Retail a Go Go - Tools for Retail Success

Choosing the Right Retail Store Location

Location is difficult and expensive to decide, but the payoff is huge. Once decided upon, it is difficult to change. You know what they say, “Location, Location, Location”. Because of all the criteria that go in to location selection, it is sometimes difficult to choose where to commit. We are going to go over a few of the factors contained in the decision making process for your store location.

The future of your business may depend largely on where you locate your store. You first have to identify and evaluate your target trading area. A trading area contains potential customers. Will they travel the necessary distance to get to you? Are you locating your store near a competitor or are you targeting an unfulfilled niche? Do a full SWOT analysis on each targeted site and organize the info so that you can easily compare the traits of each potential site. If possible, quantify each part of this analysis into a dollar value, because ultimately that is exactly what it will mean. Here are a few factors you might consider in choosing a retail store location: competition, employees, supplier logistics, zoning, customer transportation, income of customers.

Decide if your retail store will be part of a larger outlet with surrounding stores such as a shopping center or natural formation of stores or if your store will be alone. If you are going to be located near other stores, you may want to pick a site where you can cooperate with retailers nearby and benefit from their traffic while providing a quality presence for them. Once you have narrowed down the basic geographic area and the type of site, it’s time to decide specific placement.

Do you sell luxury items that take a large time investment or do you sell convenience based items that customers need to get in and out with? Your product selection may have an influence on your location. One strategy that many retailers have taken is partnering up with other retailers or destinations to take advantage of existing traffic, for instance, an airport or hospital.

Figure out how much it will cost to run the business from your targeted locations. Are you leasing or buying? Run budget scenarios for each location. An older location may have higher maintenance costs.

Based on your analysis, you should have a better idea of your target location, potential traffic, and potential costs involved in its selection.