by Abe Sherman – CEO, BIG – Buyers Intelligence Group
June 30, 2020
We have seen this scenario repeated over and over – a store moves and sales increase, often dramatically. We’re not even talking about a big move, sometimes it’s literally a move across the street and sales take off as if the grand opening just kept on going. Two questions; why does this happen so constantly and should you try this at home?
The why to me is the easier question to answer, but it often takes another pair (or 20 pair) of eyes to see what the issue is with the current location. What had been a good location choice 20, 30 or 40 years ago has likely grown tired, irrelevant or outdated. Sometimes a facelift is in order, but sometimes even that won’t help you.
Often the original location was selected because it was either available, affordable or right-sized for the company as it was, decades ago. Exterior design that was perfectly fine then, may simply be shopworn now and the adjoining businesses that were also new when the store originally opened may have been replaced as other businesses closed or moved elsewhere themselves. Unless the new neighbors add something to the town, shopping center or mall, and specifically to your business by attracting viable customers, you would be left pretty much on your own, even if surrounded by other businesses. Because these changes happen over many years, you may hardly notice them.
Inline shopping centers don’t offer the same curb appeal that a free-standing building will, of course, but free-standing buildings are often too expensive, so that option may be off the table for you. But a location move should always be on the table, even if that decision is several years away.
Mortgage rates are historically low and will likely remain here for the next year or two. That makes financing a move far more attractive. At the same time, there is a significant culling of retail businesses underway and many businesses will be closing, banks may be merging and their buildings may be coming onto the market – again. This happens during times of consolidation, seemingly every 10 years or so but with Covid, the word about many, many businesses closing their doors for good, may be an opportunity for you to take a long, hard, objective look at your own space, location, neighbors and future.
It may be remarkable to you, but not to us, as we see this happen over and over again – a business moves and is ‘discovered’ by a client base who would have never walked through their doors otherwise. But a word of caution here; the move isn’t enough. Rather, a re-inventing, re-merchandising, re-imagining of your customer’s experience, even down to the staff that one brings over to the new location. These are the things that make the business take off, not just a change of address.
There are great shopping centers with pad-site buildings that are going to be empty and free standing buildings that can be bought. In the NY/NJ area, there are so many banks closed now, I am wondering how many of them will remain closed as customers move to online banking, relying more on ATM’s and their phones. I have written about this before, but there is an old saying – when there is blood in the streets, buy real estate.