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Rent at World Square Sydney & SEO

Why Brick & Mortal Retailers in 2015 still need to lift there game.

Theiconic.com.au had a considerable increase 30%+ in sales off a high base in January 2015. This impacted on many Brick & Mortar retailers’ online January efforts and resulted in several having their first negative sales month in years.

The rent paid by retailers at World Square in Sydney is relevant to Search Engine Optimization (“SEO” (SEO is the art of increasing your ranking or position on search engines like google)). How is SEO relevant? Firstly let us review rent paid in early 2015 at World Square, Sydney CBD.

Why is rent relevant? Brick & Mortar retailers make significant financial commitments when they Lease a store. Brick & Mortar operators understand rent or occupancy costs as it is an integral component of their business model. That said the rental commitments are huge, i.e. CottonOn committed to pay the Landlord (Brooksfield) circa 4M when executing their Lease at World Square. See table below:

Retailer Monthly Rent Annual Rent 5 Year Financial Commitment
GlueStore (Next Athleisure) $24,416.83 $293,001.96 $1,465,009.80
Coles $166,391.25 $1,996,695.00 $9,983,475.00
Hugo Boss $24,753.19 $297,038.28 $1,485,191.40
CottonOn $71,676.19 $860,114.28 $4,300,571.40
Hype DC $45,138.62 $541,663.44 $2,708,317.20
General Pants $30,599.25 $367,191.00 $1,835,955.00
ForeverNew $51,578.40 $618,940.80 $3,094,704.00
Rebel Sport $41,751.87 $501,022.44 $2,505,112.20
JBHiFi $53,767.49 $645,209.88 $3,226,049.40
Superdry $32,730.20 $392,762.40 $1,963,812.00
GStar $56,266.90 $675,202.80 $3,376,014.00
Peter Alexander $29,022.67 $348,272.04 $1,741,360.20

*We have taken paid Jan or Feb gross rent incl outgoings & gst and annualized ** We have taken paid Jan or Feb gross rent including outgoings & gst and calculated the 5 year standard lease without including annual increments.

The same courage or understanding that Brick & Mortar retailers have in their traditional model when committing to rent is rarely translated to their online strategy.

For example if the G-Star World Square retail outlet is not generating sales in excess of 4M per annum then there will be countless meetings and significant effort by all in Denim Enterprises to improve the G-Star product, the customer experience & sales. In short no stone will be left unturned by G-Star in the pursuit of budgeted sales for their World Square retail outlet.

So back to the question: why is rent relevant to SEO? Because rent by their nature set benchmarks and standards for a Brick & Mortar retailers. So though Brick & Mortar retailers are willing to make enormous financial commitments i.e. all of the above commitments are in excess of 1.4M. That same level of zealous commitment and passion is not translated to SEO or a Brick & Mortar’s online presence.

The enormity of the 5 Year Financial Commitment in a Lease means the retailer has to get it right.

However with respect to Brick & Mortar retailers the drive to be the best in class in online is often rhetorical and rarely driven in the same uncompromising manner as the traditional retail model. This attitude or lack of forensic care continues to open the door for the pure online plays or sharp operators like beginningboutique.com.au who treat SEO uncompromisingly – like a long term rent commitment. They will make mistakes but move forward regardless.

Retailers who uncompromisingly demand success online and then make sure it happens regardless of obstacles or issues they will invariably confront, will ultimately win greater online sales which translates to more customer’s instore.

Invest 4M in SEO over 5 years like G-star committed on rent and you must increase sales by 30M over the same period. In the event those benchmarks are not achieved Brick & Mortar retailers must adopt the same zealous approach as they do with an under-performing store “let’s leave no stone unturned”.