How to Select a Store Location

As a gift shop owner, securing an optimal retail location can make or break your business. Pick the wrong spot, and you’ll struggle with low foot traffic and disappointing sales. But select just the right place? You’ll tap into a steady stream of shoppers ready to discover your specialty gifts and products.

Choosing an ideal store locale requires careful analysis of demographics, competition, accessibility and so much more. In this comprehensive guide, we’ll cover all the key considerations and data-driven strategies for picking a perfect gift shop location that maximizes your chances for success and profitability.

Finding the right location is crucial for any successful gift shop’s retail strategy. This in-depth guide covers how to select a store location, top tips, data-driven analysis tactics, and retail site selection criteria to attract a steady flow of traffic.

factors for choosing retail location

Understanding Your Target Customer

Before scouting locations, you need to define your ideal shopper profile and primary trade area. For gift shops, some key demographics to analyze include:

Gender Balance: Is your product mix geared more towards women, men or an even split?
Age Groups: What ages are your most popular gift items tailored for (children, millennials, retirees etc.)?
Income Levels: Are your gifts positioned as luxury/premium or affordable impulse buys?
Residential vs Tourism: Do you aim to attract locals or capitalize on a tourist/visitor market?

Having a clear vision of who you want to sell to will greatly narrow your location search to areas with a higher concentration of those specific demographics.

The Importance of Foot Traffic

You may have heard the age-old real estate advice: location, location, location. For retail – and especially gift shops – this mantra rings incredibly true. Since most gift purchases tend to be spontaneous, capturing a steady flow of foot traffic is absolutely crucial for driving sales.

Best locations for gift shops. Some high foot traffic areas to target include:

Shopping Malls/Plazas: These built-in shopping destinations offer a captive audience.
Downtown Districts: Pedestrian-friendly downtown areas with high storefront visibility.
Tourist Zones: Areas near popular attractions, hotels, entertainment districts etc.

Pro Tip: Watch for “ebb and flow” patterns. A location that’s a ghost town in the evenings could be ideal if you cater to the 9-5 office crowd.

To assess foot traffic, you’ll want to:

Commission a Professional Traffic Study/Count
Spend time observing and recording pedestrian counts yourself at different times
Analyze rental rates (higher tends to correlate with more foot traffic)

Competition & Clustering Analysis

While you don’t want your gift shop to be overshadowed by too many direct competitors, some degree of clustering or co-tenancy can work in your favor. Being situated amid complementary businesses like boutique apparel shops, salons, or restaurants can feed off of each other’s shopper traffic.

Use this co-tenancy analysis spreadsheet to identify potential “retail partners” that may create tandem shopping opportunities. For example, customers finishing a haircut may be inclined to browse your gift selections.

It’s generally advisable to aim for locations with 2-3 other non-competing gift/specialty shops in the immediate radius to create a viable retail district.

Understanding Rent, Landlord Incentives & Vacancies

Once you’ve identified some high-potential targets, it’s time to analyze the rental rates and possibly negotiate tenant improvement allowances.

Gift shops should budget 6-8% of projected gross annual revenue towards rent (including CAM fees). Rent in the $25-40/sq foot range is typical, though high foot traffic areas command premium pricing.

Don’t simply take listed rates at face value. Here are some proven tactics:

Look for Vacancies: Leverage empty spaces by offering to take it off the landlord’s hands.
Negotiate Tenant Improvement $: Ask for a cash allowance for renovations/fixturing.
Consider Short-Term Rent Reductions: Inquire about lower rent for the first 6-12 months.

Getting these kinds of incentives can provide financial flexibility as you get up and running.

Zoning, Parking & Accessibility Analysis

In addition to the obvious foot traffic and demographic factors, here are a few more crucial logistics to evaluate:

Zoning: Check that the space is properly zoned for retail/commercial use to avoid surprises.
Parking: While pedestrian traffic is most important, some parking is ideal for curbside pickup.
Vehicle Access: Make sure suppliers and vendors can easily load/unload inventory.
Proximity to Neighborhoods: Being near residential areas can boost local patronage.

Don’t underestimate the impact of these seemingly small details – they can majorly influence your day-to-day operations.

Location Marketing & Visual Merchandising

Once you’ve secured the perfect retail spot, it’s time to make the most of that ideal location through smart marketing efforts:

Install Eye-Catching Window Displays: Compelling visual merchandising is key for pulling in foot traffic. Change up displays frequently with seasonal and themed products.

Distribute Flyers/Coupons to Nearby Traffic Generators: Look for apartment complexes, offices and other high foot traffic areas to raise awareness.

Double Down on Proximity Marketing: Set up targeted social ads, geofences, and beacon notifications to capture nearby shoppers on their mobile devices.

Develop Co-Marketing Partnerships: Team up with nearby businesses on cross-promotions, event sponsorships, joint sales and more to expand your reach.

With some creative thinking and location-based marketing tactics, you can ensure your shop doesn’t go unnoticed by those valuable passersby.

Location Success Stories

Still skeptical about the weight location holds? Here is an example of a gift shop that absolutely nailed their location strategy:

Goorin Bros. Hat Shop in Downtown Seattle: With a highly visible street corner presence and neighbors like the iconic Seattle Public Library, this long-running hat specialty store couldn’t be situated in a higher foot traffic area. Locals and tourists alike flock to this novelty retail destination.

Each location was chosen with extreme intentionality – and it’s clearly paid off.

Conclusion

At the end of the day, the single biggest key to gift shop success lies in how to select a store location that places your merchandise in front of a consistent flow of your ideal customers. By carefully evaluating factors like demographics, accessibility, foot traffic patterns, competition and co-tenancy, you can surgically pinpoint areas that check all of these boxes.

While an optimal storefront may cost more initially, the payoff in sustained sales can make it well worth the investment. So don’t cut corners on this hugely impactful decision for your gift retail business. With the right data-driven approach and creativity in marketing your new storefront, you can select a location that becomes a sustainable differentiator for your shop.