Making the Right Choice Between Malls and Stand-Alone Spaces for Your Retail Location.

Setting up a retail store in either a shopping mall or a stand-alone storefront has its own pros and cons. 

And balancing factors like rental costs, landlords, anchor tenants, security, parking, transit, accessibility, customer experience, and brand awareness can overwhelm start-up retailers.

Choosing the correct type of space could be the most critical factor in a retail business’ long-term success and growth, especially if you’re looking to scale over time.

For many retailers, this all boils down to one fundamental question: “Should I operate my retail location in a mall or a stand-alone space?”

The benefits of shopping mall retail spaces

The main goal of shopping malls is to bring shoppers and retailers together in one convenient location. This means that mall visitors do not only come to shop but also to eat, explore new spaces, discover new brands or even see a movie. 

Operating in a mall has several key benefits, including access to existing customers, a steady stream of foot traffic, and potential opportunities to collaborate with neighbouring businesses.

Malls also typically have more amenities such as security services, parking, and public transit, making them more convenient for shoppers.

Here are a few pros of operating in a mall retail space:

• High visibility to multiple customers each day serves as a marketing strategy on its own
• Mall marketing campaigns allow each store to participate in and enjoy exposure from large-scale advertising and promotional events
• Some in-mall retail spaces may already have design features like shelving and light fixtures, while others allow for customization and flexibility in layout and design
• On-site management to take care of overall repairs, parking lot maintenance and security
• Reduces or eliminates the need to handle weather-related or landscaping responsibilities
• Lower utility costs are possible as some retail spaces can be smaller and require less power than a stand-alone retail business

The drawbacks of malls

There are also drawbacks to malls, such as rental costs, long-term lease agreements, and restrictions on store operations.

It is essential to carefully consider these factors when deciding whether a mall is suitable for your retail business.

The cons of operating in a mall retail space

• Competition often can be high, especially if there are businesses similar to yours, along with restaurants, curiosity shops, entertainment events and other distractions in the same vicinity
• Malls can prevent people from visiting who are short on time since they may need to park far away and walk a relatively long distance compared to visiting a stand-alone store with out-front parking
• Some malls are aging and need proper care and maintenance, making them less attractive and bringing in less business
• Must follow operating days and hours, including holidays, with those of the entire mall
• Higher rent costs, especially in larger, well-maintained and popular malls

The benefits of stand-alone storefronts

On the other hand, stand-alone storefronts offer more flexibility for retailers.

You can customize your store to fit your brand without worrying about the mall’s aesthetic or layout.

Additionally, renting a stand-alone storefront can often be cheaper than operating in a mall, making it an excellent option for start-up retailers.

Finally, stand-alone storefronts let you capture more local customers than malls, giving you more opportunities to grow your business in the long run.

By giving customers a reason to enter your physical store, you can leverage in-person selling tactics such as personalized service and product demonstrations that may not be possible through e-commerce alone.

Additionally, clicks-to bricks gives you access to valuable consumer data, such as their buying habits and preferences, which can help inform future marketing campaigns and strategies.

The pros of operating in a stand-alone retail space

• Stand-alone business owners can set up their own rules and policies, which include “open” days, hours and observed holidays
• It allows businesses to take on more specific and targeted marketing campaigns without being forced into a mall’s larger marketing campaign
• Customers visit with the intent to go to your store specifically; they’ve heard about your business from a friend, follow your business on social media, or have walked past and are curious
• Rent can be more cost-effective because a retailer can negotiate pricing directly with the landlord or by enlisting the help of a real estate agent or representative
• Retailers can invest in curb appeal that may include a business sign closer to the street, an awning featuring business information, window signs, banners and more

The drawbacks of stand-alone retail spaces

The biggest benefit to having a stand-alone retail space is also its greatest challenge.  It’s 100% on you and your business to build, brand, market, and draw customers in.

The cons of operating in a stand-alone retail space

• Lack of foot traffic and incidental stop-in visits may reduce potential exposure, depending on the location, accessibility, and parking. For instance, if you set up your store in a busy area with limited parking and a high volume of driving traffic, you may risk losing out on business because people can’t easily access your store
• Retailers with stand-alone stores need to do all of their own marketing, which means you can’t rely on or benefit from mall-wide promotions and marketing campaigns to attract your target market 
• Depending on their lease agreements, businesses are sometimes responsible for additional tasks that include trash removal, recycling, ground maintenance and more
• Utilities like electricity and water may not have fixed pricing, leaving the pricing in question from month to month, or the retailer may need to manage the setup and maintenance of utilities
• Local zoning may restrict or prohibit some retail activities
• Retailers are responsible for determining the type of security needed, whether an alarm system or on-site security personnel presence, then following through to protect merchandise, assets and any cash on-site

Finding the right fit for your business

Ultimately, choosing between operating in a mall or a stand-alone storefront comes down to your individual needs and goals. Before making a decision, consider your budget, the size of your target audience, and your long-term growth plans. Taking the time to research and weigh all the factors can help ensure that you make the right choice for your retail business.

Balancing factors for long-term success and growth

Whether you are launching your first retail store or your fiftieth, our professional and highly-skilled team of retail experts can help you develop the best strategy and design approach for your retail space. 

Let our team of seasoned experts help you elevate your retail presence.

Contact us today to get a project plan and quote.

What’s the future of retail?

Malls, as we know them, are changing. And many are changing not only to serve customers but to serve retailers, now and into the future. As the way we shop continues to change and evolve, retailers and malls must find unique ways to adapt to consumer needs. As a result, many malls across Canada are reinventing themselves not just for the short-term needs of consumers but for long-term demand, thinking ahead for the future of retail.

Explore the future of retail for both malls and retailers alike in our white paper, “Reinvention: The Saviour of Canadian Malls?”.