Are you considering entering the retail space and wondering how major retail chains go about choosing locations for their business? The retail site selection process is systematic. Here‘s how major retail chains go about their site selection.

Target demographic

Heavy consumer traffic doesn’t always translate to a lot of customers for your brand. Retail chains know that the most important shoppers are the ones that meet the definition of their target market. So before site search and selection even begins, major retail chains have already defined their target demographic. And if they’re looking to enter a new market, they identify markets with potential. Knowing where your target market lives or works helps you identify and locate the geography most suited for your brand to set up shop.

Competitive presence

When checking the compatibility of their retail store in an area, major retail chains also analyze the competition. The retail chain will assess the level of competition and decide whether it is acceptable. Competition won’t always take the form of a rival brand that sells similar products. And some major retail chains can lose out to smaller specialty stores, particularly if those stores already enjoy prime locations that are highly visible with ease of traffic flow.

Accessibility and Visibility

While many of us are willing to go out of our way to find hole-in-the-wall restaurants and novelty shops tucked away in alleys, most major retail chains look for locations with the highest visibility and easiest access: the more people that walk by or drive past, the better. Ideally, the area should also be accessible to public transportation. Intersections can also add much needed visibility by controlling the traffic flow.

Retail space size and layout

Existing locations provide established retail chains with a wealth of data. Historical data and performance may reveal if the size and layout of an existing site helped with its success. Therefore, many major retail chains will rely on their existing locations to dictate the ideal retail space size and layout for their new site. Data may even reveal if it’s better if the retail chain’s new site should be smaller compared to the other sites or have a different layout.

Traffic Counts

Typically, higher traffic counts equate to higher potential business and new clients, as visibility is key to retailers trying to capture a segment of the market. Other factors to take into consideration is traffic flows and how it can affect your business. If a particular street has a “go to work” traffic flow, and a “coming from work” traffic flow, you may want to consider having your business on one particular side (ie: a Donut/Coffee shop may want to be on the “go to work” side of the street, while a take out restaurant may want to be on the “coming from work” side of the street.

Parking facilities

Major retail chains need to not only worry about retail space but also parking space. Major retail chains get a significant flow of customers, ranging from hundreds to even thousands a day. Serving all those customers means providing proper and safe parking. People who make purchases in bulk or buy a lot in one trip typically bring their vehicles to be able to carry heavy loads. And many customers hesitate to visit a store when they know that parking will be a problem or unsecure. Apart from customers, delivery trucks also need to be able to get in and out easily.

If the site is not big enough for the retail chain to have a dedicated parking facility, it may still consider the location if there are public parking lots nearby.

Space cost

No matter how big or established a retail chain is, the cost will always be a consideration. After all, mortgage or rent are not the only costs to factor.

For more information on metrics you can utilize to maximize the success of your business location, please do not hesitate to reach out to info@cbicommercial.com.