The United States has always been a haven for small businesses, particularly those operating in the retail space. But with the age of the Internet and an eruption of countless choices for consumers, these once-thriving retail stores are now closing their doors in scores—a trend that’s left many business owners wondering what went wrong.
Interestingly, the answer can be found in Scandinavian countries, which are regularly home to “social utopias.” Let’s take a look at how their retail stores differ from those in the US.
Focus on Community, Not Profit
Retail plays a critical role in a social utopia, whether or not we consider it to be a crucial element of our happiness. Notably, Scandinavian retail stores focus more on the community than profits. Consider these differences: some malls offer libraries that look like Apple stores, while others feature recording studios.
While it may seem counterintuitive to construct places that don’t encourage consumers to spend money, these countries have found time and time again that people crave community—and within the community comes the desire to spend money on retail outlets they genuinely like.
With this in mind, many retail centers in the US could stand to be repurposed. While this decision is typically framed in terms of cost, Scandinavia shows us that it should instead be steered by a conversation concerning both social and financial benefits.
Retail centers should be created with the intent of fulfilling a need for the community. In this case, it may require taking a step back and providing residential and commercial space first, and retail space second. While this might seem counterproductive, the truth is that a demand for retail is inherent in residential areas. As one expert noted, the Internet didn’t kill the high street—mediocrity did.
Getting Your Business Off the Ground
Scandinavian retail centers emphasize the following truth: retail isn’t about the money—it’s about how we want to live.
Of course, as much as we say it’s not, retail is at least a little bit about money, especially in the short term. Between startup costs and other financial hurdles, it’s easy to see how a retail store can flounder under pressure. Although the business emphasis is on the long term, it can be difficult to see beyond the first few weeks as a startup.
As a result, it’s important for towns to create an individual identity based on what their residents really want instead of following a standard template. And rather than taking a shot in the dark based on what you think your residents would enjoy, we recommend doing some research—take a look at comments on social media in town forums to see what people are clamoring for. If your business fills a desired gap, you’ll be golden.
Retail today is all about providing an experience in addition to offering a much-needed service. If the US can follow Scandinavia’s example by providing retail spaces that center more around community and less around profit, then retail businesses should ideally begin to boom again. Prioritizing community over business may seem far-fetched at first, but it really speaks to the age-old mantra of supply and demand—only supply what your residents demand.
If you’re looking for new retail space, Murphy Commercial Real Estate has decades of experience to help you find what you need (in a location that promotes community like in Scandinavia!).
Contact us today for more information on how to create a thriving retail center.