At a glance: site selection is a critical process for any business choosing a brick and mortar location. This post will discuss the factors of a successful site selection analysis and how Unacast can help businesses with the process of choosing their next location.
Your company's location may significantly impact its capacity to save costs, avoid risks, attract visitors, and grow.
However, choosing a business location is more complicated than finding an appealing lease in a buzzworthy area code. What appears to be a fantastic idea on paper may be detrimental to your organization if the proper site selection analysis process is not in place.
But first, let's define site selection and the process of a comprehensive site selection analysis.
What is site selection?
Site selection is the process of choosing the next physical store or location for a brick-and-mortar business.
Site selection analysis is the process of blending financial, demographic, and geographical research and data to identify the best location for your business. During a site selection process, businesses go through a detailed assessment to understand the potential advantages and disadvantages of a location.
A real estate firm or a company's real estate department may lead the site selection process, including leadership team members, data analysts, real estate investment managers, and even the tax and accounting unit. The site selection team will develop selection criteria and examine various quantitative and qualitative inputs to discover prospective sites that can help the company accomplish its long-term goals.
The importance of site selection
Investing in a thorough site selection process takes time, but the rewards are significant. Businesses that assess logistical issues and market and submarket characteristics of the planned site increase their customer reach and commercial potential, setting themselves up for success.
Including location data, such as foot traffic data and migration pattern data, in your evaluation can help you streamline your site selection analysis, whether you're a retailer searching for a new location, a franchisee determining where to invest, or a real estate developer investigating options for your next project.
Location data can provide insight into how many people are visiting a specific area, the demographics of those visitors, their cross-shopping habits, and their home and work locations. Without a proper examination of these critical aspects, you might choose a location that doesn't align with your target customers, or that has a declining population of your target customers.
To make the best site selection decisions, you need to know where people are and how they move. For example, if people continually move away from an area, while the location may be inexpensive, there won't be any consumers around to commercialize the opportunity.
Unacast gathers GPS data from smartphones where users provide opt-in consent. The data is analyzed and contextualized to provide accurate location intelligence for understanding population flows, foot traffic trends, consumer behavior, and more.
The Data Behind Site Selection Software
Knowing the importance of a site selection process is only the beginning. Building an efficient and successful site selection effort depends on cross functional consensus, expert analyses, and, crucially, starting with the right data.
There are several types of data that are fundamental to site selection, though their importance will vary depending on the industry and type of site needed. Those types of data include:
Demographic Data
Knowing who is in your target areas is a critical dataset. Pulling census information to understand the average ages, income levels, education, genders, marital statuses, ethnicities, types of employment and more will provide you with a baseline of who you can expect to visit specific site targets.
Foot Traffic Data
Knowing who lives and works in an area isn’t enough — it’s important to understand mobility patterns and habits. Foot traffic data provides a key insight into how people move through not just a single venue, but whole regions. It uncovers not just traffic numbers, but how often they visit, what days and hours they’re most likely to visit, and often where they’re coming from and where they’re headed when they leave.
Consumer Spending Data
In addition to mobility data for a specific region, consumer spending data helps build predictive models of how well a specific new business may fare based on whether or not dollars are already being spent on similar products or services in that area.
Consumer Preference Data
By leveraging targeted surveys, social media trends, and even localized web-search data, customer preference profiles for a specific region can be built and added to the site selection analysis. Moving beyond where potential customers go and how they spend their money, savvy data analysis can help forecast the next big thing for consumers in specific areas or how their sentiment may change over time.
Geographical and Historical Data
Depending on the type of site a business plans to build, layering in additional data like crime rates, planned construction, or even climate data may prove critical to choosing the right new location.
So which data type is the right one?
Most likely, a proper site selection effort will require several, if not all of them. By combining and layering these datasets companies expose deeper and deeper insights into the regions they’re targeting — empowering them to make more informed decisions.
The Top Site Selection Data & Software Companies
A successful site selection process will harness not only the appropriate type of data for your search, it will also source quality data, analysis, and tools from a provider that meets your specific needs. Finding that provider can be a challenge in and of itself, so here’s a quick look at some of the top location intelligence providers that specialize in site selection:
Unacast
With a focus on ethically sourcing a broad range of location and mobility data and expertly using machine learning to clean and stabilize the data to provide actionable datasets and insights, Unacast is a strong contender for meeting your site selection needs.
Carto
Created for modern location intelligence efforts, Carto is a cloud-native product designed to integrate with a modern tech stack.
Inrix
Initially focused on vehicle traffic data, Inrix has evolved and expanded their offering to provide a wide range of location data and analysis.
Quickbase
Quickbase is a process management tool for commercial real estate development that provides specific tools for that industry and links their existing tools to provide a unified platform and view of their business. One of those tools is a site selection tool.
Placer.ai
Placer AI specializes in consumer foot traffic. They harness mobile data from mobile devices and apply AI tools to generate accurate insights and behavioral predictions.
SiteSeer
SiteSeer is primarily a retail site selection analytics company, though they do serve a few additional industries. As a team of analysts and a suite of tools, their data is sourced from 3rd party providers and their clients.
Buxton
Buxton is a customer analytics focused company that includes site selection as part of its offerings. Their data and analytics are US focused and the solution is available as a SaaS offering.
Accruent
Accruent’s site selection offering is part of their larger suite of enterprise management software and promises a comprehensive solution for multiple aspects of your business.
Understanding trade areas for specific sites
Dynamic trade area analysis can reduce the risks of opening your new location by targeting the right people in the right place and ensuring optimum accessibility for your target customers. The Unacast dynamic trade area dataset analyzes the home and work locations of visitors and how those change with time. This can be used to analyze your competitors' locations and trade areas, and/or to identify gaps in the market where your location might be of benefit.
Combining location data with your own internal data gives a holistic overview when considering site selection. This is important for factors such as:
- Competitive intelligence to show saturated and unsaturated areas.
- Trade area accessibility analysis for residents and neighboring visits.
- Visitor patterns around a location to understand the potential foot traffic.
By deeply understanding the human mobility patterns in a given trade area, you set your business up for more success in your next location.
How to perform a site selection analysis
There are several steps to a successful site selection analysis.
Step 1: Ensure you have the right team
Before diving into the analysis, put together a team of stakeholders, including executives, operations specialists, real estate consultants, data analysts, and financial experts. Each of these groups can offer a different perspective on site selection.
Step 2: Know your purpose
Understand your goals in your next site. Is it brand awareness, incremental revenue, or something else? Having a clear goal will help you perform a site selection analysis for your specific needs.
Step 3: Gather data
Gather internal data around your prospective customers and competitors. Then layer on location data from a provider like Unacast to provide more in-depth points of analysis for determining your next location.
Unacast uses GPS data from mobile devices to gather location data for site selection. Pings from mobile devices are recorded and timestamped to provide data points around foot traffic trends, shopping behavior, home and work locations, and migration.
Step 4: Analyze the data
Synthesize your data to get a deeper understanding of your customers and prospective customers, and your potential new locations. Depending on your goals, this could include the following:
- Analyzing competitor locations and foot traffic
- Determining foot traffic to specific locations and neighborhoods
- Assessing demographic data and store gaps within a specific trade area
- Understanding population inflow or outflow in a specific neighborhood or city
- Considering accessibility to major roads and infrastructures
- Factoring in local economy and market data, as well as environmental factors that might impact the location
- Assessing lease or purchase price and potential costs of operating your new site
Analyzing this data will provide a complete view for optimizing your next site.
Step 5: Site selection
Visit your top potential sites and factor in the on-site needs, such as property aesthetics and required renovations. Choose your next site and start forecasting your potential demand with foot traffic data.
Site selection analysis by industry
While every business planning to expand their physical locations would benefit from a robust site selection process, in several industries finding the right location is critical to continued success and growth. For instance:
Retail
Determining a new location's foot traffic potential is essential to enticing potential consumers, but it's also important to include demographic inputs so your business attracts the right customers. This requires an in depth analysis that includes not just the foot traffic and demographic data but also consumer spending data and competitive analysis.
For example, a nation-wide retail brand faced the challenge of expanding into new markets after announcing plans for aggressive growth. By augmenting its market analysis with Unacast data, our client was able to identify new areas of growth, benchmark competitors’ visitation and foot traffic, and find gaps in the marketplace.
Want to know more? Check out our detailed retail site selection guide.
Residential Real Estate
When talking about site selection for real estate, commercial real estate is often the focus. But homebuilders are no less impacted by poor site selection. Without understanding mobility and migration data in addition to demographic, geographic, and historical data knowing where to break ground on the next successful apartment building or planned community is nearly impossible.
One of the top homebuilders in the US turned to Unacast to gain data-backed insights into the ever-evolving real estate market in Florida. Supplementing internal research and CRM data, our client took home two wins while partnering with Unacast — successfully pairing new housing demand with migration trend data from Unacast and aligning to nationwide trends that indicate high growth potential: new jobs, income increases, and migration inflows.
Commercial Real Estate
Much like retail site selection, understanding not just where potential customers are, but how they move through a region and where they choose to spend both their time and money is critical to knowing where to build the next big shopping center or event venue.
Our client needed to shape key investment decisions around local residents’ socio-demographic statuses and origin locations. Unacast’s accurate, granular, and curated data sets offered our client the key insights required to validate investments in select communities.
Planning your next commercial real estate investment? Our guide on real estate site selection empowers you to make informed, successful decisions.
The importance of site selection analysis for every industry
While the examples above show how critical a proper site selection process is in those realms, that doesn’t mean that other industries can’t benefit from this type of data analysis. With the right data and insights, you can ensure that you'll reach the right demographics for your business. Explore our site selection solution to see how this data can benefit your business.
Six key mistakes to avoid in site selection
Expanding a business is a complicated endeavor and each new phase brings its own set of challenges that can derail the process. When it comes to data and analysis there are six mistakes that can sink your efforts before you even begin.
1.Not accurately determining your location criteria
It’s not enough to know that now is the right time to expand. Making sure your company understands what will make new locations successful before beginning the search helps create an efficient site selection process and can mean a quicker return on your investment.
2. Not prioritizing location criteria
Knowing not only which criteria to use for site selection, but their relative priority and how they impact your success helps businesses know where to search and how to weigh both positive aspects and warning signs for potential regions.
3. Not securing cross function and executive buy-in early
Trusting your experts and the quality of your tools to help you find the right location may not be enough if you simply present the results of a finished site selection process at the end. Having a full understanding of assumptions and rationales from the beginning helps build trust in your process and your results.
4. Not considering the impact of important factors
Even with a thorough and prioritized location criteria list, there will be important factors you haven’t previously considered as you identify target areas and analyze the data. Make sure your company keeps an open mind to the insights revealed during the site selection process and adapts accordingly.
5. Ignoring critical demographics
While income data may seem like the most important aspect of a region’s population, there are multiple demographic factors that impact not only if a population can afford your products and services, but if they have the time or desire to.
6. Ignoring emerging trends
Historical data can unearth incredible insights while evaluating potential regions for expansion — but just as important as how a population has behaved in the past is how they’re signaling future behavior changes. No location is stagnant and building accurate trend forecasts for a location is critical to both its initial and long-term success.
Summary
Unacast can help companies run a successful site selection analysis.
Book a meeting with Unacast to see how we can deliver innovative and dynamic location data. Work with our team of data scientists to get the perfect view of the data for your needs. If you're ready to level up your data game, speak to Unacast today and ask about a free data sample.
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