Consumer demands for convenience are putting pressure on retailers to adapt.
Real estate and marketing decisions are under scrutiny as consumers are turning to online solutions, and increasingly willing to travel shorter distances to retailers.
Do You Know Your Trade Area?
When your business first opened, your core customers may have been willing to drive 15 to 20 minutes to your location, that time has likely been cut in half. Consumers now make many of their purchases online, which means they are traveling less to physical stores. And, when they do visit a brick-and-mortar retailer, they aren’t willing to travel as long or as far to get there.
Don’t let these statistics scare you, there is still plenty of opportunity for brick-and-mortar establishments to reach more of their best customers, if you understand where they are located within your current trade area.
Your trade area can be determined using your customer data combined with consumer behavior data to create detailed models based on your best customers. These models can help you answer questions like:
- What is my drive-time trade area – the amount of time my customers are willing to drive to get to my location?
- How can I increase my return on marketing investment when trying to reach new prospects?
- How are my locations performing in my trade area?
It might be time to reevaluate your trade area and narrow your focus to only the customers who are within an optimal drive-time of your location. Use your data and customer profiles to uncover where the opportunity is in your market.
How to Compete When Convenience is King?
Once you’ve identified the trade area for your best customers, here are a few retail trends you can capitalize on to drive foot traffic:
- Embrace online shopping. Upgrade your click-and-collect programs, allowing customers to buy online and pick-up items in store, to attract more customers. This strategy will attract customers to your store and can help you avoid costly shipping fees when going up against more established online brands, while also presenting an opportunity for additional sales once a customer is in front of your merchandise.
- Right size your existing locations. It might be time to reduce your store footprint. You may find that some locations are no longer in the right area to attract customers, while others could benefit from a new, smaller location. Right sizing your stores can help you better serve your best customers and optimize your existing store network.
- Create in-store experiences. When your customers do make a visit to a retail store they are often seeking an experience that separates the physical from digital. Find new ways to give your customers an opportunity to engage with your brand offline, encouraging an in-store visit.
The retail industry may be changing, but by understanding the evolution of your customers and trade areas you can design strategies for success for years to come.
Need help getting started? Learn how Buxton helps retailers define their customers, trade areas, and more.