In an ironic twist, ecommerce – which many predicted would “replace” traditional brick-and-mortar stores – has actually sparked a renaissance in physical retail.
Yes, stores have closed. Foot traffic in some malls has slowed. Times were especially tough in the early days of the pandemic.
However, if you look around, you might notice that in-person retail has largely bounced back.
Today’s retail shops look different than they might have ten years ago – many are integrated with an online presence, serving not only as storefronts but as distribution and customer-service centers – but customers value these places for the same reasons as ever.
While online retailers have the advantage when it comes to convenience, accessibility and possibly speed, physical retailers offer a level of trust and authenticity that’s hard to duplicate online—not to mention human interaction. People in the post-COVID world are craving social interaction more than ever, and getting to meet people and have conversation in stores is a big part of their appeal. No wonder 78% of all US retail sales still happen in brick-and-mortar stores.
That’s not to say online and physical retail are at war, or even really competing. In fact, some of today’s most successful brands are the ones that find harmony between the two.
As we mentioned above, a physical storefront can synergize with an online presence by providing a space for distribution and service, while allowing customers to engage with your brand, your products and your people in a way only a physical storefront allows.
In-person retail hasn’t gone away. Far from it. But it has changed, and so has the process of searching for retail space.
What factors should you consider when shopping for retail space?
The rules of in-person retail are a little different in 2022. Whether you are looking for retail space for lease or buildings for sale, you should consider the following:
Proximity to your customers, as well as accessibility. This has always been one of the most important factors to consider when searching for business real estate, but it’s even more relevant in the era of online shopping. Customers are still willing to drive to certain retail stores, but with the convenience of one-click ordering they certainly aren’t willing to go far.
For some retailers, it may even make sense to open two smaller storefronts to serve two separate communities, rather than one larger storefront to serve both.
Configuration for distribution and curbside pickup. Today, it’s hard to find a retailer without an online presence. And while some skate by with a simple Instagram page, an increasing number are offering online ordering. If your business currently offers online ordering, or might in the future, consider how a location could be configured to support online sales.
Does it have storage space? Can it accommodate services like curbside pickup and delivery? For most retailers, the right space will accommodate both the needs of online sales and the desire to create a quality brand experience.
Internet quality. Most retailers use a transaction system that’s connected to Wi-Fi, so you’ll want to prioritize good internet connection. In addition to faster transactions, a good connection will allow employees to manage your brand’s social media presence and online storefront. Again, this has always been important, but now it’s a must.
Air filtration. A good HVAC system – especially one that neutralizes viruses and particulates in the air – is healthier for your customers and employees. Air quality is top of mind post-COVID, and managing it is an important step to creating a comfortable shopping experience.
Price. Obviously, this isn’t directly related to ecommerce, COVID, or any of the other phenomena we’ve mentioned here. But we are living in a time of economic uncertainty – materials are getting more expensive, the labor market is tough, and competition is fierce – and it’s a good time for businesses to raise their profitability by cutting expenses.
One way to reduce your overhead is by locking in an affordable price for your real estate. If you’re renting, your lease payment should add up to 3-8% of your gross revenue.The exact percentage depends on your industry. For clothing and apparel shops, it’s about 7.66%. For electronics and appliance stores, which rely on physically and fiscally bigger purchases, the average lease is about 2.09%. This article details other industry benchmarks.
Where should you start?
The list above primarily focuses on factors that will help create harmony between your physical and digital storefronts. But there are some key factors we didn’t mention that are critical to finding the right real estate: foot/vehicle traffic, visibility, proximity to businesses that attract similar markets, proximity to multi-family residences and office buildings, and long-term vs. short-term leasing.
With that said, a good place to start is by finding the right community. That means something different to each business, but the bottom line is that you want a place where your target market is nearby, where the cost of doing business is affordable, where the local economy is strong, and where you genuinely enjoy being.
Here’s a good place to start your search:
Altoona, IA: Retail Destination
Located just east of Des Moines, Altoona is a community with a growing number of retail businesses. A destination for entertainment and a hub for businesses, we are home to about 20,000 residents and host nearly 4 million visitors each year. Whether it’s to see a concert at Prairie Meadows or to visit the region’s largest outlet mall – Outlets of Des Moines – people come to Altoona to explore, play and shop.
Ready to explore retail opportunities in Altoona, Iowa? Start by taking a look at our retail data.
