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.
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
Retail and real estate are two primary industries that can benefit from site selection analysis.
The selection of a retail location involves an in depth analysis including factors like foot traffic, potential capture rate, and competitive intelligence. 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. Read our detailed guide to retail site selection for more information.
For real estate investors, foot traffic and migration pattern data are critical inputs to understanding the potential of a new location. Read the Unacast guide to real estate site selection.
Financial services and other industries looking for branding or investment opportunities in high foot traffic areas can also benefit from site selection analysis. With the right data, you can ensure that you'll reach the right demographics for your business. Read more about Unacast's site selection solution.
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.
