When it’s time to expand your business and open a new store location, today’s uncertain retail environment might leave you with some questions. So far in 2018, there have been 3,600 store closures announced from brands like Target, Gap, and Walgreens, which is already half the number reported in all of 2017. Many factors contribute to a thriving retail store but the location is definitely among the most important. Here’s how to decide on where to open a new retail location.
Check about state and local incentives
State governments often offer tax incentives to encourage private sector investment in certain areas and kick-start economic development and job creation. Some states provide grants to expanding businesses, while others offer tax credits, loans, and other benefits.
Consult the state business incentives database from the International Trade Administration and the database provided by the Council for Community and Economic Research to search for programs in the regions you’re considering.
Review data on local real estate and demographics
Every region has its own distinct population, retail opportunities, and real estate costs to consider. That’s why it’s important to do as much research as possible when reviewing possible locations.
CBRE publishes reports on retail destinations to compare the major cities in a region based on the changes to their GDP per capita, retail sales growth, unemployment rate, and other demographic factors.
For example, Dallas is seeing 5.58% retail sales growth, whereas Houston is seeing a 4.90% increase in retail sales. These numbers highlight the growth of both markets, but reveal that there’s likely less competition in Houston at this time.
Match the location to your brand image
Think critically about how different locations will align with your brand by researching which landmarks and retailers are located nearby. Identify the key attributes of your retail brand and make sure these are reflected consistently. Choose the new location that will help you define and maintain the retail experience across each store.
Recent analysis from Deloitte found that more than 40% of customers were discouraged from shopping in-person because of long lines and too many crowds. This figure shows how important it is to get the customer experience right in every store.
Pay attention to local competitors
Opening a store near competitors may seem like a foolish decision, but if there’s enough demand, the proximity to others is unlikely to be much of an issue. In some respects, there are more risks involved if you enter a region with no competitors. You might hope to own the local market but it’s hard to succeed if there’s little demand for your products or services.
Here’s how to determine the level of retail competition in an area:
- Visit the site in-person to see which other stores are nearby
- Search online for information about the businesses in an area
- Reference research and data from third-party firms like CBRE
- Consider partnering with a site selection advisory firm to get access to proprietary data
Plan moving and storage logistics carefully
The logistics of storing and moving fixtures and inventory can quickly become costly when planning a new retail location. If the details of the project are not managed effectively, the store’s opening may even be delayed.
Here at PODS, we understand the challenges of opening a new retail store location and we’re waiting to streamline your logistics to make sure everything runs smoothly. With almost two decades’ worth of experience, our specialist team is ready to help.
Choosing the right location for a new store is always a big decision but with the right information and the support of market-leading partners, you’ll be able to select your new location with confidence.
To learn more about how PODS can help with moving and storage for your retail business, visit PODS for Business or call 877-BIZ-PODS for a free quote.