Before opening a retail business, what demographics should I consider?
Opinions expressed by Entrepreneur contributors are their own.When it comes to opening a retail business in a designated area, some factors to be looked at are:
- Average age: There are distinct buying differences among age groups. For instance, baby boomers tend to be more fashion conservative than the forward-thinking members of Generation Y. If your brand is meant to be a trendsetter, make sure the area that will surround your store isn't comprised of retirement communities.
- Income: If you sell higher-end goods, make sure that the surrounding population can afford them. There is a reason why stores such as Nordstrom are only located in affluent regions. Only those who are affluent can afford their products.
- Easy transportation access: there is a mall located by near where I live that is almost completely deserted. It had the same stores as other successful malls in the area. The biggest difference? It didn't have access to a major highway. The most successful shopping centers have easy transportation access -- either by subway, train or highway.
- Is the location currently a destination or are you the only store? Many people who shop aren't searching, they are browsing. How many times have you said "I'll just go to the mall and pick up something for this weekend?" Most shoppers tend to walk in and out of several stores before they make a purchase.
- What types of stores are in the location? Your business should fit in with the businesses in the surrounding area. Most shops in a particular area cater to the same demographic. Rarely do you find a conservative clothing retailer amongst a group of fashion-forward retailers.
- Employment status in the surrounding area: This is a key indicator as to whether the area is growing. If businesses are hiring, that means you will have more potential customers coming to the region. If they are struggling, or laying off, then your customer base will decrease in size.