For as much as we all hear about the tumultuous retail landscape, there are plenty of positive signs:
- August marks the fifth straight month of retail growth in 2023, above economists’ expected 0.2% increase.
- Some analysts are feeling more confident in the U.S. economy, with Goldman Sachs lowering its estimated chance of U.S. recession over the next 12 months to 15% (from 35% in March).
- Retailers have announced plans to open 4,500 new locations while closing 3,500 as of August 2023, per Coresight Research.
If your retail chain has managed to expand and perform in the past several years and added new locations, you might be here in search of advice on how to maintain that momentum. You’re not alone! Retailers often turn to SiteSeer when they’ve grown and experienced success but know that their methods could be better.
Many chain businesses we work with see an expansion pattern like this:
- They open a store/business/restaurant that does well.
- They decide to grow that concept and begin opening additional locations or franchising regionally.
- They begin their expansion in the market they’re familiar with, choosing their next location(s) based on the guidance of a real estate broker and their general familiarity with the area.
- Those new locations are sometimes successful, sometimes not.
- The retailer starts to realize that their approach to opening new stores or locations is less data-driven and more “gut-feel” driven.
Solid data drives better location decision-making
Let’s be clear: growth is growth! Whether you’ve opened five or 25 new locations successfully, it’s clear you’re doing something right.
You have an excellent product or service that people want to buy. You know your customer and have opened physical stores/locations in areas where you foresee demand (i.e., where you have a lot of potential new customers).
The biggest misstep we see with retail chains that expand quickly? Wrong assumptions. Retailers don’t rely as much as they should on solid data or research tools to guide their decisions. Examples:
- They might incorrectly assume there are plenty of their target customers in the trade area of a future location or store without fully scoping the demographics and development of the area.
- They might underestimate the strength of their competition in the trade area or overlook other competitive threats.
- Sometimes, retailers moving into a new market misjudge how people there will respond to their concept.
Data about your existing stores or locations can help your new locations succeed
When we talk with growing retailers about how to deploy data analytics as they enter their next phase of growth, we mean both third-party data and your own data about your current customers. Retail chains with existing locations have a big advantage over new retail concepts: they already have people who like and buy what they sell.
Continuous data about your customers can dramatically improve your future market and site decisions. You can use that customer data to understand spending trends, develop a demographic profile of your customers, compare your locations’ performance, understand your busiest and least busy seasons, and much more. If you conduct any kind of customer surveys, you can also get a sense of what your customers like and dislike and why they’re loyal to your business.
Is customer data enough to inform new site selection decisions? (Short answer: no.)
In the longer term, you need more data than just your target customer profile to succeed as you expand—especially if you’re moving into new and unfamiliar markets.
When you know what type of customer you’re going after, third-party data can help you can make sure you only consider locations where those individuals are located.
- Demographic data gives you population information and consumer data—everything from age, education, and employment data to household size and income data.
- Mobile location data collected by people’s smartphones offer insights into how people move throughout their days. Knowing where they live, work, spend their lunch hour and dinner hour, spend free time, etc. is invaluable for retailers that want to serve those customers.
- Psychographic data gives you insights into people’s lifestyles, brand preferences and more.
SiteSeer has partnerships with many different data providers, so even smaller retailers can get access to this data at prices they can afford. Data is great, but being able to analyze it in a way that is actionable is important. SiteSeer allows you to do exactly that, so your location decisions are based on good data and solid analysis, not just your intuition.
Now is the time to grow more intelligently
You’ve grown successfully so far. It’s time to step up your retail research with quality tools that let you analyze your existing stores or locations, thoroughly evaluate markets you’re considering moving into, assess your competition, forecast sales for potential sites, and open only locations that have a high likelihood of long-term profitability and success.
Take SiteSeer for a spin
Demo SiteSeer to learn how our location intelligence platform can help you vastly improve your site selection decisions.