From understanding retail catchments and target demographics to knowing typical costs and negotiating a favourable lease, there are several key things to consider when opening a retail space. In the first part of this upcoming ‘How to Retail‘ series, Zelman Ainsworth, Director of Ainsworth Property, shares his step-by-step guide to choosing the perfect location.

Choosing the perfect commercial space for your business requires extensive research and planning. Whether you’re looking to turn your passion into profit or have been running a home-based business and need room to grow, opening a physical retrial store will ultimately give your brand an identity and presence.

But with some 30 million square metres of retail space in Australia, how are you meant to choose a mere 100m2 for your business? Think, location, size, demographics and spending catchment.

First and foremost, before scoping out possible sites to grow your business, we need to address some fundamentals.

Who is your customer? What is their age, gender, and ethnicity? How much disposable income do they have, and what are their purchasing habits? Without identifying who your potential customer is, you will find it impossible to select the right location for your shop front.

Once you’ve identified your customer’s profile, you will have a greater understanding of their spending habits, motivations and needs. Don’t be afraid to ask why they chose you; you will learn much about your business from the people you are trying to attract.

Ainsworth Property team

There are plenty of creative customer research ideas to help gauge what you are doing correctly and what you may need to change. With that in mind, remember that your customer is changing daily. Don’t be too quick to put your findings in the bottom drawer just yet.

There are several free resources on the internet to assist you when trying to understand your potential market and local community. Start by exploring the census data on the ABS website and .id (informed decisions) that provide demographic profiles of your local council. Some LGAs also offer projections on future population and age structure that can help ensure you are establishing your business in a growing neighbourhood.

Now let’s look at an example. Your customer is in their mid-30s, equally split between male and female and earning between $80-$125K. They live within 10km of the CBD, are in a relationship or married, and don’t yet have kids. With these key characteristics we can create a detailed picture of your customer and move on to the next phase in the journey.

This sounds like a young professional who either works in or frequents the CBD. Depending on the key times in which your product or service sells, you may want to consider the city centre or close enough that people can easily visit you throughout their day. Retail is about convenience and experience – without both facets front of mind, your retail compass will start spinning in all directions.

Retail Prodigy Group (RPG) manage the retail franchise of NIKE stores across Australia and New Zealand and is a retail operations partner for the Samsung Experience Stores domestically. RPG Co-founder, Steve Younane, stresses the importance of thorough, consultative site assessment to achieve a long and sustainable presence in the market.

“Besides the commercial arrangement with the landlord, we assess the mall catchment area, traffic and volume. Location within the mall is critical regarding premium brand adjacencies together with size and configuration,” he said.

“You can’t beat getting local knowledge from your Regional Managers together with the old fashion camp out in front of the proposed site. It’s a combination of the art, science and gut feeling.”

Remember that your customer is not exclusively yours. Which other business do they shop at? How do these businesses compare to yours, and are these businesses busy? The neighbourhood – and even the street or centre – where you set up shop will indisputably impact sales. Consider the natural foot traffic and accessibility, as well as the community of surrounding businesses, to attract and share customers. With that said, be sure to scope out the competition. There’s little point opening a hairdresser next door to another hairdresser targeting the same customer.