By Jim Robeson, co-founder and CEO at PiinPoint
While online brands such as eBay, Amazon, and Zappos are now household names, according to a study by AT Kearney, 90% of shoppers still prefer a brick-and-mortar retail experiences over shopping online. Further, 94% of all retail transactions still take place in a traditional brick and mortar setting.
So for the majority of retailers, particularly those in the mid-market segment, a physical store presence still holds tons of value. And opening a new location (or two, or three) allows that business owner to reach more customers, penetrate the market with their products and increase sales.
But expanding a brick and mortar retail operation into new locations and geographies does not come without significant challenges. It is a very expensive expansion option. Business owners need to find a new location, build out or renovate the physical space to suit the business need. Typical expenditures include a leasing security and utility deposit, first and last month’s rent, location improvement costs (construction, fixtures, other renovation costs) or new construction costs, inventory, technology/systems. The business also needs to hire additional employees to staff the new location and market the business and its products to an entirely new geography and (possibly) demographic audience.
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