Since retail space costs an average of $20.85 per square foot, where you set up your store is important. Pick the wrong location and you risk being locked into a years-long lease, unable to generate significant foot traffic and consequently having store overheads crush profits. This Shopify guide looks at some retail location options and how to choose the best one for your business.
Retail of bricks and mortar
Traditional retail is the most traditional type of physical location. Also known as independent stores or anchors, it is a building used by retailers to connect with customers in their own facilities.
Advantages of physical stores:
- The rent is cheaper. Busy malls can charge a premium to retailers looking to take advantage of their existing foot traffic. Out-of-town owners don’t have that luxury, so rent can be less expensive.
- They are more accessible. Physical stores can be located outside the city but on a public road. Proximity to public transportation and less expensive parking can make these places more accessible.
- Some customers prefer them. Research shows that 27 percent of shoppers purchase holiday gifts from local independent stores, outnumbering traditional department stores or specialty merchants.
Cons of physical stores
- Zoning rules apply. City, town, or village governments often set zoning regulations on how buildings can be used in a given area.
- A building located within a residential area is unlikely to be approved as a retail store.
- Foot traffic can be a challenge. Expect to invest in local advertising and signage to guide potential customers to your store.
Business Parks
A business park can be used as a business headquarters. In some you will find industrial plants and warehouses. These units can be great for expanding your retail business.
Advantages of business parks:
- Parking is plentiful. Businesses located in a business park are likely to have their own employees driving to work, resulting in large parking lots that customers can use.
- Much space. A unit in a business park is usually larger than one you’ll find in a shopping mall. That leaves room for storage, creative designs, and experiential retail.
- You are surrounded by business people. Establish relationships with business owners in nearby units for support in growing your own.
Cons of business parks:
- They are usually built in semi-residential areas, so customers can go out of their way to visit your store.
- Foot traffic may be minimal. This largely depends on the other drives. If they are offices or industrial plants, for example, only the workers will go through the business park.
- Public transportation is unlikely to work there, as most employees commute by car.
home based
It takes a lot to find a retail location. If you’re still not sure which one is best for your business, consider setting up shop in a place you already have: your home.
Advantages of home retailing:
- It is much cheaper since you are not paying real estate leases or additional operating expenses. Additionally, small business owners who work from home can reduce their tax liability.
- it’s flexible Minimum Visitors means you have ultimate control over your “opening hours”.
Cons of Home Retail:
- Security can be an issue. You can’t get potential customers to stop by your home store if you’re reluctant to reveal your home address.
- Distractions come up quickly, especially if you work in a busy home.
- Climbing becomes difficult. Selling more inventory is great for business, but not great if your storage is starting to dominate your home. Some landlords prevent tenants from using their property as commercial space.
- The process of expanding your retail business is daunting. Whether you choose brick and mortar, a business park, or your home, use these tips to secure the best location for your next store. Remember: the goal is to better position your store to attract potential customers in the local community.
For more on this topic, visit: shopify.com/retail/retail-location
