Daniel Djain from Creative Property Services has been advising the Retail sector for many years. Frequently he is searching for new sites for large retail operators and has learnt that wherever you establish your new shop/store there is no room for improvisation.
Daniel shared his knowledge on his blog which we found very helpful and want to share with you, our retail clients.
There are 5 mistakes that must be avoided when it comes to finding a suitable location:
- Not doing your homework/research.
- Not knowing who your customers are.
- Not knowing your competitors in the area.
- Not being able to afford the rental or not being able to sustain it.
- No idea how many people actually walk past the prospective location.
New Zealand is a tough environment to be involved in Retail mainly because of the lower density/demographics which force operators to find and encourage prospective customers to shop at their store from further afield. As an example, in Madrid (Spain), where I worked for several years, every time I looked at possible new premises I based my demographics studies on a 500 meter radius around the prospective location. In New Zealand I look at it more in kilometers as the population density is more spread out.
Therefore doing your research and of course being patient (taking your time) is crucial.
Here are some basic points to remember:
- Your aim is to sell your products so you must know who your target customers are.
- Research your location’s area of influence in terms of competition, income levels, and age groups. (Statistics New Zealand are a good source of information)
- Carry out a people count at the front of your location on different days and at different times of the day.
- Can customers park easily?
- Can goods be delivered easily into the shop?
- Can the location be easily found/seen?
- Are there any large Retail operators nearby? (They normally act as anchors and can attract a large number of customers which could also feed into your location).
- If your location is not a “prime” location and is considered a secondary one, then you will probably have to allocate more marketing funds to promote your business.
- Make sure you know what size shop/store you are looking for, can you fit in all of your range of products? Do you have sufficient storage space? Office space?
A badly selected location can mean that from the beginning you will be struggling to make ends meet and might make you lose control of you main objective which is selling your products and offering your customers a great experience. Remember when you trade from a physical location you will also be competing against online shoppers who you will need to be encouraged to actually come to your shop.
Please remember to do your homework and detailed research before committing to a lease as this will help you avoid unpleasant surprises along the way.