Shop shopping: picking a new retail location requires much thought. See what you need to do to find the best place for your next store

Pool & Spa News, April 11, 2005 by Rin-rin Yu

Daniel Bridges was having a little trouble at his pool and spa store. Despite generating a large amount of marketing, he wasn't bringing in as much foot traffic as he'd hoped.

"The volume and the new customer clientele were not coming into the business," says the owner of Aqua Co. in Easton, Md.

The problem? The firm was in an industrial park that was visited by people in the commercial sector. Surrounded by a beer distributor, an electrical contractor and a cabinet construction firm, the dealer was not widely exposed to the general public.

"We moved our location across town into a highly visible, highly trafficked area, and our retail volume increased tenfold in six years," Bridges says.

When it's time to move, choosing the right store location is critical to the success of a retail business. Whether it's moving the entire store to a new site or opening a second or third branch, retailers need to address a few considerations before making their final decisions. For example, familiarity with the neighborhood, demographics, zoning, accessibility and visibility should be explored.

On the town

The first step in picking a location is becoming acquainted with the community. Like an anthropologist, a location shopper should learn as much as possible about a town or city to determine if his or her retail store belongs in the area.

"It [takes] a lot of shoe leather," says William Crookston, professor of entrepreneurship at the Marshall School of Business at the University of Southern California in Los Angeles. "Go to city halls, get involved in local Chambers of Commerce, talk to people and buy [the local] newspaper months in advance of going into a community to find out what's going on."

Also, learn about the community's demographics (age, income and family size): Is it an expanding city? What sort of families are moving in? Is there potential for growth in different neighborhoods? If houses are being torn down and apartments built in their places, retailers need to consider how to compete in such an area. Houses that did not have room for a pool may soon make way for apartment complexes that do, for example, or changing cities may cause demand for pools to decrease.

Joey Tassin found opportunity in the south side of Lafayette, La., where he opened a second location within the same city. "Our new store is near ... where new-growth, high-end homes are going in," says the president of Sabine Pools & Spas, based in Lake Charles, La. He explains his company's strategy for opening new locations: "We find out where the homes with pools are located and what opportunities come up."

Some business owners like to physically move their homes and families to the area to become familiar with the neighborhood firsthand. However, small-company owners have a tough time running their entire enterprise from a distance, experts say. It's better to have a key partner who lives near and works in each location, until more resources are available.

Another tip from the experts: Learn about the zoning regulations in the prospective area. Sometimes laws may restrict a business in ways that could hinder its growth. Counties often offer information about changes in traffic patterns, new construction and zoning maps because these types of things are planned years in advance.

Do the blueprints show missing parking spaces or roadblocks in the future? Will construction cause a chaotic mess in front of your store? Or maybe another building is being planned that may hinder the view your store has from the road? Perhaps the plans show a new highway ramp leading people directly to the store's front door.

It can be beneficial to join a Chamber of Commerce or merchant association. They can lobby for funds to improve storefronts, or to add a bus stop or exit next to shopping areas, says the U.S. Small Business Administration. Group efforts are more powerful than individual businesses trying to lobby. If a town or shopping area doesn't have an established, or effective, association, chances are the area is dwindling-not a good sign.

Good neighbors

When shopping for a store location, always check out the area businesses because neighbors help determine the direction a store will go. "Stores have a tendency to cluster among types," Crookston says.

Basing a store in an area that already sells your product shows a demand in that location. The cluster allows customers to shop around, compare prices and service, and motivates the retailer to stay on top of business.

"If you're looking for a new location for a high-end pool and spa store, look for a store that does custom kitchens and sells high-end ranges, wood cabinets and furniture," says Jon Schallert, retailing consultant and president of The Schallert Group in Sorrento, Fla.

"Those types of accessories of home products are going to be luxuries instead of necessities," he adds. "It's a better retail cluster for you."

However, Schallert says opening next to a competitor can hurt if the stores are too similar. He recommends making sure the stores differ not only by pricing of products, but also in the quality of service and marketing that make people shop around the cluster.