Choosing where to open a new retail location is one of the biggest decisions a growing brand can make. A promising site can put you closer to the right customers and strengthen an existing network, while the wrong one can leave you committed to a location that never quite delivers what was expected.
Experience and instinct inevitably play a part, particularly when a business knows its market well. But they become much more useful when supported by evidence.
Location Intelligence allows retailers and franchisors to compare potential locations using demographic, customer, competitor, accessibility and movement data. It can also help them learn from the locations they already operate rather than assessing every new opportunity from scratch.
Here are five factors worth considering.
1. Demographics and customer fit
Population size alone doesn’t tell you whether there is enough relevant demand for your business.
Age, household composition, employment, income and affluence can all provide useful context about the people living within a potential catchment. Consumer data can add further insight into interests, behaviours and lifestyle characteristics.
The important question is how closely the area matches the customers the brand is trying to reach.
For an established retailer or franchise, its own customer data can make this analysis considerably more useful. Looking at the characteristics of customers around successful locations can help identify patterns and provide a basis for comparing potential new markets.
It isn’t about finding an identical demographic profile every time. It’s about understanding which characteristics appear to matter and whether there is sufficient potential demand within the proposed catchment.
2. Competition
Finding competitors nearby isn’t automatically a reason to reject a location.
Their presence may indicate that there is already strong demand for the type of product or service you provide. In some retail categories, competitors deliberately cluster together because customers are attracted to destinations where they can compare several options in one visit.
The opposite can also be true. A location with few competitors may represent an underserved market, or it may simply lack sufficient demand.
Mapping competitors alongside customer, demographic and movement data can help put their presence into context. Rather than asking “How many competitors are nearby?”, the more useful question is “What does the competition tell us about this market?”
3. Accessibility and movement
A prominent high-street location isn’t necessarily more accessible than an out-of-town retail park or neighbourhood centre.
How easily customers can reach a site depends on the type of location and the way people travel to it. Road connections, public transport, parking and journey times may all matter, but so can the way people already move through the surrounding area.
Footfall and movement data add another dimension because they help show when people are present rather than simply how many people live nearby.
The timing can be particularly revealing. A location that is busy during weekday commuting hours may offer something very different from one with strong weekend or evening footfall. What matters is whether those movement patterns fit the way customers are likely to use the business.
4. Commercial viability
A location can look excellent from a customer and accessibility perspective but still fail to make commercial sense.
Property costs, rates, staffing requirements and other operating expenses all need to be weighed against the opportunity a site represents. A more expensive location may be justified by the potential market, while a cheaper site isn’t necessarily better value if it provides poor access to the customers the business needs.
Location Intelligence can’t predict whether a site will be profitable. What it can do is provide evidence about the market surrounding it, allowing commercial considerations to be assessed against factors such as customer potential, competition, accessibility and movement.
This creates a much stronger basis for comparing locations than rent or property costs alone.
5. What already works for your brand
One of the most useful sources of information for a growing retailer or franchisor may already exist within its current network.
Why do some locations perform particularly well? Do they share similar customer profiles, catchment characteristics, competitor environments or patterns of footfall? And are there locations that look similar on paper but perform very differently?
Comparing existing sites can help identify the factors that appear to contribute to performance. Those characteristics can then be used to investigate potential new areas.
There is an important distinction, though. The objective isn’t simply to find another place that looks exactly like your best-performing site. Every location has its own combination of customers, competitors, accessibility and local demand. Existing performance provides evidence to learn from, rather than a formula to reproduce.
Look at the factors together
None of these metrics should determine a retail location decision on its own.
A site with excellent demographics may face intense competition. A location with high footfall may attract the wrong audience. An apparently underserved area may lack sufficient customer demand. And somewhere that resembles an existing successful location may behave very differently once accessibility and movement are taken into account.
The value comes from bringing the evidence together and comparing potential locations consistently.
Periscope® combines location, demographic, customer, competitor and movement data to help retailers and franchisors understand their existing network, investigate potential markets and build a stronger evidence base for expansion decisions.
