Avoiding Common Mistakes in Retail Attraction

One of the most common mistakes I see when commercial district managers attempt retail attraction strategies is a real disconnect between the retail they want to see in the district and the availability of space in the district to accommodate those uses appropriately. This often comes from a lack of understanding of what the retailers want and need in order to develop a successful store. Understanding retailer (or restaurateur) site selection criteria is critical not only to successful retail attraction – but to a successful long-term relationship with a retailer. There is nothing worse for your credibility or the reputation of your district than significant store turnover. Turnover communicates to potential other new businesses that an area is not a good investment – and makes your job over the long term that much more difficult.

How do you figure out what retailers need and want? Sometimes they don’t even know!

Many district managers I work with are far more interested in attracting unique specialty stores and restaurants – rather than chains – to their districts. These smaller entrepreneurs are often much less sophisticated in using market and demographic analysis for their site selection decisions, which is fine. But I encourage district managers to take the time to research and understand industry standards and guidelines – yes, even for chains – to get a good sense of what kinds of spaces work or don’t work for different retail categories. This kind of information will only help you develop better talking points for any retailer you approach.

Information about retailer site selection criteria requires some research. Two good resources include:

• ICSC’s Shopping Centers Today

• Retail Traffic

Get to know your district from the perspective of a retailer/restaurateur

What are typical space requirements for these kinds of retailers? What kinds of complimentary uses would help the retailer generate additional customer traffic? Who is the target market, and do you have enough of those people in your trade area to support the business over the long-term? Tucanos grill, for instance, is looking for 7,000 to 7,500 square feet in “middle markets” with good proximity to a movie theater/entertainment. If you were to approach Tucano’s – would you be able to bring them the kind of space that would make a meeting worth their while? (Ref: Retail Traffic, 12/16/09, “Tucanos Grill Starts to Sizzle”)

This kind of information is not always intuitive – so do your homework before reaching out to the retailers you are interested in and determine whether your district fits their needs.

Work with a Local Broker – and If you Don’t Have One, Become the Local Broker

If you don’t know your district vacancies very – develop a working relationship with local brokers. Unfortunately, many districts – the market may be too weak to attract the interest of local brokers, in which case you will need to make sure you develop and maintain a very good building and business inventory (which you should have anyway!). Consider developing an on-line list of vacancies. A simple listing of vacancies like those shown here at Urban Solutions, a great Bay Area non-profit that focuses on retail attraction in difficult urban areas, is a good start.

Even during these difficult times – there are retailers seeking good deals and good spaces. But before embarking on a retail attraction initiative, take the time to figure out if the available spaces in your district are the right ones for the retailers you want!