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3 steps to evaluating a retail property with data
At the end of this month, we will be attending the ICSC Whistler conference where retailers meet real estate professionals to choose their next store location. The question on everyone’s mind is whether that new property is the right one. With that perspective, here are 3 steps to evaluate a new site using data:
1. Get demographic reports of a property location
Get a report on the population demographics surrounding the property. Knowing how many households are near a location as well as their income levels and household characteristics can help you understand the potential of a location. A location surrounded by mid-income young apartment dwellers will have very different performance levels than a location surrounded by mid-income older suburbanites or high income suburban ethnic households.
2. Compare demographics of customers to property locations
Compare the demographics around a property to the demographics of your customers surrounding your existing stores. If you do well in areas surrounded by upper income suburbanites, then you can look for locations that are in areas with similar characteristics. Knowing a bit about your customers is key and having data on them will help tremendously.
3. Get sales potential estimates for a property location
Use your customer sales data by postal code to get a profile of your best customers and use that information to get estimates on the sales potential around a new location. Each of your stores sells to multiple demographic segments and you can use that valuable information to make estimates in new areas. This is a really good way to put a sales number to a new location to help ensure you are making the right choice. With this method you can also take into account potential cannibalization of other nearby stores by knowing your existing sales in the area.
Whatever method you choose, selecting a location with real data is always better than gut feel alone. Everyone wants to make the best choice possible and avoid the consequences of a poor performing store.
At Archerra we want to help. Our retail demographics online application is a great option for evaluating new properties using these methods. Get a property location report in seconds by signing up.