Published On Dec 05, 2022
in Retail Real Estate Industry
Finding the perfect retail space to lease can be a daunting undertaking. There are many questions: where are the good markets, how much space do I need, and how long will it take to open?
These are all valid concerns you may have. Leasing specialists at Phillips Edison & Company (“PECO”) have created this brief guide to help you find the perfect retail space that suits your business. Below we discuss 4 important points you should consider:
- Identify Your Target Audience
To choose the perfect retail space for your business, decide who your target audience is. Are you a high-end salon selling niche hair care products? An area with a higher income may suit your business needs. Or do you sell a variety of items and home goods at an affordable rate? Then possibly, an area with younger, lower-income residents is perfect for you.
The perfect retail space is different for everyone based on the demographics you want to target. Your leasing specialist or broker should be able to provide demographics for any space you consider and help you determine if the area meets your needs.
- Scope Out Nearby Competitors & Complementary Businesses
When searching for the perfect retail space, pay attention to where your competitors are. If you are opening a cell phone store, your perfect retail space may not be next to another cell phone store – but it may be next to another complementary technology store.
Not only do you want your retail business to be the most desirable in the area, but it is also important to identify any complementary businesses and where they may be. If you specialize in accessories, you may want to be located close to a clothing or shoe store.
Or if you sell hair care, maybe you want to be close to a salon.
- Find Pre-Existing Infrastructure
One of the easiest ways to bring customers into your store is good window visibility. When looking for your perfect retail space, window real estate is something that should be a priority. What displays, merchandise or signage will you use in your windows to draw in your customers? This is an opportunity for free advertising and brand exposure, especially if you are positioned in a grocery-anchored shopping center that sees thousands of shoppers daily.
Another critical thing to look for when scoping out your perfect retail space is storage. Depending on your business model, you may need a loading dock and backroom area for overflow products, new shipments, offices, etc.
Finding a space with this pre-existing infrastructure will save you time and money when opening your retail business.
- Ensure You Have Good Exposure
The easiest way to guarantee a successful business is exposure and foot traffic. When it comes to the perfect retail space, being in a shopping center with a wide range of neighbors can aid in attracting customers.
We see consistently high foot traffic at Phillips Edison & Company’s grocery-anchored shopping centers; everyone has to grocery shop! Positioning your new retail space in a grocery-anchored center will ensure exposure to the existing demographics of the area, resulting in customers and profitability.
When you find a desirable location(s), go to the center, check out the ingress/egress, talk to existing tenants and look at the traffic at different times of the day. This is a big investment you are making, so make sure you are investing the time in doing your due diligence. Still have questions? Here are some of the most common ones we hear:
What is the first thing that I should do when opening a new business?
Prepare a business plan. Then map out your strategy to find the perfect location. You can use online data for some things but multiple visits to the center(s) that you are looking at will provide you with a necessary firsthand look and review.
How do I figure out what my target audience is?
If you have an online business, review your customer base and their demographics. If you don’t know anything about them, offer an incentive for them to complete a survey. A lot of customers are willing to share intel about their favorite products.
People always say location – location – location but I’m still confused…
A good location is dependent on the type of business you have. For example, some businesses may need a high-traffic location, but if you’re a destination service or product, you could go with a location with less visibility since your customers will seek you out. The important thing is to know your product, your customer and your strategy/business plan. If your customer will visit you on the way home from work and on weekends, has ample disposable income and will seek you out, those are three important facts to help you choose a location. You’ll want to have easy access on the way home for most people’s work commute, you’ll want a high-income area and visibility won’t be as important to you because you are a destination location. Your broker or your PECO leasing agent can help you with all of this!