In talking with Yarn Market News about a story they’re doing on finding a second location, a big piece of advice I presented was to make sure you’re operationally efficient at your first location before you even consider a second location. You can read more about creating an operations manual in my previous post.
So, let’s say you have that part down. How do you find a second location?
I recommend a strategy that always demands you look for the follwing: The right city, the right center, the right location in the center.
Here are some things to consider:
The right city. If you know your customer, then you’re ahead of the game. You need to understand the psychographics and demographics of your current customers in order to find the same group of people in another city. You shouldn’t try to find a location, then tweak your concept to fit the demographics of that location. You should find the location that matches the demographics of your current store, then open there.
Let’s say you have a store in “the city” and you want to open a store
in the suburbs. Many suburbs will not have the same income levels as
those of the city. So find the suburbs that have the same demographics.
For a simple snapshot of demographics, visit zipskinny.com. The site allows you to get basic demographic information by zip code and compare different zip codes as well.
The right center (or street front location). Let’s face it, within a city there are a lot of different retail opportunities, from Main Street to a regional shopping mall, from a strip center to a power center and more. They key is to understand what type of co-tenancy makes the most sense for you. You’re not going to open an upscale apparel store next to a Dollar Store. Those are two different demographic audiences. You want to fish where the fish are running. That is, go where your audience is already going. If you do a little digging around town, you’ll find the right places. Grab lunch at a caf? and ask the waitress. Go to a grocery store and ask the checkout clerk. Hit a coffee house and ask the person you’re sitting next to. Chances are they’ll help direct you to the places that are most relevant to your business. Make sure you keep demographics in mind here as well. You want a center that not only has the right ages and income levels, but good population densities as well.
The right location in the center. This is a biggie. I’ve seen far too many retailers fail because they found the right city and the right center, but then took a space in the center that was in a dead zone – the customer traffic didn’t materialize and they went out of business. You have to be patient and wait for the right space. And all it takes is a few trips to the center to stake out the space and to sit and watch for 15 minutes to half an hour each time. Go during different times of the day and different days of the week. You’ll see soon enough whether the space has the traffic or not. Even something as simple as the sightline (can customers see your sign from the parking lot or across the street?) can make the difference between success and failure. Again, talk to other store owners in the center and find out what they’re feeling about the center, the customer traffic, the highs and lows of owning a store there. Their insight can really help guide your decision.