Consolidation of retail businesses or simplified purchases
In today’s competitive retail climate, every business owner is looking to take advantage of every advantage available, and retail consolidation is one of the ways businesses have had success increasing their sales. .
However, it is not only companies, but also the potential customers of these companies who are increasingly trying to make their purchases easier.
If we look at the overall successful shopping experience from a customer’s perspective, it becomes very simple. A customer doesn’t want to drive across town and back to buy various items. They are looking for an easy, simple and varied shopping experience.
The group of retailers fills the bill. It provides the potential customer with an easy and efficient shopping experience and automatically increases the sales of the individual stores in the cluster. That’s why it works.
Retail clustering is important for any retail business district, and understanding the concept is especially important in small towns. A shopping cluster is simply a group of retail businesses located in the same shopping area. They can be in a mall, strip mall, or downtown. It doesn’t matter where they are; what really matters is their composition.
Retail clustering only works when compatible businesses are grouped together and have the same customers. Probably the best example would be food courts in large malls where food vendors are grouped together in one area, the idea being that since they all have the same customers, those customers could come to the food court to buy from one seller but end up buying from several different suppliers.
It works the same in any mall. If a shopping area contains businesses that have the same customers, the likelihood of those customers buying from more than one business is greatly increased. Surveys have shown that a majority of today’s shoppers walk into a shopping area with only a vague idea of the specific items they are looking for. In a shopping strip with compatible stores, the customer rarely visits a single store because the goods in the entire store group would be items that the customer commonly purchases.
In other words, retail clustering is a way for businesses and the customer to be served, and for both to be successful, the customer must have a variety of stores and restaurants that cater to them. , and the companies in turn would have higher sales. The idea that a stand-alone retail business can be as successful as a business located in the middle of 15 other compatible businesses defies all business logic.
Of course, compatible is the key word, and that means a customer of one must be a customer of all. This does not mean that a group of all stores should carry the same merchandise. It is, very simply, that the restaurant or the shoe store or the jewelry store must have the same customer. This customer could possibly buy a dress at a women’s clothing store, have lunch at an adjacent restaurant, and then buy a book at one of the other stores.
Take a look at popular shopping areas, from Main Street in the Magic Kingdom to a mall or mall in Dallas. Disney did a study that indicated that not only did retailer consolidation increase sales on Main Street in the Magic Kingdom, but that storefronts around 25 feet wide performed better. Disney has designed some of the larger spaces with additional doors to replicate 25-foot storefronts, which are the standard width of older downtowns.
However, there are a few negatives in the retailer cluster concept that should be considered. In the commercial area, the shops should all be located on the first floor and there should be a solid line of shops. A mismatched parking lot or store is a killer for retail clustering, and professionals should never occupy first floor space. Studies have shown that many shoppers stop and turn around when they arrive at an unsupported store or parking lot, even if there are stores after the interruption. Office space on the ground floor of a commercial zone is a sure way to lose the benefit of commercial clustering.
Another key to the success of a retail cluster business area is the economic level of the customer. In other words, a resale store next to a high-end women’s clothing store is not a collection of retailers, even though they may both sell women’s dresses. They do not cater to the same customer and lose the advantages of a grouping of compatible retailers.
In the same way, if we were to break the existing strip of businesses with offices or even with businesses that were selling products that were not purchased by the targeted customers, then the entire business area would suffer.
Of course, you can’t get the benefits of retail clustering unless you have a “cluster”. This problem is another reason why the retailer cluster shopping experience works and it’s all about the numbers. A full mall is a great example of successful retail consolidation, and malls fail when they lose stores. A mall with 20% store occupancy is soon a dead mall.
Most small town centers were originally clusters of retail stores. Failed town centers across the country have done so because they either violated the concept of retail clustering or because another section of town, such as a strip mall or strip mall , was more successful in attracting customers. In fact, most downtown failures are a combination of abandoning physical store buildings, adding non-compatible stores or parking lots, and having a mall or mall with a better retail group in which to open stores.
As we progressed in our attempt to create a good retail cluster in downtown El Dorado, our properties on the east and south sides of the courthouse plaza did not look like a cluster of retail businesses. We started redeveloping buildings, recruiting new retail businesses and slowly starting to build a retail hub. There were a few stores that didn’t fit the mix, and we didn’t renew those leases. As the process of developing a good cluster continued, eight restaurants opened downtown and became an essential part of the mix as they serve the same customers as other retail stores.
Next, we brought in a retail development expert to give us advice on how to make our retail cluster a shopping destination. His assessment was frank and direct.
“You need more stores.”
It stuck with us and when we visited our daughter in Santa Fe, New Mexico, we looked at an old department store, which had been remodeled so that there was a public walkway through the center of the store and instead of one store, it was six small shops. It was a “bulb flash”.
We returned home and began work on the empty El Dorado House department store building, and a block away on the old Woolsworth store building. The result was 10 new small stores, and finally we had our retail cluster.
Richard Mason is an author and speaker. He can be reached at [email protected]