How to Pick a Retail Spot
A retail business can stand or fall depending on its location. Pick the right spot and you’re in the money; get it wrong and you can kiss your profits goodbye. So how do you pick your lucky locale?
Experts David Gray, principal of DIG360 Consulting Ltd.; Jim Smerdon, senior associate with Colliers International Realty Advisors Inc.; and Stephen Knight, president of Sitings Realty Ltd., share some insights into the mysterious art and science of location scouting.
Finesse your brand
Think about what a storefront says about your company and who needs to see it. “If you’re coming to Vancouver and if you want your concept to be hot and trendy, you put it on Robson Street to start and then you put it into the suburbs,” notes Knight. Many of the shops on Robson Street, according to Gray, are making marginal profits or possibly operating at a loss, but they’re getting “lift”: the shop on Robson improves profits at other locations because of the positive associations created in consumers’ minds.
Know your market
In a perfect world, customers would just come to you. In reality, you need to go to them. “You’ve got to figure out the attributes of your customer,” explains Knight. “Are they high-income, are they low-income, are they male, are they female? Your demographic will help you pick which trade areas you should service first.” If you have more than one store, poll your clientele and find out which areas of town they live in, suggests Gray. “Map out how far they’re coming to shop, and apply that to potential new sites.”
Seek out competition
Ever wonder why West Fourth Avenue and Arbutus Street is the yoga-wear capital of Vancouver? “Retailers who rely on the ability of the customer to comparison shop benefit from the co-location near competitors,” explains Smerdon. Your next-door competitor could be doing you a favour. Adds Gray, “People are going to shop back and forth anyway, and if you have sort of a critical cluster, you’re going to draw people from even further.”
According to Gray, the retail chain Bebe Stores Inc. (BEBE-Q) waited two years to get the perfect spot on Robson Street. “You could just destroy your business being in a bad location,” he warns. “A bad spot might well be Kits; it might be that you can’t do a left turn or there’s no parking.” So don’t rush into anything until you know it’s perfect, or close to it. Remember, all things come to those who wait.
Hit the streets
You’ve chosen a neighbourhood, but before you grab the first lease available, take a lesson from Magnum P.I. and do some spying. “If you’re savvy about it, you do a whole lot of looking,” says Gray. “You’d be in a car and do it, and then you’d be on foot. And you’d go weekends and weekdays, just to make sure there’s not a big traffic difference.” Find out which side is the busy side of the street, and check out where the parking is.