THE SHOP OF THE NEW THE DO’S AND DON’TS TO HELP NEW RETAILERS SURVIVE AND SUCCEED
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THE SHOP OF THE NEW Finding the right shop for your start-up business is one of the biggest decisions to get right. Property editor Mark Faithfull asks the experts for their advice.
Britain might once have been called a nation of shopkeepers but the post-2008 recession has left far too many high streets up and down the country with little more than betting outlets, charity shops and the odd tatty corner store nestled between boarded up shop-fronts. With online marketplaces and low cost websites an alternative to the big financial undertaking of opening up a first shop, it is perhaps a wonder that so many independents continue to spring up around the country. Yet even among the global powerhouses of the pure online players there is a growing interest in establishing a physical connection between the brand and the consumer and it is something that arguably only a store can provide.
Taking that first step is a major decision for any young business. Location, size, rent, neighbouring tenants, category mix and the affluence and demographics of the local catchment are all important, as are the terms of the lease and how easy it is to get out of a contract if things don’t work out. Tough times have turned many – though by no means all - landlords into more responsive and collaborative partners, while there are also some shopping centre operators and local councils which will dedicate space and resources to entrepreneurial newcomers. Add to that the huge rise in short lease properties and the choice of how to establish that first retail presence has never been greater, nor more confusing.
TOP TIP POP - UPS: A SMARTER WAY TO SET UP SHOP?
Abigail Freeman, director of projects & partnerships, We Are Pop Up
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WHAT IS POP-UP AND HOW DOES IT DIFFER FROM A STALL IN A MARKET OR STAND IN A MALL? We classify pop-up space as any short-term, empty retail space. This can be anything from an empty shop on a high street, to an entire building, a gallery, a warehouse, or a more quirky space such as a boat or a disused bus depot! It’s also possible to book ‘ShopShare’ space, which is a concession space within an existing store.
WHY A POP-UP AND WHAT TIPS WOULD YOU GIVE ABOUT CHOOSING LOCATION, TENURE ETC? Think about a pop-up as an excellent way to test your business concept, build awareness of your brand and meet customers. We Are Pop Up has worked with hundreds of designers who started out over a weekend or a few days and have grown to established, successful companies. The beauty of a pop-up is that you can test different locations
TAKING THE PLUNGE WITH YOUR FIRST STORE
Martin Acton, partner, retail services team, Cushman & Wakefield
WHY THINK ABOUT A PHYSICAL STORE AND WHERE SHOULD IT BE? It makes sense to choose a first location close to the main business because that makes life easier as you will probably be spending a lot of time there in the beginning. That will probably outweigh the issues of cost. However, if your brand has a very specific proposition then you also need to be sure that the location is right for that brand placement WHAT COSTS DO FIRSTTIME RETAILERS NEED TO ACCOUNT FOR? All of a sudden you will go from having very simple costs at say a concession to paying rent, rates, service charges, electricity bills, phone bills. You will be involved in design costs and bringing in a shopfitter. There are a lot of things to consider in one go and you need the finances to cope.
Mark Faithfull, Editor, Retail Property Analyst
easily – don’t be afraid to experiment, and try something unusual or unexpected. Choose somewhere that complements your unique brand and your style. When you’re picking a space, look at what’s going on in the surrounding area – who are the neighbouring brands, is passing foot traffic the right demographic for you, does the culture fit your brand? If you’re going for a ShopShare, is there an exciting brand clash you can do that will draw attention to
AND WHAT ABOUT COVENANT ISSUES? If you have run a good wholesale
your story? Why not pop-up your floral prints in a florists or your menswear in a barber’s shop? HOW DO YOU MAKE A POP-UP WORK? People pop-up for a number of reasons, so to make a pop-up work, really think about what success looks like. Is it purely sales? Is it purely awareness of your brand? Is it educating customers about your product range? It could be any or all of these, but keep the aim in
business then you may well have strong accounts to back you up. However, it is likely that you will set up a new business to run the property operation and this may well mean the landlord asks for a guarantee or more probably a rent deposit of six months. For the retailer this means finding the deposit, then paying the quarterly rent bill up front. This can be tough if rent free periods are short in a good location. Landlords on stronger retail streets or malls may be more flexible about deposits if they like the brand or can see a good shopfit going in, as they will be more confident of being able to re-let the unit. SO WHAT DOES A PROSPECTIVE RETAILER DO FIRST? Don’t be frightened by the prospect but take advice. Get yourself a good solicitor and bring in a property agent. You will have to pay them a fee but this is an important decision and just as in many walks of life, getting good advice is extremely important.
mind. We like to encourage brands to use the ‘lean start-up methodology’ of measure, test, learn as you go along. We encourage our customers to not be afraid to experiment and take risks. Collaborate with like-minded brands to build your networks and tap into each-others’ customer base, and make use of all the incredible social media tools at your fingertips, to tell your current customers where you are, and to reach out to new ones.
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