Bullet points on getting the real estate parameters right for your retail business
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| Get your retail location spot on for success |
On the surface it may seem that this big a subject cannot be covered in a few bullet points, but then, what are bullet points for? Also, as paragraphs and books have not worked! Here we go:
1. Everyone says Location, Location, Location. I say your product defines location. Think - Eateries and Idol stores outside any temple complex. Also, based on the kind of traffic the complex receives and the amount of shoes that are lost, they can have footwear stores there, but it doesn’t happen, does it!
2. Category of Retail defines area. In India, having a 3000 sq ft. men’s fashion store is a liability. It will not make money for the retailer or the landlord. Also, the landlord is saddled with a negative perception of location by prospective retailers in future. Bring it down to 3 stores of 800 to 900 sq ft each. Make better rents or revenue shares. Positive perceptions. Long term glory!
3. Look for Trading Density of the brand that wants space. If this term is too technically challenging, ask for sales per sq ft per month. Every category has its own optimum point but try and go for the brand that is surely in upper reaches of the graphs. That helps maximize your returns!
4. Understand your demographics (layman meaning: surrounding population, earning potential and life quality) nicely. This helps put in the right kind of retail. Ex: Mall A in a downtown location with great brands and great footfall does less per sq ft business than Mall B in an outskirts location with average brands and average footfall. Mall A has browsing population from offices and colleges. Mall B has pucca high end residential complexes around it where the propensity to buy is much more. Makes sense??
5. Your architect needs to design according to Location, Demographics and Brand requirements, in that very order. Don’t even try fancy palace, lotus or Leaning Tower of Pisa designs where not required. Also, as per the first point, all of it again is defined by the products you wish to sell from there. If you want to build space for a Grocery Market – 6 mtr height, less columns, a box shaped structure, easy rectangular circulation and motor access all along the periphery is what the location demands, not a strange two storey building with 6 people lifts, steep parking ramps, etc. You will go out of business faster than you can utter the F word!
6. Build for 25 years and not for 5 years with a knee jerk policy. Brands appreciate your long term commitment. You may make Rs. 5 less per sq ft. But once you make your second property you will know what I am talking about!
7. A retail centre also speaks to its consumer. Many don’t realize this but it happens. So, put in your property management early. Don’t allow your arcades, centers, malls or warehouses to go to seed. This is your trade. Respect it and give it the due, it will bring home the moolah!!
8. Even if you sell off store units, remember the center runs with your brand name or your company’s insignia. Manage it well, it will bring dividends. Remember Yash Chopra sells all of his films at the table, but yet turns out carefully done products fit for a world release. He knows it is his brand that is at stake, finally. So, go on and dial your architects and consultants to do better now. Or leave your feedback in the comments box below and we can get together and work out something that will, er, work!
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