Thinking Small: Pros & Cons of Retail Stands

You’re about to open a store? Consider the option of a retail stand in a shopping mall. These have lower rents and many commercial advantages, but you should also be aware of their disadvantages.

  • The Marker magazine
  • Aug. 2013
  • Lior Koren
Halperin Optical’s (an eyeglasses chain) new retail stand in Be’er Sheva’s Grand Canyon Mall.

When trying to decide whether or not to open a store, consider the possibilities offered by a retail stand. Retail locations “outside the store” have high potential and their inherent drawbacks can be addressed with the correct design and planning.

Retail chains often chose to open retail stands instead of stores. In Israel, examples include Magnolia (a jewelry chain), Laka (a nail salon) and Re-Bar (a juice company), cellular companies, and many others. Retail stands can also include fast-food stalls, stands selling fashion accessories, etc., that can be found at different recreation locations in Israel and abroad.

The main advantages of retail stands include:

  • Location on a customer’s path through the shopping mall and complete display of almost all the available products without the customer needing to decide to enter the store, which usually means deviation from his path, stopping to look in the store window, and entry into and exploration of the store. A retail stand is “on the way” and the product display is “by the way,” which also enables a customer, who had not intended to shop, to see the products.
  • Lower rent in the majority of cases, compared to a standard store with potentially similar customer traffic.
  • A message of a potential shopping at an attractive price. The seller at a retail stand has lower outlays, which means customers likely will pay less (they subconsciously perceive it’s like shopping at a market).
  • Communicates specialization. A retail stand usually sells a narrower range of products and services, unlike department stores, and the expectation is that they have a deeper professional understanding and better supply in their narrow retail field.
  • The option to move the stand. If the retail stand does not meet expectation it can moved to a different location.
Danbar Toys’ interactive retail and play stand concept for remote-controlled cars, which has been installed in 15 shopping malls across Great Britain.

Retail stands also have inherent drawbacks and problems that must be addressed in the design and planning stages so as to not hinder the stand’s success.

  • The products are perceived as cheap, which is not a problem in the food industry but is a real challenge in the fashion industry, for example. When a customer enters a store it is easier to create a luxurious atmosphere that sends the message that a store sells high value products. A stand provides fewer display and branding opportunities, such as walls, furniture, etc., to enhance the shopping experience, so careful planning and design are necessary.  The location of set and alternating signage and communications, display height, color, material and lighting are all important. All these decisively affect the quality of the customer experience.
  • Dependence on the host location – the shopping mall. Professionally managed shopping malls provide necessary infrastructure. The climate control, lighting, flooring, storage facilities, “environmental noise” such as background music, parking facilities and all the other surrounding conditions will all impact the shopping experience.
  • The initial set-up costs are higher than for a store, when only comparing the costs based on floor space. When calculating the costs versus the benefits, the retail stand is a better deal every time.
  • High potential for theft. Products are displayed along 360o with no walls, which makes a stand feel more vulnerable to theft but with proper planning theft can be avoided. It is best not to put all the products in display cases because this will reduce sales, but some of the merchandise can be displayed behind glass. Other merchandise should be placed in such a way that the seller has full view of the customer’s interaction with the products, which also allows sample merchandise to be placed on the counter, in the open. A judicious mix of these types of display will maintain the stand’s open and inviting look but significantly reduce the possibility of theft.
  • The opening and closing times at the beginning and end of the day must be taken into account early in the design and planning processes and be part of the construction. A stand can be completely closed as part of simple daily operations. The solutions range from canvas to interlocking panels to a lockable screen – all these must be properly designed from the outset, otherwise it will become an operational problem. The solution to close the stand and store and lock it up at the end of the day will impact on the need to remove the display at the end of the day, how and where to store and/or transport the merchandise on a daily basis.
  • Difficulty in increasing supply. Over the life of a business there is always a desire to increase the offered range of products and services to increase sales. It is possible and preferable to design modular solutions that will allow an increase in the display area in the future by proper preparation for future additions.
  • Merchandise changes require display changes. Appropriately addressing the stand’s retail area can be done during the planning stages by creating a modular solution to accommodate future changes. Just like with a store’s shelving system, a retail stand’s shelving set up can be changed, etc.
The shopping mall retail stands operated by NSB, an Israeli cosmetics company, which are intended for the Chinese market.

To sum up: if setting up a retail stand is relevant to your industry, it is an alternative you should definitely consider. You should consider the limitations of a retail stand that require special attention compared to a store. The quality of the initial design and planning is crucial and will significantly influence the stand’s daily sales, ease of operation and maintenance, and the customer’s shopping experience.