If you want to open a business and are faced with the enormous task of finding the best location, there are several factors you need to consider.
Location is one of the most important aspects that determine the success of a business, especially if the sale is open to the general public. In the retail world, potential customers are those who pass in front of the store, and regular customers are those who decide to keep visiting you.
It’s up to you to turn the first into the second.
In recent years, and with the rise of online retail, many physical stores have closed because they thought it was no longer worth the rent. Nothing could be more wrong, as it is estimated that by 2024, 72% of retail stores will still operate in physical stores. That’s why location is still everything.
The physical store has certain attributes you can not offer exclusively through a digital medium. That’s why we are giving you the crucial tips to place your store in the right location that will bring you the customers you need to skyrocket your sales.
Tips On How To Choose The Best Location For Your Retail Business
1. Make use of a good spatial analysis tool
The preferences of your customers determine the location of a business. It’s as simple as that.
In retail, speed is everything. With an automated spatial mapping tool, you can quickly assess market conditions for the stores you want to open, as well as existing stores
With advanced mapping and spatial analysis, you get all the necessary information and can use the data in real time to make site selection and market planning decisions. A good example of this is CARTO’s spatial data platform, which lets you:
- Combine demographic and geographic data with spatial analytics for accurate market planning
- Segment data on lifestyle and shopping habits to reach your best customers
- Identify underserved markets
- Quickly forecast your store’s performance to seize opportunities before they’re missed.
Reliable data gives you a clear picture of what your store needs and puts you on the path to choosing the best possible location.
2. Keep your competitors close
Tell me where your customers buy their favorite products, and I’ll tell you which way to go.
While it may be the first consideration to locate in an area where your business offering is unique and exclusive, and the target audience has no other options to choose from, it may not be the best decision.
Being surrounded by competing businesses isn’t always a bad thing, and in some cases, you should go by the motto, “If you can’t beat the enemy, join them.” Look at it as an opportunity to take advantage of the clientele that comes to your competitor’s other stores and dare to compete for side by side with them.
Especially for the “business to consumer” (B2C) business, this is a great opportunity because the customers of this type of business usually go to commercial areas, so they don’t have to drive too far.
This way, you become part of a draw for customers from all over the city you’re in, as is the case with the concentration of clothing stores in the center of many cities or with supermarkets and home goods stores near family areas.
3. Analyze traffic in the area
To determine if a store’s location is suitable, you must consider the traffic on the street where it’s located. Pay special attention to the quantity and ‘quality’ of people passing through the door of the future store.
Quantity of traffic
That’s the number of people walking through the street where you plan to locate the establishment. This is an important factor because if you build your store on a street where hardly any people pass by, it’ll be difficult to attract potential customers.
Analyze the number of passersby in the street on several days because the traffic volume can vary depending on the day of the week.
Quality of traffic
In addition to the number of people, it’s also important to know the quality of the passersby. That’s whether the passersby relate to your products and are potential buyers for your business.
In this case, if there’s a school or kindergarten nearby or a special gym for women in their 30s, many mothers will likely pass by. You’re on the right track if your niche sells products that make sense to them. That’s the right mindset.
Type of traffic
Another critical factor when looking at traffic is what the traffic looks like on the street. That’s whether it’s a place to walk, whether it’s a place to drive, whether it’s a thoroughfare for family walks, etc.
Ideally, it should be where people walk or stroll because that makes it more likely that passersby will see our store and take the time to do so. On the other hand, if it’s a place that gets a lot of traffic by car or public transportation, you should also check if there’s easily accessible free or paid parking.
It can be important to live in a busy area for obvious reasons; it’s very useful to choose a location that allows you to put a visible window (especially if it’s a commercial type). With a good display, they’re much more attractive.
On the other hand, if you provide a service that doesn’t depend on the access of customers (technical services, legal services, etc.), you don’t need to be in such a busy place; it’s more important to invest in visibility, for example through large billboards.
A big part of designing long-term marketing strategies is ensuring the location is consistent with your offer. This will allow you to save costs on-premises, as you can look for more favorable areas. Given the rise of the digital economy, many big brands are betting on this strategy.
4. Handle the legal and financial aspects of the opening
An important factor to consider is that the budget must be in line with your business plan so that rental costs can affect the feasibility of your project. Therefore, pay close attention to the opening conditions.
- Rental conditions and costs
- Extraordinary expenses
- Need for reforms and investments in the premises
- Flexibility in the contract to be able to leave the business if it’s not found to be viable
Also remember that to open a business in a physical space, you must comply with the legal requirements regarding opening licenses. Make sure you have professional support; opening a business is among the main reasons to hire a lawyer and not for less. It is necessary to have a light on everything legal.
Before you reserve the space for rent or purchase, you should ensure that the space is suitable for the activity you want to carry out and that all the works carried out have been legalized because if not, you may have to pay for the legalization.
Finally, please don’t decide to take on a facility until you’ve ensured that the services it offers are optimal for your project. What do we mean by that? Supplies.
Make sure that there are no problems with the installations, such as power supply or plumbing. And, of course, the Internet connection is of the best quality.
Best location, best results
As you can see, a good location for your business doesn’t only depend on a beautiful and lively area. There are several aspects you need to take into account to make your investment pay off. Therefore, don’t forget to:
- Use an automated spatial analysis system: this will give you all the geolocation data you need to find the best possible location
- Stay close to the competition: stop being afraid of failing in front of your competitors. Instead, use the path they’ve already traveled to find your star customers.
- Consider the traffic and accessibility of your store: analyze the quantity and quality of people around your store. The type of traffic not only depends on whether you’ll get a steady stream of customers but also informs how you’ll be able to showcase your products.
- Clarify the legal and financial aspects: everything related to rents, contracts, their clauses, and the costs of opening a business. If you dare to open a physical store, you’ll have to have a specific budget that must match what you’ll have to spend in the place you choose.
Physical and direct sales to consumers haven’t been eclipsed by the advent of e-commerce. On the contrary, it’s growing stronger and finding new ways to succeed. Want to be part of this wave? Follow our tips, and you’ll find the dream place for your project.