COVID’s impact on the restaurant industry has been significant, forcing “more than 100,000 mostly independent restaurant operators to close,” according to CoStar News.
However, these closures have created location opportunities for those who were able to weather the storm. For example, Dine Brands--the parent company of Applebee's and IHOP--said in a third-quarter earnings call that they were ready to grow by leaning into development.
But with over 100,000 opportunities available, which are the right ones for your brand, and which were just bad locations to begin with? New analytical tools can help you determine this by supplementing your current evaluation process and preventing you from following someone else’s mistake. Let’s use Applebee's to illustrate how these new analytical tools can help validate a location’s potential.
The analysis presented was generated using the Buxton Platform, which is made up of the SCOUT, Mobilytics and Match applications. Here is a breakdown of the steps taken to acquire the data illustrated above.
This map identiﬁes Applebee’s locations in the Dallas market. The ﬁrst step is to identify how much of the market is already covered by these existing locations. This process can be accomplished using actual customer data or by using a mobile data tool, like Mobilytics, which captures and analyzes footfall traffic.
The green customer dots represent the households where actual Applebee's customers from the Irving, Texas, location live. The data has been de-identified and masked to prevent anyone from knowing where the actual houses are.
Once you know where your customers live, you can identify the trade area for any location. Repeating this analysis across your network reveals your actual trade area while creating what we will call a “no-ﬂy zone,” revealing gaps and areas of opportunity.
With Mobilytics, we can identify who the customers for Applebee’s are and ﬁnd look-a-like customers with a click of a button. Each one of the red dots represents a potential customer for Applebee’s. Next, you can ﬁnd available real estate using Google Search or the CoStar Suite. The CoStar Suite is linked to SCOUT, making it easy to evaluate available real estate in the context of market potential.
Throughout this process, we found a recently vacated restaurant on Greenville Avenue in the middle of Applebee’s' network, but not covered by an existing trade area. Now, we begin to apply advanced analytics to the process to further evaluate this opportunity.
Using Mobilytics to analyze the closed restaurant, we can go back in time to reveal who their customers were (see the green dots on the map) and where they live. This revealed the previous restaurant’s trade area. And because consumers are creatures of habit, we can use this trade area for the basis of a potential Applebee’s trade area. Coincidentally, the trade area ﬁts nicely within Applebee’s' network gap.
The ability to know who, where and when customers visited a restaurant location will supplement any brand's due diligence when trying to make real estate decisions. This can be especially helpful when you want to verify why a previously closed location failed. The last thing you want to do is to be the next failure.
Written by Todd Walls, Chief Innovation Officer
To learn more about Mobilytics, check out our website.