Posted: Sept. 28, 2012, 1:15 p.m. EDT
Refreshing store layouts and increasing square footage can draw customers and boost profits.
By Keith Loria
Those in the business of retail might think that in the current economic environment, the idea of expanding a store is crazy. Consumers are spending less money, the U.S. Department of Commerce reported in July, and small businesses have been failing at an increasing rate since the last recession up to 2010, according to a report titled “The State of Small Businesses Post Great Recession,” released by Short Hills, N.J.-based Dun and Bradstreet.
However, though counterintuitive to some, this may be the perfect time to grow a business.
“While fear of the recession is causing some retailers to tighten their belts, this is actually the opportune time for a small business to expand,” said Jan Norman, small business columnist for the Santa Ana, Calif.-based Orange County Register and author of “What No One Ever Tells You About Starting Your Own Business.”
“With retail real-estate vacancies at an all-time high, and retail lease terms at an all-time low, expanding ahead of recovery makes good business sense,” Norman added.
Deciding on Expansion
This seems to be what small businesses across the U.S. are doing in increasing numbers. According to a spokesperson for the U.S. Small Business Association in Washington, D.C., there was an increase in retail stores that expanded in 2011, with the highest totals in three years. Although no hard numbers relating to pet stores were available, many pet retailers reported undergoing a store expansion to grow business.
The Pet Beastro in Madison Heights, Mich., recently doubled its retail space to 2,400 square feet to accommodate a new 10-door display freezer, additional products and a consultation room.
The store offers raw, dehydrated, organic and natural food alternatives, plus treats and supplements for dogs and cats.
Adding a freezer section for raw foods is just one advantage of a redesign. Photo Courtesy of The Pet Beastro
The decision to make the store bigger came out of owner Jill Tack’s concerns over commercial pet food recalls and the growing reports of pets experiencing allergies and other health issues from eating commercially available pet food.
“The expansion was really necessary because a lot of the companies that we currently carry were coming out with new flavors and formulas, and it was getting to the point where we didn’t have any shelf space to put them,” she said. “Plus, we needed a walk-in cooler to offer new products.”
Luckily, there was an empty unit on both sides of the store, and Tack was smart enough to think ahead.
“It was drafted into our lease that if one of those was going to be taken over, we had the right of first refusal,” Tack noted. “It didn’t happen right away, so it allowed us to save money and figure out what we wanted to do with the space.”
Do It Right
One of the problems of expanding a space is that some owners can get pretty gung-ho about the idea and want things to happen quickly. But if they act too quickly, store owners might be making a costly mistake.
The remedy, industry professionals reported, is to consider expansion goals and objectives before initiating a project. Stephen Donaldson, principal, chief strategist with RadiantBrands, a Berkeley, Calif.-based consulting agency, has designed remodels of nearly 20 pet stores.
“I think you need to consider two things: You want to be unique from your competitors and you need to focus on the local community,” Donaldson said. “As you remodel, reflect some of the personality of the community in your store—maybe through signage or through photos of local dogs. This way, you will increase a loyal following.”
It’s important not to overwhelm people with merchandise or change up too much, he continued.
“You want to make it simple and not an overwhelming environment in an expansion,” Donaldson added. “You also don’t want to make it so different that people feel it’s not the same store.”
Once retailers have made the decision to expand, they should make a list of what they want and seek out either a designer or architect to follow through.
Getting help can smooth the entire process and act to ensure success. Chris Miller, president of Pacific Store Designs Inc. in Garden Grove, Calif., has designed for a number of pet store expansions, and noted that there are lots of things to consider.
What should someone considering expanding a pet shop prepare before meeting with a design professional?
“One should have a direction or inspiration. It could be out of a magazine or something they have seen in their travels. I like my client to share that with me in order to develop a plan and concept that will suit the client look and feel for the space.”
—Vanessa De Leon, interior designer and president of Vanessa De Leon Associates in Edgewater, N.J.
“Before meeting with a design and retail marketing professional, it’s essential that the retailer have as much information about their customer base as possible. Why do they come there? What’s memorable about their store? The most important question I’d ask is ‘Who are your primary customers and what makes your store unique?’”
—Stephen Donaldson, principal, chief strategist with RadiantBrands in Berkeley, Calif.
“They need to know in their mind that they will be profitable enough to expand. They need a well-thought out plan. I have a seven-page long intensive checklist that I go over with them to help them make the decision.”
—Chris Miller, president of Pacific Store Designs Inc. in Garden Grove, Calif.
“We talk about their budgets and wish lists, and we develop a scope of design work for multiple space plans and analyze all of their subcategories—dog food, cat food, reptiles—and get a percentage of sales per square foot and allocate it in the design,” Miller said. “We work a lot of ideas and funnel down to finalize a floor plan that they’re happy with and that has the capacity for their products and needs.”
Next comes choosing a color scheme, cabinets, fixtures, window displays and platforms, followed by choices of a lighting and electrical plan, a flooring plan and a graphic package and signing plan, he added.
The level of input retailers need depends on their situation, and depending on their needs, they may be able to forgo a designer in favor of an architect. Rather than going with a designer, Tack hired an architect to get plans for The Pet Beastro’s expansion going, something she thinks is a necessity for any business looking to grow.
“Our architect dealt with putting the blueprints together, submitting them to the city and dealing with all ordinances required,” she said.
Learning From Mistakes
A few years ago Kathy Blackadar, co-owner of Finn Furr & Feather in Hanover, Ma., grew her store from 2,000 to 3,000 square feet, and the results were so positive that she’s already envisioning another expansion to 5,000 square feet.
“You have to compete with the big boys,” she said. “We wanted to keep up with the expanded competition around us, with the PetSmarts and Petcos moving in. The more up to date you are with fixtures, presentation and marketing, the better you will be able to keep up with the times on all merchandising decisions.”
This time around, Blackadar said she will learn from past mistakes and expectations, and be more realistic with her timetable and budget.
“It’s always going to cost more and take more time than you think it will,” she stated. “I wrote down what I thought was a realistic plan, but it still was over budget and took longer because you can’t foresee every bump in the road.”
One of those bumps involved floor tile installation. While she was putting tile in the new area, she ran out and couldn’t find an exact match to the rest of the store.
“In hindsight, I wish I would have planned the flooring needs a little better, and we wouldn’t have run into that,” Blackadar noted. “It’s a minor thing, but because of time and budget, we needed to press on with something else. Customers may not notice, but I do.”
Performing due diligence can also save would-be renovators from regret. The Pet Beastro’s Tack said she wishes she had done a little more research on the companies and products she was dealing with, adding that she often looks back and thinks of questions she should have been asking at the time.
Sometimes, the overall expansion goals can be met, while specific details may go unnoticed until after the project is completed. Laurie Wilson, owner of Teca Tu—A Paws-Worthy Emporium and Deli in Santa Fe, N.M., expanded the back of her store last year, going from 1,500 square feet to 3,000 inside of a mall. For her expansion, it was as simple as working with the mall architects and telling them what she wanted.
“Our main reason for expanding was to carry food, because we hadn’t carried that before,” she stated. “It definitely has brought in new customers and our business is having its best year ever.”
However, Wilson added that she didn’t think enough about lighting, and the new section has florescent lights, while the old part has track lighting. This is something she plans to fix eventually to make everything cohesive.
Transition and Reinvention
In some cases, retailers may choose a redesign as a time to also rethink their business models entirely. When Vanessa De Leon, interior designer and president of Edgewater, N.J.-based Vanessa De Leon Associates, was called in to lend her expertise to expand You Lucky Dog in Hoboken, N.J., it was going from a human clothing boutique to a dog boutique store.
“We consulted over the overall theme for the store, and then I acquired the demographics for the area,” she noted. “I really decided to hone in on a unique design with attention to detail.”
Additionally, making a move can offer the chance to expand. In some cases, easily acquiring more retail space may entail moving to larger buildings. Corey Samuel, president of Paws & Claws Pet Nutrition Centre in Windsor, Ontario, Canada, would have loved to expand his three stores, but the retail environment in his country wouldn’t allow him to do so.
“The vacancy rates in Canada are really low, so if you waited for space to open up to expand, you would wait forever,” he said. “We needed our stores to have a bigger footprint, so we had to move them. They were all at 2,000 square feet, but then we moved up to the 6,000 to 8,000 square foot concept.”
Practical Tips for Retailers
When dealing with architects, contractors or manufacturers, getting quotes from different people and seeking out the best deal is smart business.
“I had three to four different electricians, and the one I wanted was a little more expensive, but he was willing to work with me,” The Pet Beastro’s Tack said. “People are hungry for work, so don’t be afraid to talk with them.”
Getting a remodel or expansion right means focusing on more than just the goals of the project. Businesses need to expand with all the proper building permits and licenses, Finn Furr & Feather’s Blackadar reported, adding that she has seen cases where businesses tried to get away with something, and exposed themselves to negative consequences.
“You should do it the right way regardless of how difficult and complicated it may be,” she said. “Don’t cut corners, because you may get away with it once, [but] it’s not worth it if you don’t. It pays off in the long run in peace-of-mind and money.”
However, one of the big obstacles to expansion, and one of the first questions to be answered, involves understanding costs and benefits. Retailers considering expanding should analyze the financials first, Pacific Store Designs’ Miller said.
“You should at least have $400 per square foot per year in a facility, with a net profit of at least 10 percent,” he stated. “Then you can look in the mirror and know it makes sense to expand.”<HOME>
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