A Guide to Leasing a Retail Storefront for Rent
Your business is taking its next step in growth and considering a storefront for rent. This is an opportunity to give your expanding business a street presence and create foot traffic for your brand.
With a storied history in businesses worldwide, storefronts have significantly evolved. Once defined by a simple awning or bay window, modern storefronts feature elaborate displays highlighting merchandise. Despite their evolution, one characteristic has always remained true: storefronts attract the attention of passersby, help to drive business, and increase brand awareness.
Investing in a storefront for your business is one of the most critical growth decisions you will make as a business owner. As you decide whether this is the right move for your business, this article will provide a helpful overview defining storefronts, share the importance of storefronts for retail businesses, cover the pros and cons of leasing a storefront, and teach you step-by-step how to lease a storefront.
Covered in this article:
- Storefront for Rent: A Guide to Leasing Retail Storefronts
- What is a storefront?
- Why is Renting a Storefront Important in Business?
- Types of Businesses that Benefit from a Retail Storefront
- Storefront for Rent: Pros & Cons of Leasing a Storefront
- Find the Perfect Storefront for Rent for Your Business
What is a storefront?
A storefront displays retail products in an environment where customers can peruse and purchase goods in-person. Storefronts typically feature a facade or entryway of a retail store located on the street level or ground floor of a commercial building. Because a storefront’s primary function is to attract the visual attention of potential customers passing by, most storefronts include one or more exterior-facing display windows. Storefront displays can take the form of a brick-and-mortar store in an enclosed mall or outdoor strip mall and may vary based on the needs and offerings of the retailer.
A retail storefront can be a valuable tool for marketing your business because customers can see and handle your inventory in person, leading to higher sales. For many businesses, a storefront is the first impression of a brand for new customers. Lack of a storefront or poor strategy behind storefront design can result in decreased sales due to customers choosing to shop at another competitive store.
Why is Renting a Storefront Important in Business?
Renting a storefront is essential for businesses because physical stores remain a significant player in the retail industry. According to retail statistics, physical stores are expected to account for 72% of all U.S. retail sales by 2024. A physical storefront offers several benefits, including increased visibility and foot traffic, creating a branded experience that is challenging to replicate online, and establishing credibility.
- Increased visibility – window shoppers are very common. If your products are visibly on display, customers are more likely to be enticed into the store.
- Establishing credibility – despite your best advertising efforts, people may not know about your brand until they see your physical storefront. A physical location establishes credibility and will encourage people to stop in and take a look at your product.
- Brand recognition – a storefront will be one of your best forms of advertising. A physical display of your products will do more than most online ads ever can. Plus, if people have seen your online ads, they will experience brand recognition and be drawn into your physical retail store by an attractive storefront.
- Creating a branded experience – great lighting, custom displays, and welcoming sales associates offer an in-person opportunity that e-commerce will never be able to compete with. With an in-person storefront, you can give customers a feel for your brand through the vibe and personnel you create.
- Showcasing products and services – physically trying and touching items in a store makes customers 3x more likely to make a purchase. With an enticing storefront, you have the opportunity to draw customers in to touch and feel your products before they purchase–something online retail will never come close to.
- A physical store can lead to more purchases – the ability to try on clothes or pick up and feel electronics helps people feel connected to a product, making them more likely to purchase.
- For some shoppers, brick-and-mortar seems more secure than shopping online – remember, your customers may be from all different generations meaning that brick-and-mortar stores often make for a more comfortable shopping experience than online retailers. Capitalize on this with stellar customer service and helpful in-store sales associates.
- Generating foot traffic – assuming you can acquire a storefront in a high foot traffic area, your storefront will help generate foot traffic and greater brand exposure. While it can be challenging to stand out online, a physical store provides the opportunity to deliver a powerful brand experience.
Types of Businesses that Benefit from a Retail Storefront
Retail store sales are thriving even in today’s e-commerce world, underscoring the significance of investing in physical storefronts. Here are examples of businesses that can maximize revenue and customer loyalty with a retail space:
- Retail businesses – there are countless reasons retail businesses still need physical storefronts. To name a few, consumers are more likely to buy a product they’ve seen, customer service increases sales, the brand experience still matters, and stores can reduce the cost of returns by mail.
- Restaurants/ Food – restaurant and foodservice come down to in-person customer service. Many restaurants are defined by the exceptional customer service of their waiters and waitresses. Further, the location of your food service business will impact its success nearly as much as the menu and service. If your restaurant is in the wrong place, you won’t attract the number of customers you need to stay in business. The same is true if your location is inundated with competitors, has poor visibility, or is hard to find.
- Health & beauty services – The physical location of a health and beauty service business is essential in creating a memorable experience for clients, as it can provide a sense of luxury and relaxation. Every element of a storefront, from calming aromatherapy scents to soothing background music, plays a vital role in enhancing the overall client experience. In addition, a skilled and attentive staff can make all the difference in creating a personalized and rejuvenating experience for clients.
- Service-based businesses like law firms, accountants, medical practices, educational services, and pet services – having a storefront can be highly advantageous for service-based businesses as it allows for face-to-face interactions with clients, which can build stronger relationships and enhance customer loyalty. This is especially important for businesses that deal with sensitive or complex matters where clients may require more reassurance. Meeting clients in person can also help service providers gain a better understanding of their needs, which can lead to higher customer satisfaction.
Storefront for Rent: Pros & Cons of Leasing a Storefront
As you consider the different costs of operating your business, it is essential to evaluate the pros and cons of leasing a retail space and whether the associated cost is worth it for your specific business.
Pros of Leasing a Storefront
- Storefronts often offer more space than other retail options: leasing a storefront can be a logical move if you need a physical retail space to operate your business. As a service-based business, a storefront can offer more space for client meetings and a more professional brand image. For product-based businesses, storefronts allow brands to host in-person events and exclusive sales for loyal customers.
- Flexibility to match space with brand identity: once you finalize your lease, the space is yours! Customize your physical location with new paint colors, custom-built displays, branded signage, and more. Not only will long-time customers easily recognize your location, but new potential customers will also be more likely to frequent your business if they align with your brand image and vibe.
- Accessibility: consider if your customers are located in the neighborhood or across the country and only accessible via the Internet. If customers are local, a storefront will achieve your goal of reaching the public. You may pay more, but remember that location is essential–weigh the cost of rent and the location based on the geographic location of your customer base.
- Networking and collaboration with other local businesses: there’s no doubt that your brand exposure will be greater with a physical location, but your interaction with other like-minded businesses will also increase. With a physical location, you can capitalize on joint networking events, shared promotions, and collaboration, which benefits your business and the greater community. Plus, associating with other trusted businesses provides increased credibility for new businesses.
- Credibility: A retail store provides customers with a tangible location to visit and experience the business in person, which can create a sense of trust and legitimacy. When customers see that a business has invested in a physical location, it can signal that the business is established and committed to providing high-quality products or services. According to Forbes, staff and clients can build a business’ reputation organically and a store front supports this by providing a space for employees and customers to meet, build relationships, and collaborate.
Cons of Leasing a Storefront
- Cost – The costs of starting and maintaining a retail storefront can be significant, depending on what type of storefront you want and the cost of the lease. Brick-and-mortar storefronts can be expensive since commercial rental rates are often pricey in high-traffic areas where more people would be exposed to your store. Also, when renting a physical storefront, shop owners may need to modify the space with new paint, flooring, and display structures, making the store’s layout more appealing. You also need to factor in the cost of paying sales associates to remain on the floor to greet, help and ring up customers. Prospective storefront lessees should also consider the rent percentage of income to calculate how much of their sales should go towards rent.
- Maintenance – not only will you need to clean and maintain product displays in a physical storefront regularly, but you also need to consider building maintenance depending on the type of retail lease. Consider small costs like paint or temporary build-outs and more considerable costs such as tenant improvements and expenses of a triple-net lease.
- Need for more security because of high traffic locations and visibility – sometimes, the best downtown locations have undesirable downsides. Increased foot traffic and busier areas mean you may need to install security cameras or have a security guard to protect your storefront at different times of the day, which will incur extra operating costs for your business.
- Lease restrictions – while you may have grand plans for the build-out of your storefront, ensure your desired tenant improvements are allowable with your landlord before signing a lease.
- Longer lease terms–many commercial leases are longer than one year, meaning your business is tied to that location for the lease term. Consider whether a commercial lease term is right for your business.
Find the Perfect Storefront for Rent for Your Business
Having a storefront location can sometimes make or break a retailer. Retailers must weigh cost with the value of a particular location for their core customer base.
Storefronts create coveted brand visibility, credibility, and accessibility while providing expanded square footage and increased sales.
If your business is considering a storefront for rent, working with professional leasing agents and selecting a credible landlord is critical.