How to use locational intelligence to find the right spot for your retail business
Given that rent is usually the biggest single business operational expense faced by retailers, it follows that location is intrinsically important to making a retail operation successful.
The aptly-named “golden-mile” retail strips in New Zealand’s largest metropolitan centres have traditionally commanded the premium commercial rentals in the market thanks to their customer-attracting qualities, high foot traffic credentials and attention-grabbing profile opportunities.
But not all retailers can be located in these stretches of retail real estate. The key to securing a profitable location lies in being able to identify the fundamentals that contribute to customer engagement and ultimately, wallet-opening.
It has been shown that global coffee merchant Starbucks has the innate ability to attract other businesses to locations where they establish an outlet – they are retail leaders and evidence says that Starbucks knows the next hot neighbourhood before everybody else does.
You, too, can start thinking like Starbucks – albeit, on a smaller scale. Be savvy about keeping your nose to the ground and eyes to the front and side when scouting out a new location for your fledgling business to set-up – or for opening an additional branch or satellite operation for your existing business.
Council websites around New Zealand are a good place to start. Read up on draft annual plans, reports on development projections, look at statistics such as numbers of residential building permits issued in a particular area and keep up-to-date with city project timelines.
There are great clues to be found as to where populations are expanding, where new infrastructural links are being consolidated, where innovation is taking place at a commercial and community level and where developers are putting their resources.
Bookmark websites of proactive and respected developers in your market and see where they are putting their resources and energies. Follow with interest new supermarket locations/announcements – they will have done the hard yards in crunching demographics and undertaking retail feasibility research. The “big two” supermarket heavyweights invest significant dollars in the search for new locations. You can piggy-back on their research.
Cities like Auckland which have wide geographic spread are characterised by suburban retail precincts that draw on local populations for support. Not everyone wants to shop in the Queen Streets of this world so new neighbourhoods are ripe for retail opportunity. This is where Starbucks has succeeded globally.
Where apartment developments are pushing up vertically, there’s plenty of opportunity to be found on the ground floor retail zone where hospitality, service businesses and retail operations have a “captive” audience of potential customers to satisfy.
Visibility, affordability and lease terms that you can live with will always be the key factors to consider when identifying premises for a retail business, however locational clues are out there to give you an advantage and the smart retailers are doing just that.