Shop location determines buyer response

Shop location determines buyer response

Site selection is one of the most important decisions in setting up a computer sales business, writes New Zealand Reseller News' Brian J DooleyAUCKLAND - Whether you intend to operate as a retailer of discount systems or as an integrator of corporate networks, you need to find a location that will meet your specific needs while fitting into your budget. Setting up the store, like most aspects of retail, requires careful planning and a solid analysis of business plans and expectations.

Unlike other retailers, computer resellers often come from a technical background and tend to have less experience with standard retail practice. Although many aspects of the business differ from selling items like appliances and furniture, there is much to be learned from other retail areas. Selecting a business site is one of those differences.

"The first thing you need to do is determine where your customers will be coming from, and look at the basic demographics of the area," says Dave Butler, general manager of Auckland's Retail Consulting Group. Retail Consulting Group provides a consulting service that includes store design, project management, site selection, development and lease negotiation. The consultancy has worked with a number of computer retail clients, including some of the biggest.

"Other factors depend upon the nature of the business," Butler says. "For example, it might be possible to work with a lower-profile location to obtain better parking facilities.

One of the problems in selecting a location is determining proximity to other stores. Malls offer an integrated centre with services and a strong pedestrian count, but store sizes tend to be smaller and leases are expensive. Another option that is growing in popularity is to locate larger stores in "power centres", alongside a number of other stores.

If you decide on a more remote location as a trade off for low rent and better parking, you'll be faced with the marketing problem of bringing people out to the location. A compromise is to run small satellite stores in high-traffic areas, with products warehoused in a less expensive remote location.

Deal with the details

As for store size, Butler also sees this as a matter of the type of market you are serving and your retail strategy. "Larger format stores in recognised retail areas can work for the discount retail area. But size really depends on who you're selling to and your overall retail strategy. A smaller store might work in a satellite location, or when dealing only with corporate clients.

"Once you have decided on the space, you can deal with the details of floor design. That requires another level of analysis."

Because good retail floor space is likely to be expensive, it is important to carefully examine leasing arrangements. Of course, more desirable locations will have higher costs per square metre.

As for the "lease versus buy" decision, Butler recommends that any purchase be viewed strictly as an independent investment.

"The main thing is to match your site to your business plan. You need to find a solution that meets your sales requirements and budget," says Butler. "This means taking a careful look at sales expectations and the bottom line. Every case is different."

Of course, you can always look for a low-cost lease, hang out a shingle . . . and hope.

Or, you can sell on a straight mail order or online basis. But, if you expect to have customers step in, you need to pay attention to location.

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