‘If you build it, they will come’ is strategically speaking rather wishful thinking and has inevitably resulted in many underperforming, if not failing, businesses. It ignores the importance of location analysis, an integral part of any strategic retail expansion plan.
Going Beyond Tangible Data
Location analytics can give you a much better idea of whether your business will be successful in a particular area. By mapping key area demographics, shopping habits and competitor locations, you can see where there is an active demand for your offerings. Analysis of competitor outlets in the area can help establish whether the provision of a given product or service isn’t already outstripping demand.
What’s more, a business can not only find an ideal location by examining current variables such as income and nationality demographics, but also by going beyond tangible data and evaluating any long-term changes to an area, e.g. determining what consequences any planned housing or infrastructure developments can potentially bring.
Furthermore, location analytics can provide an insight in production and distribution costs; supermarkets, for example, must look at a potential new location and weigh up the buying habits of those nearby as well as the costs associated with stocking the shelves at this new location.
Make Informed Decisions
Using location analytics to create a market area profile minimises your risks of failure. Location analytics can help you integrate your business into the needs and shopping habits of an area, can give you a competitive advantage and ultimately prevent costly mistakes.