Every executive of every business has an interest in growth and sustained success, but while this goal is hardly novel, it’s more complex than many imagine or care to recognize.
When determining how and where to grow, the single most important factor in the process is not finding the right real estate – it’s finding the right customers.
While that statement may surprise you – look around. Today’s retail landscape is littered with failed concepts that believed if they built it, customers would come.
The second most important factor in the site selection process is to remember the first.
If there aren’t enough customers to generate the revenue needed to pay the bills, a stellar location – regardless of access and visibility – will fail.
Real estate will impact performance – but only if you have enough customers willing to walk into your store or restaurant in the first place.
So how do you optimize markets and franchise territories and avoid opening unsuccessful locations?
Find Your Customers
Customer data and analytic insights are essential to successful real estate expansion.
With customer data, it becomes possible to develop a customized profile that identifies your best customers, shows you where they live and where to find other potential customers just like them.
Based on that customer profile, a predictive model can be built to pinpoint trade areas with significant clusters of your best customers, showing you exactly how many core customers live in a specific trade area and quantifying the value of each customer in terms of dollars.
By predicting what each household will be worth to the store or restaurant, the model can actually forecast the top-line revenue that the location will generate – which allows retailers to quickly analyze the quality of any location under consideration.
This gives you a good idea of where to open a new unit and, just as importantly, where not to open one.
Additionally, the customer profile can be used to determine how many stores a market can support and how to improve local marketing campaigns.
The Bottom Line
As retailers are faced with the challenges of a progressively crowded marketplace, customer analytics can help your brand stand out.
A sharper perspective on your core customers can be used not only for real estate site location strategies, but also for targeted marketing, promotions and other elements of your overall brand concept.
Every company is unique, every customer is unique and every situation is unique. By tailoring the power of data and analytics specifically for your concept, you can quantify your true potential. There’s no substitute for a solution that enables you to profile your best customers, find more just like them, and open up homerun locations every time.
If you’re attending ICSC RECon 2015 at the Las Vegas Convention Center, visit us at booth number N1546 in the Marketplace Mall or schedule an appointment to talk with one of our experts about how you can use analytics to grow your business.