Retail foot traffic is up and will account for more than 83% of all U.S. retail sales this year, leading to headlines that promise, “Shopping malls are making a comeback in America.”
“Consumers really like shopping in-store; they continuously gravitate toward it,” says Katherine Cullen, Vice President of Industry and Consumer Insights at the National Retail Federation (NRF). “But whether that’s right for a specific small business depends on how their customer likes to shop and what kind of experience they’re able to deliver.”
Consider these factors to decide if brick-and-mortar is the right next step for your small business:
Evaluate product fit
Products that are highly tactile or experience-driven or that benefit from consumer try-ons, demos, or hands-on exploration are especially well-suited to brick-and-mortar locations, according to Patricia Huddleston, Professor of Retailing at Michigan State University.
Think omnichannel
A physical store should complement—not replace—your digital presence. “You don’t have to sell online, but you need an online presence to draw Millennials and Gen Y and Gen Z to the stores,” said Huddleston. Retailers that offer omnichannel experiences increase consumer engagements 250% compared to single-channel retailers.
Start small
Pop-ups and partnerships for shared spaces or short-term leases allow small business owners to evaluate foot traffic, product appeal, and location. Cullen notes, “Pop-ups can be a way to test how consumers feel about your products…and get exposure without committing to some of the larger expenses that come with a more permanent location.”
Consumers really like shopping in-store; they continuously gravitate toward it.Katherine Cullen, Vice President of Industry and Consumer Insights at the National Retail Federation
Create a standout experience
Shoppers want more than just products; they want novelty, entertainment, and community that in-store experiences can provide. A standout experience can also improve sales. Customer experience is an important factor in purchasing decisions for 73% of consumers, and 42% would pay a premium for a welcoming experience.
“Online has become very transactional,” Cullen explained. “A store is a way to step outside of that algorithm box and be exposed to something maybe you wouldn't have come across in browsing online.”
Consider the location
One of the biggest benefits of a retail location is the opportunity to draw in new customers. “People will discover you just by walking by,” Huddleston said. A Mastercard survey found that the value of the right location is the reason that 51% of small business owners prioritized stores in higher-value markets.
Crunch the numbers
It’s no secret that a brick-and-mortar location comes with additional expenses like rent, staffing, utilities, and inventory management. Huddleston estimated that operational costs can run 15 to 20% of net sales, adding, “If there's a lot of competition in your category, staying online may make more financial sense.”
Opening a retail location can be a powerful growth driver but it’s not the right move for every small business. When it’s executed well, a physical store can elevate a brand, but success hinges on understanding customers, product, strategy, and budget.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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