Retail Site Evaluation Analysis – The most successful retailers evaluate sites using specific tools to measure demand and supply of a particular market and their potential customer base. The analysis of site selection involves both quantitative examination and qualitative insight following a three-step process Step 1: Assess Demand Step 2: Inventory Supply Step 3: Draw Realistic Conclusions.
A quantitative demand and supply comparison helps put numbers behind the analysis and gives some measures to support the retail site selection. This demand can be modeled using various quantitative measures using the population threshold and the market potential methods. However, as the analysis is as much an art as a science, the study must also consider numerous qualitative factors. Important qualitative considerations to help gauge a sites success include consumer perceptions and behavior demographic and lifestyle characteristics and the overall economic health of the local submarket.
Various factors determine a retailers customer base including the community’s population and its proximity to other competing business areas. These factors include:
- Population of your community: Generally the larger the community population, the bigger the customer base is.
- Proximity of other competing business districts: Typically there is a cutoff point where customers are drawn to the competing center instead of your community. People are more likely to travel shorter distances when possible.
- Mix of businesses in the community: A critical mass of businesses pulls customers from a further distance than a more limited mix of businesses.
- Destination attractions: A significant destination business (such as an Apple store) or community attraction can expand a retailers customer base—drawing customers from a long distance. However, do not assign a single business’s customer base to the whole community. Rarely will the small retailer’s business match the pull of a prominent destination business.
- Traffic patterns: Each region has distinct traffic patterns strongly impacted by its network of streets and highways, as well as major landforms such as rivers, lakes, and mountains.
Recommended resources for retailers:
- Washington D.C. Economic Partnership Group. Great data on local neighborhoods
- Yes Virginia Includes property search function.
- Maryland Department of Economic Business and Development Includes how to start, move and grow a business.
- Downtown Market Analysis Tools Includes market demand calculators.