The rapidly changing and often unpredictable retail landscape presents dynamic challenges, ranging from operational - supply chain disruptions and labor shortages – to technological, such as the proliferation of new technologies that change how customers shop for and pay for products and services. Organizations are being forced to adapt quickly and do more with less, leaving little margin for error.
Site selection and construction project management often sit with separate teams and separate systems. Retail construction management works best when both share one plan, one budget and one set of dates. This article covers what decides a good retail site, how a retail construction project moves from plan to opening day and how to repeat that process across a multi-store rollout.
Key takeaways
- Accessibility, competitors, parking and total cost decide whether a site can support a new retail store.
- A retail construction project moves through planning, execution, monitoring and close, and the planning phase sets the schedule and budget for every phase after it.
- A retail rollout repeats site selection and construction across many stores, so it depends on a standard store prototype and one shared system for tracking every project.
Site selection: 4 factors that decide a retail location
Choosing the right location starts with knowing your target audience's whereabouts. It also requires a deep understanding of the industry, your customers, the competition and logistical aspects that can influence whether a new location is ultimately successful. A structured approach to commercial real estate site selection weighs four factors before anyone signs a lease (our post on the four important factors for site selection covers each in more detail).
Accessibility
Choosing a location that is easily reachable by your target audience is important. But how can you determine whether a site is accessible? The answer depends on several factors, such as your target audience’s needs and preferences and the density of the neighborhood.
For instance, if you are seeking a retail location in a suburban area, proximity to one or more major roads and visibility from the road are crucial. However, if your store is in a densely populated area, proximity to high-rises, public transportation and other stores that your target audience regularly visits, such as a bank or a gym, will factor into your decision.
Competitors
Assessing the presence and performance of competitors in the vicinity can provide valuable insights. Are there gaps in the market that your brand can fill? Are there nearby stores that draw the same customers without selling the same products? Likewise, are there more established brands that offer similar products and services? If so, you will share the market and will also need to offer a unique competitive advantage for customers to choose your store over others.
Parking
Considering parking logistics is critical to ensuring that your store is accessible to your customers. A lack of parking or inconvenient parking arrangements can deter potential customers, while ample and well-organized parking can generate foot traffic. In densely populated areas like New York City where many customers walk or use public transportation to get to your store, fewer parking spaces are needed.
Costs
A retail location strategy also has to work financially. Retailers must evaluate the costs associated with a particular location, considering the upfront expenses and the ongoing operational costs. Beyond base monthly rent, consider additional costs such as utilities, taxes and common area maintenance (CAM) expenses. Moreover, if the space requires significant renovations or repairs to get it move-in ready, it is crucial to account for these expenses. They can quickly add up and turn a seemingly ideal location into one that is not profitable in the long run.
The 4 phases of retail construction management
Once you have selected a site, the next step is to adapt it to your needs. Retail construction management covers that work, from the first budget to the day the store opens. Each phase of the construction project lifecycle (some teams split it into five phases of the construction lifecycle) presents unique challenges and requirements. Understanding these ahead of time helps keep projects on time and within budget.
Conception and planning
The foundation of a successful construction project lies in its planning. For a retail store, planning confirms that the store prototype fits the space, checks zoning and permit requirements and sets a target opening date.
If you are not sure where to begin, a feasibility test can help you examine the project’s scope and objectives to determine how realistic it is. If you determine that the project is feasible, then the next step involves the actual planning: defining the project and its scope, identifying important milestones and creating a budget. This process is often the most time-consuming aspect of any project, but it is also the most important, laying the groundwork for subsequent phases.
Execution
With the plan in place, it is time to bring your vision to life. Effective project management during the execution phase involves coordinating the general contractor, vendors and internal teams, managing resources and adhering to your timeline. Retail builds add store-specific work, such as fixtures, signage and point-of-sale systems, that has to be finished in the right order before opening day. Flexibility and adaptability are crucial, as unforeseen challenges such as permit delays or late materials can emerge during construction.
Performance monitoring
Regular performance monitoring helps ensure that the project is running on schedule and within budget. Information and collaboration among project managers, contractors and other stakeholders play a vital role in identifying any deviations from the plan, allowing prompt corrective action to keep the project on track and the opening date intact.
Project close
Close is the handover of the finished store to the operations team. This phase involves final inspections, walk-throughs and ensuring that all aspects meet the predefined standards. It is also an opportunity to gather feedback and continually improve your processes for future expansion efforts.
How do you plan a retail rollout?
A retail rollout is a planned series of new store openings, remodels or conversions carried out across many locations on a shared schedule. Planning one well comes down to running the same site selection and construction process again and again, with each store teaching the next.
- Set the expansion targets. Decide how many stores to open, in which markets and by when, so site selection and construction work from the same numbers.
- Standardize the store prototype. A consistent layout, fixture package and equipment list lets contractors price and build each store with fewer surprises.
- Score every candidate site the same way. Use one set of criteria for accessibility, competitors, parking and cost, so a site in one market can be compared with a site in another.
- Stagger the openings. Group stores into waves, so lessons from the first wave improve the next and crews are not stretched across too many sites at once.
- Track every project in one system. Keep budgets, schedules, documents and approvals where real estate, construction and finance teams can all see them.
- Review each opening. Record what slowed each project down, then update the prototype, the schedule template and the site criteria before the next wave starts.
Our whitepaper "Navigating Retail Store Development" covers a technology-driven approach to multi-site rollouts in more depth.
How technology supports retail store expansion
Retail store expansion puts site selection and construction on the same clock. Every week a new store opens late is a week without its revenue, so the handoff from the real estate team to the construction team needs to be fast and complete.
Our market planning and site selection software centralizes site data and analytics, so your team can compare locations, conclude negotiations faster and get sites approved sooner. Once a site is approved, Accruent Lucernex Projects manages new store construction, openings and capital improvement projects in one place. Automated notifications, configurable views and mobile access help project teams spot schedule threats and act on them before they delay an opening.
As the Genesco case study shows, the specialty footwear and apparel retailer moved its new store construction documents and site selection approvals into one Accruent system. That gave its legal, real estate, construction and finance teams a single source of information.
Request a demo to see how our site selection and construction project management software would support your next wave of store openings.
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