There are so many different types of analytics that companies can utilize to ensure the success of their business. No two forms of analytics are more powerful than site selection analysis driven by location intelligence. If you haven’t had a chance to look at our last blog post, then you may not know what this powerhouse solution is. Site selection analysis is exactly what it sounds like: analytics about the site where your brick-and-mortar location is going to be or already is. Everything from competitors in the area to the consumers who live in the neighborhood.
Here are some interesting reasons why you should do a site selection analysis, whether you have an established location or are in the market for one.
The Established Location
Maybe you are a shop that has been in the same location for the last five years. You know that location like the back of your hand: when the rush starts and stops, your target customer, the competitors in the area, and when to stock certain products. You’ve never had to do very much in the way of analytics except for keeping track of revenue, and the occasional foot traffic analysis around the holiday season.
Then 2020 happened. The coronavirus pandemic closed your doors for a couple of months as you sell luxury cosmetic products and were deemed non-essential. When you re-opened, you expected things to go back to normal, in fact, you expected a rush as people came in to re-up the products that they may have used up in quarantine. This isn’t happening, however, and as the weeks go by, you’re left scratching your head as to what went wrong.
A site selection analysis will tell you that the usual demographic in your area has changed drastically. Because your shop is located in a suburban part of town, more younger people from the city have recently moved into the neighborhood, and your ads really only cater to middle-aged women. The analysis will also tell you that while you have been closed, a new big-box retailer moved in just a quarter-mile away from you. With this information, you have the data you need to readjust your strategy to engage that millennial audience and compete with your new neighbor.
Looking for a New Location
What if we change the above narrative and now, you are the same luxury cosmetics brand but are now looking to expand and open a store in a new location. Because you use a location intelligence tool to get to know your customers, you know that your target audience is middle-aged women who have an interest in fitness and especially in athletic wear. There’s a lot for sale in a seemingly perfect location: affluent, a large and busy gym down the street, and a specialty cycling studio that’s only a few blocks away, with several athleisure stores in the vicinity.
Everything looks great and you’re nearly ready to sign on the dotted line. To be safe before you commit to anything, you run a site selection analysis on the location. What you discover has you wiping your forehead with relief that you didn’t sign on the dotted line after all.
While the location seems perfect on the surface, you discover that as affluent as the neighborhood may be, it primarily consists of senior women who likely already have an established cosmetics brand that they use and therefore would be very difficult to market to. Not only this but there are four competitors less than a mile away plus a department store that you would have to compete with as well. When analyzing the higher traffic areas, you realize that the athleisure shop that gave you hope really only caters to tourists as the locals likely would never wear what they sell. In the end, because of the site selection analysis, you can see that it would cost you more to compete with the other locations and attempt to convert the already established routines of the locals than it would to just find a different location with better potential outcomes.
Site Analytics is a Must-Have
Let’s be honest, data analytics saves brands money. Whether that is by narrowing down a target audience and the appropriate times to send ads, therefore, reducing ad-spend, or analyzing your foot-traffic data to determine how many people to have on the clock and at what times saving you in labor costs. There’s no denying that site selection analytics, of all analytics, falls into the must-have category because it can help brands refine their go-to-market strategy according to whatever is happening around them, likely saving them more money than any other form of analytics on the market today.
If you are interested in learning more about the benefits of site selection analytics driven by location intelligence, contact us today!