How to Find the Best Location for Your Store

A retail consultant was asked, "What are the three factors most likely to ensure retailing success?" The reply was, "(1) Retail Locations, (2) Retail Locations, and (3) Retail location."

In other words, the impact of retail store locations and choosing retail location on the success of your store operation can't be overstressed! This guide is aimed at just one aspect of how to determine the proper site, namely, research into the traffic in that area - both vehicular and pedestrian - that will bring business into your store. Methods of taking a traffic count are discussed along with how to evaluate and interpret the collected data.

Importance of a Good Retail Location

Often an owner-manager, for whatever reason, is faced with renewing the lease or choosing a new or perhaps an additional site for business. At this crucial time the owner should consider the value of a traffic count to be sure the new location can draw customers into the store.

In the central business district, land values and rents are often based on traffic counts. The site in the central business district that produces the highest traffic count with regard to the type of traffic desired by a particular store is considered its 100 percent location. However, a 100 percent location for one type of store may not be 100 percent for other types. For example, a site which rates 100 percent for a drugstore may be only 80 percent for a men's clothing shop or 60 percent for an appliance store.

In recent years, for most lines of trade, the average store size has increased. This, of course, means greater financial outlay for a good location plus greater investment in inventory, fixtures, and personnel. Did you know that firms which conduct location research generally eliminate about four out of every five locations studied?

Factors to be Considered in Choosing Retail Locations

Three factors confront you as an owner-manager in choosing a location: selection of a city; choice of an area or type of location within a city; and identification of a specific site.

If you are going to relocate in another city, naturally you consider the following factors:

Size of the city's trading area.

Population and population trends in the trading area.

Total purchasing power and the distribution of the purchasing power.

Total retail trade potential for different lines of trade.

Number, size, and quality of competition.

Progressiveness of competition.

In choosing an area or type of location within a city you evaluate factors such as:

Customer attraction power of the particular store and the shopping district.

Quantitative and qualitative nature of competitive stores.

Availability of access routes to the stores.

Nature of zoning regulations.

Direction of the area expansion.

General appearance of the area.

Pinpointing the specific site is particularly important. In central and secondary business districts, small stores depend upon the traffic created by large stores. Large stores in turn depend on attracting customers from the existing flow of traffic. (However, where sales depend on nearby residents, selecting the trading area is more important than picking the specific site.) Obviously, you want to know about the following factors when choosing a specific site:

Adequacy and potential passing the site.

Ability of the site to intercept traffic en route from one place to another.

Complementary nature of the adjacent stores.

Adequacy of parking.

Vulnerability of the site to unfriendly competition.

Cost of the site.

How to Make a Traffic Count

First of all, be sure you need a traffic count. Although knowledge of the volume and character of passing traffic is always useful, in certain cases a traffic survey may not really make an difference. Other selection factors involved may be so significant that the outcome of a traffic study will have relatively little bearing on your decision. When the other selection factors, such as parking, operating costs, or location of competitors, become less important and data on traffic flow becomes dominant, then a counts is indicated. Once you have determined that you really need a traffic count, the general objective is to count the passing traffic - both pedestrian and vehicular - that would constitute potential customers who would probably be attracted into your type of store. To evaluate the traffic available to competitors, you may desire to conduct traffic counts at their sites, too.

Data from a traffic count should not only show how many people pass by but generally indicate what kinds of people they are. Analysis of the characteristics of the passing traffic often reveals patterns and variations not readily apparent from casual observation.

For counting purposes, the passing traffic is divided into different classifications according to the characteristics of the customers who would patronize your type of business. Whereas a drugstore is interested in the total volume of passing traffic, a men's clothing store is obviously more concerned with the amount of male traffic, especially men between the ages of sixteen and sixty-five.

It is also important to classify passing traffic by its reasons for passing. A woman on the way to a beauty salon is probably poor prospect for a drugstore. The hours at which individuals go by are often an indication of their purpose. In the early morning hours people are generally on their way to work. In the late afternoon these same people are usually going home from work. When one chain organization estimates the number of potential women customers passing a site between 10 a.m and 5 p.m. to be the serious shoppers.

Evaluation of the financial bracket of passersby is also significant. Out of 100 women passing a prospective location for an exclusive dress shop, only ten may appear to have the income to patronize the shop. Of course, the greater your experience in a particular retail trade, the more accurately you can estimate the number of your potential customers. To determine what proportion of the passing traffic represents your potential shoppers, some of the pedestrians should be interviewed about the origin of their trip, their destination, and the stores in which they plan to shop. This sort of information can provide you with a better estimate of the number of potential customers.

In summary, the qualitative information gathered about the passing traffic should include counting the individuals who seem to possess the characteristics appropriate to the desired clientele, judging their reasons for using that route, and calculating their ability to buy.

Once you have decided what type of business you want to start and The investment requirements, you're prepared to decide on a
location. The amount of competitive companies already in the region should affect your choice of location. Many areas are
bombarded with support channels or certain forms of restaurants. Check on the amount of your kind of business in Census figures,
the yellow pages, or by checking out the location.

Factors Aside from the potential market, availability of employees And number of aggressive businesses have to be considered in
choosing a place. For example, how adequate are utilities - sewer, water, electricity, gas? Parking facilities? Police and fire
protection? What about home and environmental things like schools, cultural and community actions for workers? What's the normal
price of the place in taxes and rents? Check on zoning regulations. Assess the business of the neighborhood business-people, the
aggressiveness of civic associations. In short, what is the town soul? Such aspects should give you a clue to the city or city's
future.

Chambers of Commerce and nearby universities usually have created or Are familiar with local surveys which may provide answers to
these questions and the a number of other questions which will happen to you.

Next you must decide in what area of town to locate. If the city is Very small and you're establishing retail or service business,
there will most likely be little choice. Just one shopping area exists. Cities have outlying shopping facilities along with the
central dining area, and shops spring up along principal thoroughfares and neighborhood streets.

Think about the shopping centre. It is different from other locations. The shopping centre building is pre-planned as a
merchandising unit. The website has been intentionally selected by a programmer. On-site parking is a common feature. Clients may
drive , park and do their shopping in relative safety and speed. Some centers provide weather protection. Such conveniences make
the shopping center an advantageous site.

There are also some limitations you should know about. As a tenant, You become part of a merchant team and has to cover your pro
rata share of their budget. You must keep store hourslight your windows, and place your signals according to established rules.
Many communities have restrictions on signs and the middle management may have additional limitations. Moreover, if you're
considering a shopping center for your first store you could have an extra problem. Developers and owners of shopping facilities
start looking for successful retailers.

The kind and variety of merchandise that you carry helps determine the Type of purchasing place you choose. For instance, clothing
shops, jewelry shops and department stores are more likely to be successful in shopping districts. On the other hand, grocery
stores, drug stores, filling stations, and bakeries do better on principal thoroughfares and neighborhood streets outside the
shopping districts. Some kinds of stores customarily pay a very low rent per square foot, while others pay a high rent. In
the"low" class are furniture, grocery stores and hardware stores. At the"large" are cigar, medication, women's furnishings, and
department stores. There's no hard and fast rule, but it's helpful to observe in which type of place a shop like yours most often
seems to flourish.

After deciding an area best suited to your type of business, Obtain as many details as possible about it. Check the competition.
How many similar businesses are located nearby? What exactly does their sales volume appear to be? If you're establishing a store
or service transaction, how far do people come to exchange in the region? Are the visitors patterns positive? If the majority of
your clients will be local inhabitants, study the population trends of the area. Is population climbing, static or decreasing? Are
the people native-born, blended or mostly foreign? Are fresh cultural groups coming in? Are they predominantly laborers, clerks,
executives or retired men? Are they all ages or mostly retired, middle aged, or young? Judge purchasing power by assessing average
home rental, typical real estate taxes, number of phones, number of automobiles and, even if the figure can be obtained, per
capita income. Bigger shopping centers have this type of information available, and will ensure it is accessible to serious
prospective tenants.

Zoning ordinances, parking availability, transport facilities And natural barriers - such as hills and bridges - are important
considerations in finding any kinds of business. Potential sources for this information are Chambers of Commerce, trade
associations, property companies, local newspapers, banks, city officials, neighborhood retailers and private observation. In the
event the Bureau of the Census has developed census tract data to the particular area in which you are interested you'll find this
especially helpful. A census tract is a small, permanently recognized, geographical area within a large city and its environs. The
Census Bureau provides population and housing characteristics for every tumor. This information can be valuable in measuring your
market or service potential.

Choosing the actual site in a area might well be accepting what you Can get. Very few buildings or plants will be appropriate and
in the exact same time, available. Should you have an option, be sure to weigh the chances carefully.

For a manufacturing plant, think about the condition and suitability Of the building, transportation, parking facilities, and the
sort of lease. For A store or service establishment, assess out the closest competition, traffic Flow, parking facilities, street
location, physical facets of the construction, Kind of lease and price, and the speed, cost and quality of transport. Also
Investigate the history of the website. Find answers to these questions as: Has the Building remained empty for any length of
time? Why? Have various types of Stores occupied it for brief periods? It might have proved unprofitable for them. Websites where
many enterprises have failed ought to be avoided. Vacant buildings Do not bring traffic and are usually regarded as poor
neighbors, so check on nearby unoccupied buildings.