feedback based on experience.
Sophic Analytics: The thing you want to ultimately figure out is how much traffic, foot or vehicle, you can garner. This will have a big impact on the success of your business. Sophic can install a device at the site and give you minute by minute traffic count, 24 hours a day, 7 days a week. This data can be used to validate most assumptions and even figure out things like operating hours, possible staffing requirements and so forth.
The retail journey can be very exciting and rewarding if you do your homework correctly. Best of luck 🙂