Contemplating a retail outlet in a mall? Here's a rundown of essential factors to consider before jumping into this investment.
Let's Theorem this Shopping Mall Deal
Getting started in a shopping mall as a business owner in Brazil ain't nothing to sneeze at. You'll need some strategic planning, cash flow analysis, and a solid understanding of how this retail model bounces in this beautiful country. With high foot traffic and amenities galore, Brazilian shopping malls are a sought-after destination for entrepreneurs across the nation.
Data from the Brazilian Association of Shopping Centers (Abrasce) shows a growing trend of new operations in shopping centers since 2023, thanks to consumption recovery and the emergence of franchises and digital brands busting onto the physical scene.
📺 Stream our WhatsApp channel for more insights Although it seems like the perfect recipe for success, this environment comes with specific requirements that differ from street or standalone stores. Rent, promotion funds, operational norms, and contractual obligations are just a few points to consider before signing on the dotted line.
Here are 10 essential points for entrepreneurs considering a shopping mall venture - whether you're expanding an existing brand or taking your first steps into retail.
1. Examine the shopping mall's crowd makeup
Not all shopping malls fit every type of store. Familiarize yourself with the spending habits of the public that flocks to the commercial center before launching your business. For example, luxury shopping malls thrive with upmarket brands, while budget-friendly malls have a strong pull towards bargain shopping.
2. Assess the store's location within the shopping mall
Location, location, location! The location is crucial for your store's success. Spaces near the food court, main corridors, and anchors tend to have greater visibility and frequent foot traffic, but this increased visibility also often means higher rents.
3. Recognize all associated costs
Besides rent, you'll also be responsible for condominium fees, promotion funds (mall marketing expenses), and, at times, key money (payment to secure a store with an established history). Manage these fixed costs to ensure your venture remains profitable.
4. Prepare for the contract's fine print
Shopping mall contracts sport strict terms, ranging from minimum sales targets to presentation standards for your store. Thoroughly read, negotiate deadlines, and verify you can fulfill the obligations before sealing the deal.
5. Consider the optimal business model for your chosen mall
Not all formats shine in shopping malls. Convenience stores, fashion, cosmetics, food, and quick-service outlets tend to perform well. Evaluate if your product mix and overall customer experience cater to the shopping mall's internal rhythm.
6. Consider your operation's break-even point
With high fixed costs, the break-even point in shopping malls usually surpasses that of street stores, so you'll need to sell more to cover regular expenses. Crunch the numbers before diving in.
7. Stay aware of the retail calendar's seasonal peaks
Retail in shopping malls takes a hit from holidays. Plan seasonal promotions in advance for big days like Christmas, Mother's Day, Father's Day, and Black Friday, which account for a substantial part of the annual revenue.
8. Cherish the team and front-of-house service
Customer service in shopping malls tends to set the bar high. Train your staff, focus on continuous learning, and nurture strong relationships with your customers. The shopping experience can make or break customer loyalty.
9. Leverage the shopping mall's marketing campaigns
Shopping malls conduct promotions, events, and media campaigns to bring in the public. Keep an eye on opportunities to join in and boost your brand's exposure.
10. Maintain your own marketing strategy
While the shopping mall's marketing efforts are crucial, they don't replace your brand's marketing muscle. Foster your digital presence, local actions, influencer collaborations, and relationship management with your customer base. The shopping mall's marketing efforts won't take care of everything.
Opening a store in a shopping mall can be a terrific way to lift your business, but you'll need to prep properly. Familiarize yourself with the shopping center’s operations, expenses, and opportunities to turn your investment into a profit juggernaut. Follow Negócio e Franquia and keep updated on the retail and shopping center news!
- MALL MARKET VENTURE
- STARTING IN RETAIL
- In scrutinizing the shopping mall's customer demographics, recognize that some malls cater better to certain types of businesses, such as high-end brands in luxury shopping centers or budget-friendly options in value malls.
- When contemplating a store location within the shopping mall, consider that spaces near the food court, main corridors, and anchors may have greater visibility but also incline towards higher rental costs.
- Be prepared for a multitude of associated costs, including rent, utilities, condominium fees, promotion funds, and potentially key money, to ensure the profitability of your venture.
- As you review the shopping mall contract, be vigilant about terms like minimum sales targets, presentation standards, and deadlines, ensuring you can fulfill the obligations.
- Contemplate the optimal business model for your chosen shopping mall, considering whether formats like convenience stores, fashion, cosmetics, food, and quick-service outlets are more likely to thrive in the shopping mall's ambiance.
- Calculate the break-even point for your store in the shopping mall, as the costs may be higher compared to street stores, necessitating greater sales to cover expenses.
- Anticipate seasonal peaks in shopping mall retail, such as Christmas, Mother's Day, Father's Day, and Black Friday, and plan promotions accordingly to boost annual revenue.
- Prioritize exceptional customer service in shopping malls, invest in staff training, continuous learning, and building strong relationships with customers to promote customer loyalty.
- Collaborate with the shopping mall's marketing campaigns to capitalize on their efforts and boost your brand's exposure.
- Maintain an independent marketing strategy to strengthen your digital presence, engage in local actions, partner with influencers, and nurture relationships with your customer base, understanding that the shopping mall's marketing won't cover everything.
