Shawn Massey, CCIM, SCLS

It is very expensive to open new stores, but it more expensive to fail! How retailers are choosing locations in today’s retail waters.

Part Three

 This is part three of a series of my reflections on the Tennessee Valley Economic Development forum on retail recruitment that was held September 29th, 2012 on navigating the retail waters.

 How are retailers choosing locations today!

 1.I hope with the help of a good tenant representative such as those co-panelists that were at this retail forum.

 2.Geo spatial data has revolutionized the way retailers choose locations:

                         a. Demographics

                        b. Psychographics

                        c. Co-tenancy modeling

 Retailers are becoming data driven as more reliable sources our becoming available.  Chip Rodgers of the Buxton Group made a presentation at the forum and their data in no longer at the zip code level or block level but at the individual household level!   

 3. Knowing who their customer is.  Traffic and density do not always lead to success.  Do not confuse traffic for as customers.  They want to locate where they are shoppers who will shop THEIR stores.

 4.  Accessibility (Ingress and Egress) and Visibility.

 With Google Earth a retailer does not even need to visit a site to determine its accessibility.  Median cuts, signalized intersections and the ability for customers to see a retailers sign are critical to their location decision.  Connection to main linkages.  The need to see it, get to it and park it!      

 5. Signage, zoning and planning play key roles.

 If there are any negatives to this process that may slow down a retailer’s normal process and timeline then they may put a community on the backburner for a more favorable development climate.

 6. Competition and Neighbors.  They call this co-tenancy.

 Retailers do not want to be island by themselves.  The majority of retailers wanted both proximity and hopefully cross access to retailers who drive the same customer through their store.  For example in small communities, there may not be enough customers to support two major pet food retailers. 

 7.  Total Occupancy Costs versus Projected Sales.  The retailers goal is to   maximize profits with the least risk. 

 Each retailer has a finite amount of development capital to open new stores.  They do not have to open in your community even though it shows very good probability of success if they deem the costs are going to be too high or that the community makes it difficult for a retailer to open a store and do business they will look elsewhere. 

 I hope you will check out future weekly commentary at

www.RetailRocksintheMidsouth.com.   If you enjoy the commentary please subscribe online.

 Cheers,

 Shawn

 Shawn Massey, CCIM, SCLS is a partner with The Shopping Center Group a 3rd party retail real estate advisory firm in their Memphis office, an adjunct professor in the graduate real estate program at The University of Memphis, in 2013 Shawn will join the faculty of the Homburg Academy teaching on-line real estate classes world-wide and is also co-founder &Chairman of the Board for the Memphis Business Academy charter schools (K-12th grade) in the Frayser area of Memphis.  

For all your retail real estate needs (tenant representation, landlord representation and property, investment & land sales) I hope that you will choose The Shopping Center Group and me to represent you and your business.  We understand that representation is a privilege and that you have a choice!

The opinions expressed in this post are entirely my own.  They should not be considered the opinion of The Shopping Center Group, LLC in which I am associated.

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3 comments

  1. Other than WalMart,Target,KMart and grocery stores….what would be your short list of big box anchors and junior anchors to complement and compete successfully with a nearby outlet center?

  2. This article says part III. Where can I find part I & II?

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