Nearly one year ago, no one was sure how the new COVID-19 pandemic would impact retail. Seemingly quickly, shops closed their physical doors and the country began to stay at home. Over the months to follow trends emerged and the market changed in ways that now make it an enticing time to start a business. There are four major reasons why it’s a great time to open a retail store. Read on to discover how 2021 provides great opportunities to open a retail store, and create a strong business plan with strong technology you need both during the remainder of the pandemic, and for post-pandemic retail.
1. Low-Interest Loans
If you are considering opening a retail store and purchasing a commercial space, now might be the perfect time to do so. Why? One result of the pandemic is that real estate loan interest rates have dropped significantly. According to ValuePenguin.com,
“Currently, the average interest rate on a commercial real estate loan is about 3% to 12%. The actual interest rate you secure on a loan depends on the type of loan you choose, your qualifications as a borrower, and the type of building or project you’re financing.”
Additionally, according to investment management firm Colliers International Group Inc., in 2021 investors expect to see pricing discounts of over 20% on retail and hospitality real estate, presenting a valuable, cost-efficient opportunity to repurpose these vacant storefronts.
Securing a commercial real estate loan comes with many benefits, including the ability to build equity and make the most of additional tax benefits. But what kind of loan is best for your needs? The various commercial loans available today offer different terms, rates, and uses. Click here to read more about different commercial loan options on the market.
2. Affordable Leases
Looking to lease, not buy, a retail space? It’s still a great time to open a store.
Due to the pandemic, commercial landlords have been providing rent relief in many ways to its retail tenants. Some examples of this include granting concessions on lease payments, lengthening payment terms, extending or shortening leases, permanently lowering rents, and forgiving past-due payments, according to The Wall Street Journal.
Another alternative some commercial landlords have been offering a turnover rent model to its tenants. According to Retail Gazette,
“Turnover rent is calculated by reference to the income and other receivables generated at the leased property – usually it’s an agreed percentage of turnover. Because turnover-based rents are closely aligned to individual stores’ performance, it arguably creates a symbiotic relationship between landlord and retail tenant. During a successful sales period, both parties benefit, but less favorable times can create an incentive to seek improvements.”
It's important to commercial landlords to agree to providing rent relief so that they can avoid their occupancy rates from decreasing during the pandemic. While making concessions is not ideal to landlords, it is better than their tenants leaving all together. Because of that, it can be an affordable time to open a store, whether you are expanding an existing retail franchise or starting a new brick-and-mortar business.
3. Business-Boosting Omnichannel Technology
So, you may be wondering how to open a retail store and survive in the current market. One essential way to boost your business is to leverage omnichannel retailing, or the seamless merging of physical and digital storefronts.
Incorporating e-commerce into your business plan was important before COVID-19 rattled the world, but due to lockdown requirements and the hesitancy some currently have to shop in physical stores, it’s simply a must in the current retail landscape. By embracing both brick-and-mortar and e-commerce, you can increase your store’s visibility. Some other benefits of omnichannel retail include:
- Improving sales
- Higher margins
- Building brands
- Better data collection
- Increased staff productivity
Taking advantage of all that omnichannel retail has to offer requires the right technology. First, you must be sure that you use POS software that facilitates both in-person and online shoppers. Some features to look for in a POS software include a white-labeled online shopping platform, curbside pickup and buy-online-pickup-in-store (BOPIS) functionality, multi-store inventory management, detailed reporting, and marketing capabilities.
Equally important is choosing POS hardware that works with your chosen modern POS software. It’s a good idea to confirm that all of your POS hardware – including your receipt and label printers, cash drawers, and more – are compatible with your software. An easy way to ensure that is to choose a POS hardware manufacturer that is a one-stop shop that can provide a full retail POS hardware solution and is integrated with the industry’s top retail POS applications. Another must-have is online order printing capabilities.
While e-commerce is important, the aesthetics of your brick-and-mortar location is still crucial. Choose POS hardware that is sleek and compact, like the Star Micronics all-in-one mPOP™ that combines a printer, cash drawer, scanner, and tablet stand. It’s also essential to protect both your staff and customers, so don’t forget to install sneeze guards and antimicrobial film on commonly touched surfaces.
Dry cleaner leverages Sudzy POS software and Star Micronics printers for a spotless, cloud-based operation.
4. Brick-and Mortar is Here to Stay
Yes, really. The pandemic has shown people do indeed value going out and visiting brick-and-mortar retail locations. According to The New York Times, consumers still like to shop in person, even if that only entails picking up their orders curbside. Furthermore,
“The popularity of curbside pickup reveals that the future of retail is not just more packages piling up on people’s doorsteps. Beyond satisfying the need for contactless shopping in the pandemic, it taps into Americans’ desire to drive to a store, a pull that can be just as strong as, or even stronger than, the convenience of home delivery.
‘Americans are used to their cars and actually do like stores, so this is kind of a hybrid where you’re getting the best of both worlds,’ said Oliver Chen, a retail analyst at Cowen.”
For those shoppers that do enter the store to browse or pick up their BOPIS orders, it’s important to keep your store safe by social distancing, wearing masks, and using equipment like sneeze guards and antimicrobial film covers, and embrace omnichannel retail technologies.
While the retail landscape certainly looks different now, it’s still a great time to open a store and with the right technology, you have a great chance for success.