America stands to lose 147 million square feet of retail space this year. That’s according to Wall Street brokerage firm Credit Suisse, which released a research report this spring that revealed some pretty grim stats for big retail. It’s possible, Credit Suisse says, that more than 8,600 brick-and-mortar stores will close their doors in 2017. By comparison, the worst year on record was at the height of the Great Recession in 2008, when 6,163 stores closed. These 2017 estimates are shocking by any measure.
But then again, they’re not. The storefront retail industry has been reeling for years as people shift to online shopping. Small business has been hit hard by online shopping (roughly 74% of small business websites have no e-commerce element at all), but big retailers have felt the hit, too. Online retail giants like Amazon (and others) have flooded the market with competition. A single brand finds it increasingly hard to keep up.
Then there’s the issue of remaining relevant. Today’s market gobbles up new and unique “craft” products (food, beer, home furnishings, etc.), and shies away from historically trusted brands. Campbell’s Soup has learned this the hard way. Today’s consumer wants organic, free-range, and fresh soup from a “hip” store like Trader Joe’s or Whole Foods. Condensed soup in a can with a prolonged shelf-life no longer speaks to the American shopper. Sales revenue proves that.
Regardless of the ‘why’, the point is that big stores and brands are closing up shop. And when that happens, it can either be a blow or a blessing for small businesses nearby. In other words, you can look at that empty retail space and say, “There goes the neighborhood,” or get creative about how to capitalize on it and boost your own business. We obviously suggest taking the second approach. Here’s how.
- Figure out where your business fits in.
Own a moving company? A cleaning company? Furniture consignment? Waste management trucks or rental dumpsters? Landscaping business? You’re in luck. Big retail leaves a huge mess when it leaves, and owners of the strip mall want it left as clean as possible to attract a new tenant. Your company might have something to offer.
Take it from the franchisees at 1-800-GOT-JUNK? Franchise owners regularly seek out store closings and secure contracts to load dump trucks with unwanted mannequins, shelving, racks, showcases, fixtures, and even merchandise. Cleaning out a huge store can take over a month, which is a lot of secured business. Got Junk trashes what they need to, recycles what they can (often for money), and takes a charitable deduction on the things they donate. Huge win all around just by seeking the right opportunity amidst one store closing.
- Show off what small business does best.
Small business does one thing very well: provide amazing customer service.
When big retail players shut down, shoppers first gravitate to the smaller retailers nearby. Now is the time to show off what small company customer service is like. Own a bicycle shop? Wow your customers with your knowledge on bike selection and fit, local bike routes, and training tips for cyclists at all levels. Own a restaurant? Take the time to get to know your customers, create new dishes, customize menus, and so forth. Show local customers that big box stores and chain restaurants have nothing on the personal attention and expertise they’ll receive at your business.
- Create something totally new.
Looking for some cheap (and big) space? You’ve got it now. Abandoned retail real estate can be a boon for a small company.
Consider Earth Treks, a company that operates rock climbing gyms. Earth Treks needs to find approximately 30,000 square feet and very high ceilings each time it seeks to open a new location. Constructing that space would be astronomical. Taking over an old KMart or Sports Authority location is not.
Are you a personal trainer seeking to open your own gym? A franchisee of a kids’ trampoline park? A building contractor who looks at an empty mall and sees high-end apartments? The possibilities for empty retail space are endless if you just have the right mindset.
The secret to staying in business for the long haul is adapting to the changing market. That’s it. You must continually monitor and evaluate consumer and economic trends, and make adjustments over time to keep up with them. Keep an open mind and an open heart. Your next opportunity may be right around the (abandoned) corner.
