How to Renovate Your Retail Outlet to Boost Sales & Compete with E-Commerce
With realistic expectations and careful forethought, renovating a retail outlet offers immense rewards to the merchant, from boosting sales per square foot to reinvigorating the staff. When done correctly, renovations can improve both the aesthetics and function of a retail store.
Renovating a store can also be a nerve-racking experience. Upfront costs of designers and contractors, lost cashflow, and fears that the final result might fail to impress can keep even the most seasoned retailer awake at night. Sam Cicero, Jr., president of Cicero Construction, offers advice below to retailers honed by his 25+ years experience in renovating commercial properties. Founded in 1970 by Sam's father, Cicero Construction has remodeled dozens of retail outlets across the country. When is the best time for a retailer to renovate? "As a general rule, a retail space should undergo a major renovation every 5-7 years. Or if you are moving to a new retail location or making the leap from e-commerce to a bricks-and-morter location, a large-scale remodel is certainly in the cards. Even if the new space was already built out for another retailer, stamping your brand's unique identity on it requires a remodel." How do I establish a renovation timeline? "Since you may need to close down your store, or at least sections of it, during the remodeling phase, establishing an accurate timeline and deadline is essential. Of course, scheduling a time is easy to do if your store is seasonal or if there are periods when it is slow. However, if store traffic is usually steady all year long, you may want to open a pop-up store while your permanent location is being worked on. Plus, be aware that contractors are often able to perform work after-hours to allow at least part of the store to remain open and noise-free during the day. Customers are creatures of habit and it is a gamble to shut down your store and give them an excuse to go elsewhere.
What is the right scope of work? "The renovation's scope depends entirely on the retailer's goals, as well as the original condition of the space. Are you planning a floor-to-ceiling build-out of an empty 'vanilla box' space? Or is it just a cosmetic touch-up and shuffling the layout? Consult with an experienced general contractor who can balance your budget with the estimated costs of your proposed scale of work. The GC can identify how realistic your scale of work, as well as let you know what areas of your store are best to focus on your investment on... and where to eliminate ideas altogether. Also, keep in mind that if you choose to hire a designer orarchitect, expect that to take 20 percent of your renovation budget." As for costs, Cicero cites the example of millwork. On average, retail build-outs spend almost $10 a square foot on display fixtures or millwork. That’s roughly 20 percent of an average budget. Downgrading the wood from imported teak to oak can result in serious savings for the store owners without impacting their vision for the store.
How does foot traffic work into the renovation? "When people come to your store, you want them to end up at the register. But before they get there, they need to be able to find what they were looking for. A good retail space accounts for foot traffic patterns and aims to provide the best shopping experience for customers. When deciding what type of floor plan to use, ask yourself questions like 'Where do I want my customers to spend the bulk of their time?' or “How do I want customers to walk through and experience my store?” Understanding why shoppers come to your store, and how they shop, are important to consider during the traffic planning stage."
How can a renovation help me compete with online retailers? "It’s survival of the fittest in the retail market, and that means brick-and-mortar stores need to compete directly with online retailers by leveraging their one unassailable advantage: the live, hands-on experience. Brick-and-mortar retailers have the ability to create a social atmosphere in their stores that will encourage customers to linger…and shop…for things maybe they don’t need. With a great renovation a retailer can tell a story to create a whole new in-store branding experience for their customers." To help merchants be more successful and thrive in today's digital era, Cicero also encourages them to study atmospherics. This new science examines the comfort and sensory experiences of shoppers, as opposed to quantifying cut-and-dry layout decisions. Atmospherics are perhaps the single most important environmental factor in translating consumer demand into purchases, and are associated with future consumption behavior in terms of the customers’ intention to visit, purchase and recommend the store to family and friends. Stores that engage customers with a range of senses -- using color, lighting, music and even smell -- will have a much more profound impact with their renovation. Though it might seem odd to focus on these factors, research suggests retailers neglect them at their own peril.