Consider what makes a prime location for your retail operation

Today’s omnichannel environment means your store may already have a prime spot no matter its physical setting

Location! Location! Location? 

Location is vital, but in this new era of omnichannel, location is a bit less important than it was a decade ago. If you are implementing a robust omnichannel brand, you already have some of the best locations, namely your customer’s desktop and cell phone. Since having these channels without a strong physical storefront limits your business and ministry, especially in select categories, this issue will focus on the brick-and-mortar location of your store. I apologize up front to the pure “e-tailers” reading this, but know that many of the basics that strong retailers need to master also can be translated to your online strategy.

Based on my 25 years of experience and hundreds of site selections and new store openings, here are the top criteria for successful physical store locations or relocations:

Target. I’m not referring to the “red” big-box retailer here; rather, I’m referring to the need to target the watering holes or neighborhoods where your customers cluster. 

The most successful retailers do extensive heat mapping (similar to a weather radar map) that shows by color where the majority of their targeted customers live. In the case of CBA-member retailers, tracking where evangelicals live is best. Layering on top of the evangelical presence the average household incomes give you a solid starting point for the location of your new or soon-to-be relocated store.

Convenience.Like it or not, the overwhelming majority of what we sell today is not a required commodity, but rather a luxury for our customers. This means that our customers are less likely to driver farther to shop with us. Gathering data on daily traffic count on the street in front of your new location can really help identify sites that are “along the way.” 

Ingress and egress is as important since if they cannot get into your center and get back on the road without fighting traffic, it is a less than optimal shopping
experience. 

Another element of convenience is parking and sidewalks. The general rule of thumb is that you need three parking spaces in front of your store for every 1,000 square feet of space you occupy. Likewise, especially with the aging of America, it is recommended that you avoid sites that have steps or a lack of ramps.

Adjacencies.Simply put, this means that once you have the two above criteria nailed, it’s time to look for a center that has other tenants that you know will help attract your targeted customer. Target, Walmart, Best Buy, PetSmart and a host of others fill this bill.

Visibility.Even the best center has a bad space in it. It is usually the one that is hidden in the corner, behind trees and without a high-visibility location for your sign. If you’re in a not-so-ideal location, look for creative ways to increase your visibility. Depending on your lease, you might be able to add more exterior signage on the back or side of the building. Another way to become more visible is to drive a vehicle—the larger the better—wrapped with your store’s logo.

Facilities, size and cost. Avoid locations with multiple entrances and levels. Make sure you have a convenient freight-delivery door. Remember that your occupancy costs will generally be your biggest investment behind cost of goods and labor. As such, you must be willing to maximize your sales per square foot and minimize your total cost of occupancy. This cannot be emphasized enough. If you are paying more than 10% of sales for fully loaded rent, you will not have the funds you need to promote your store to drive traffic and then staff it to provide great customer service once the consumer gets there. Be aware of all the add-ons like common area maintenance (CAM), insurance and taxes that rental agents will try to load onto your plate. Retail is detail, and leases are chock-full of details you cannot afford to overlook.

Finding the perfect site that meets all of the above criteria can be an exhausting process and may take several months or longer in some markets. Many business owners benefit from the help of a firm that has expertise in this area. Unless you have successfully negotiated several leases in the past, you would be advised to hire a leasing expert to assist you. Generally they save you far more than they cost. Those that are skilled in the above areas are still wise to involve a real estate attorney to review all leases before they sign. 

Do your due diligence, be picky and negotiate wisely, and you’ll have a site that will serve your ministry and business well for many years. 

NEXT ISSUE: Learn some of the best ways to drive traffic to your brick-and-mortar store.