Pros and Cons to Operating in a Mall vs. Stand Alone

Posted on March 4, 2020 by Carm McCormick
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Pros and Cons to Operating in a Mall vs. Stand Alone

Posted on March 4, 2020 by Carm McCormick
 

Struggling to find the right type of retail space for your next brick and mortar? You may just belong in a mall…or do you?

Setting up a store in a shopping mall or stand-alone storefront both have their respective pros and cons, depending on several factors like cost, landlords, accessibility, customer experience, security and brand awareness. Choosing the right type of space is an important factor in the long-term success and growth of a business, especially if you’re looking to scale from three stores to fifty. 

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

What to consider 

Setting up a store in a shopping mall or stand-alone storefront both have their respective pros and cons, depending on several factors like cost, landlords, accessibility, customer experience, security and brand awareness. Choosing the right type of space is an important factor in the long-term success and growth of a business, especially if you’re looking to scale from three stores to fifty. 

Shopping mall 

The primary objective of shopping malls is to bring together consumers and retailers in one convenient location. 

The pros of operating in a mall retail space

Because malls have evolved to offer more experiences and amenities beyond stores, people are flocking to malls to do more than just shop. Guests also visit to eat, explore new spaces, discover new brands or even see a movie. These changes have resulted in a variety of pros and cons. 

Here are a few main 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 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 cons of operating in a mall retail space

  • Competition often can be high, especially if there are similar businesses to your own, along with restaurants, curiosity shops, entertainment events and other distractions in the same vicinity 
  • 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 lack proper care and maintenance, making them less attractive and bringing in less business.
  • Sharing mall space with bigger retailers means small businesses working to grow their brand and physical presence may face struggles against these national big-box chains with bigger advertising budgets and a similar target audience.
  • 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.

Stand-alone 

There are times when it’s more beneficial to retailers to invest in stand-alone retail properties to help keep the focus on their brand.

The pros of operating in a stand-alone retail space 

Setting up shop in an independent, stand-alone space offers many pros, like:

  • Stand-alone business owners can set up their own rules and policies, which include operating days, hours and observed holidays. 
  • It allows businesses to take on more specific and targeted marketing campaigns without being folded into a mall’s larger marketing campaign.
  • Customers visit with 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 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. 
  • Businesses are sometimes responsible for additional tasks that include trash removal, recycling, ground maintenance and more, depending on their lease agreements.
  • 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.

Ultimately, the type of location you choose to operate your physical retail space out of will depend entirely on your individual needs and business goals. Both mall and stand-alone retail offer their own upsides and downsides, but carefully considering what your needs are for your retail space will help you make the right decision!

ARE YOU READY TO EMBARK ON DESIGNING YOUR NEXT RETAIL SPACE?

Whether you are launching your third retail store or your fiftieth, our professional and highly-skilled team of retail experts here at CBSF can help you develop the best strategy and design approach for your retail space and put it to work for your business. Let our team of seasoned experts help you elevate your retail presence. Contact us today to discover more!