The #1 reason retail stores fail is a lack of customers.
The store is either hard to find, or in the wrong location. Thus, it fails to get more customers into the door.
In this blog post, you’ll learn the secret to choosing a profitable retail store location.
This secret that runs counter to conventional business advice. But when you learn it, you’ll notice how it’s used by many successful retail businesses.
Here it is:
A retail business can gain more customers when the store is located close to its competitors.
Store owners want to avoid competition if it means losing customers to a rival business.
However, customers love options and deals. That’s why visiting places with competing stores will be in their best interest.
Finding a profitable store location may not be easy but it’s worth the effort.
And to help you, here are the five questions you need to ask when considering a retail store location.
#1 – Are there well-known and established rival businesses in the area?
Well-known brands can boost your retail store’s visibility. This is especially useful if you’re a newcomer — the popularity of a well-known store can send curious shoppers to your store as well.
However, prime locations near established brands are expensive. In the long run, though, the money you save from marketing costs could justify the large investment in the location.
#2 – Are there opportunities to offer complementary products?
Customers visit other stores to discover new items or fulfill additional needs. For instance, someone visiting a coffee shop may also be interested in baked goods.
So, find a location where other businesses provide products that complement yours.
On one hand, customers benefit from the convenience of getting everything they need in one place. On the other hand, your business can benefit from more foot traffic.
#3 – Are customers likely to compare prices and features before a purchase?
Customers love great deals, which is why comparison shopping is a popular method of deciding a purchase.
Typically, buyers like to compare appliances, electronics, and furniture because the prices and discounts vary depending on the store.
And if you set up your shop close to a competitor, you’d actually be attracting more potential buyers. This is a win-win situation for similar businesses in the area.
#4 – Can you offer additional conveniences to customers?
You can attract customers by providing new or better amenities. Some examples are free parking, curbside pickup, or extended store hours.
The key is understanding the customer’s buying experience, then providing unique and surprising solutions.
#5- Are the competing stores nearby going to help boost your brand?
The halo effect is a cognitive bias that influences buying decisions. A particular location gives us a positive overall impression. Therefore, we see the stores positively as well.
You can boost the reputation of a lesser-known brand by placing it next to a popular brand.
And since brand recognition is a powerful driver of buying behavior, the halo effect can send more potential customers to your store.
Ultimately, you want your store to stand out from other similar businesses.
Choosing a location near competitors can help buyers find you. And when they do, you can impress them with the quality of your products and service.
While other businesses dislike competition, you can use it as a tool to make your retail business successful.
Did this inspire you to consider a new store location?
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