Don’t leave your success to chance
For retailers, professional services providers or any other business utilizing a bricks-and-mortar channel, selecting your location(s) without access to high-quality market data is a roll of the dice. In today’s hyper-competitive marketplace, with multiple channels available to consumers, businesses can’t afford to risk their real estate investment.
Even for services with natural barriers to competition from online channels—you can’t get your dog groomed on Amazon (at least not yet)—selecting locations based on gut feel may result in a poor choice. Chances are, without access to robust market insights that inform your location decisions, you are missing the big picture.
Identifying the right business location is a matter of analyzing several factors, including these key steps:
- Develop a strong understanding of the core demographics of your most profitable customers.
- Access reliable, updated demographic data that will help you find areas that contain a high-penetration of those customers.
- Identify locations that have a strong potential for your product. Strong demand isn’t enough; demand has to be high compared to current supply available in the area.
- Take a full inventory of the competitive landscape.
Accomplishing these steps can feel daunting, especially to those with limited budgets. That is where SPOTLIGHT can help. SPOTLIGHT is a robust, self-serve market intelligence tool that provides more than 50 detailed reports and maps with a 360-degree view of any market or trade area.
Here are three common questions SPOTLIGHT answers:
1. What are the characteristics of my best and worst performing locations?
By understanding the household profiles around your locations, you can see who your best customers are and use those insights to find other areas that have a similar profile. SPOTLIGHT allows you to quickly create a trade area around your current locations, using drive-time, radii or hand-drawn polygons, and then select from one of the available comprehensive reports, such as Pop-Facts® Demographic Snapshot or Pop-Facts® by Age, Race, Sex. SPOTLIGHT’s easy to read reports include household income, household size, occupation type, education levels and more. In analyzing the report, you will quickly identify the demographic variables with the highest concentrations in your area. For example, it may become clear that your best locations are in areas representing younger, educated, higher-income households; whereas areas with a high concentration of older households tend to be predominant around your lesser performing locations.
2. What is the consumer supply and demand in existing and potential markets?
The concept of supply and demand is well understood, but it can be challenging to measure. SPOTLIGHT delivers reports and insights that address this blind spot. Users simply build a trade area around existing and potential locations and run one of the purpose-built reports to reveal the supply and demand dynamics at play in their trade area. The Retail Market Power® Opportunity Gap by Retail Store Types report will display the demand, supply and opportunity gap/surplus for dozens of retail categories. The Consumer Buying Power® Consumer Spending Patterns report helps you understand the estimated current-year and five-year consumer expenditure dollar amounts for dozens of retail categories.
Analyze the data to make sure there is a substantial opportunity gap (demand compared to supply) and a strong current-year/five-year expenditure estimate and high compound annual growth rate for your product category. Support your analysis with some thematic maps for expenditure and supply estimates in your trade areas.
3. What does the competitive environment look like?
Once users have created their trade area (around existing and potential locations) in SPOTLIGHT, they can select a BusinessProfiles report for their industry, such as the BusinessProfiles Retail Sector report or the BusinessProfiles Service Sectors report. Using these reports, you can analyze the total count of businesses and total sales data for detailed categories within the industry and find soft spots where competition may be underrepresented. To complete the analysis, SPOTLIGHT makes it easy to support the research with thematic maps for the total number of establishments in the trade area.
SPOTLIGHT excels at identifying the type of consumers that live within a trade area and provides detailed market insights that are so critical to location planning. SPOTLIGHT does all this with flexible payment options that suit all budget levels.
Jason Norfolk is Vice President, Product Management at Environics Analytics.