Sunday, March 10, 2013

Retail Recruitment 101: Tips for Identifying Potential Tenants

More and more communities and cities are taking proactive steps to attract retail. They conduct market data, develop attractive marketing material…and then what?  Too often, that material sits on a shelf. Or it gets mailed to a list of retailers without much response. Unfortunately, the mailbox becomes a veritable black hole where many organizations throw scarce marketing dollars.

While marketing material can be useful, retail attraction is ultimately a relationship-driven industry. And it’s one of the reasons why it can be so hard to gain initial traction with retail recruitment efforts. Cold calling retailers (or with national retailers - their tenant representatives), may not yield success at first because you are starting from scratch. You have no track record. Consider this - successful brokers take years to develop relationships with retailers by making it their full time job. Unless you are prepared to do the same – and few organizations have the resources to do so –consider a different approach. Actively enroll  partners in your efforts to find suitable retailers for your community.

What does “active enrollment” look like? One strategy is to develop a Retail Attraction Task Force and engage members in proactive prospecting. On a monthly basis, ask them to bring potential prospects to the group for consideration and evaluation. Before setting them about their task, below are some tips for effectively combing the local market for tenant leads. These strategies combine a mix of formal and informal efforts. Here are just few options:

Keep up with the News
·            Keep up with the retail industry trade publications, including Retail Traffic, Shopping Centers Today, your local business newspaper, etc. that cover retailers in expansion mode. Local newspapers may also include stories on successful retailers.

·               Use your broker network. Commercial brokers have knowledge of retail trends and relationships with tenants looking to expand or relocate.
·               Go to industry networking events; consider joining the Real Estate Board of New York or the International Council of Shopping Centers.
·               Shop Business Plan competitions. The winners of these competitions are well prepared and eager to start businesses.
·               Reach out to other BIDs, merchant associations or CDCs with similar demographics and ask them who about retailers in their district who might be poised for expansion.
·               Comb the databases. Many commercial brokerage firms maintain subscriptions to retail databases, including Plain Vanilla Shell, Crittenden Online, Tenant Search and InfoUSA that provide information about retailers and their expansion plans. Beware however, if you choose to do this yourself. This strategy involves expense (most of these require monthly or annual subscriptions) that will give you long lists of retailers that you will need to investigate. Many will be national chains and cold calling or mailing will not yield much response without significant follow up efforts.

Eat and Shop (this is the best part!)
·               Identify similar districts and visit them on a regular basis to identify potential tenants.
·               As you shop and dine in other neighborhoods, make a point of asking to speak to the owner and congratulating them on their business. Use this as an opportunity to build relationships with business owners that might be a good fit on your district. Remember, successful business owners are often looking to expand. This is a great opportunity to get your community on their radar.
·               Get referrals from merchants about their competitors. Existing businesses are often a wonderfully underutilized source of leads. Many business owners know other business owners who are interested in expansion.
·               Look at existing businesses in neighboring district. Sometimes existing tenants need to expand but cannot do so in their current location. Helping them identify a second location in your district is a way to help these small business expand. Sometimes communities fear that this will be perceived as poaching. The fact is, if a retailer is doing well in one location, they will not close that store. Instead, they are likely looking for opportunities to grow their market by opening a second or even third location. Also, keep in mind that a retailer looking to open a third location is a stronger option than a retailer figuring out the logistics for the first time of managing a second location.

·           Craigslist has emerged as one of the more powerful tools in retail recruitment, especially among smaller entrepreneurs seeking retail space. Consider place a Craigslist ad for your community. Offer a few examples of spaces available and a few bullet points about the strength of the market, and then tell interested parties to contact your organization to set up a tour.  
·          Market your services as a clearinghouse for pre-qualified leads to brokers and property owners.
·           Sponsor a ‘Storefront Stroll’ – coordinate with your property owners and brokers and arrange for a day when multiple vacant storefronts will be available for viewing within your district.

Get Creative! Don’t be limited by this list. Every conversation and interaction with your networks is an opportunity to grow your prospect list.

Remember, prospecting can be fun. Who doesn’t like to shop and dine out? Just be sure to use these opportunities to find prospects and develop relationships with new business owners.