Retail stores live and die based on foot traffic. A successful retailer may sell online or even deliver products, but it’s the people who walk in the door that make or break the sales goals at retail.
A retail manager or owner must do all they can to:
- Locate the store in the best possible location for walk-in traffic
- Sell products or services that cater to the surrounding community
- Advertise to the local retail audience with effective messages
Business maps are a cost-effective way to support each of those key retail requirements with regional business intelligence for optimized business decision-making. These process start by importing location data into a geo mapping software program like Map Business Online.
Where to Locate My Store
Locating a retail store in the inner city is a no-brainer because that’s where the people are. But there are always subtle characteristics that differentiate a good enough placement from the optimum store location.
- Vehicle and foot traffic patterns
- Neighboring retail store types – Red Light districts vs. residential neighborhoods
- One-way or two-way streets
- Where are all my competing retail stores located?
- Other factors specific to the type of business
Beyond the immediate surroundings, retail store placement should take into consideration the surrounding demographic make-up of the neighborhood. Within a two to three-mile radius, how many households exist? What are the general demographic characteristics of the surrounding community? The area’s ethnicity, income, and age characteristics are important considerations, depending, of course, on what you are selling. Creating a demographic map is a key step in the retail location process.
One example might be opening up a Chinese restaurant in China Town; which might make sense. But locating the fourth Chinese restaurant in a plain old downtown business district might be too much of a good thing for the market to bare. A retail business map with restaurant business listings plotted could help identify saturated markets.
A business map can assess the surrounding demographic characteristics within a given radius or within a certain driving time distance along the road network. This market analysis can quickly match a local clientele to products and services offered. By comparing various location center points using the same demographic analysis, optimum alternative locations can be considered.
Driving time polygons display the distances in all directions that a vehicle will travel along the road network, from a central point, in a given amount of time. Retailers typically want to understand driving time polygons of 20 minutes or less. Larger stores may be capable of sustaining customer interest across longer driving times. But in busy downtown shopping districts, driving times of more than fifteen or twenty minutes could be deal killers. People are busy. Traffic happens.
Driving distance polygons shift in shape dramatically when they include access to major highways. A five-mile home to store ride could be relatively quick when a two-exit highway jaunt is all that’s required. These are factors to be considered in a retail market analysis. How close is the store to a highway exit? How does using the highway impact driving times?
Who Will Buy These Wonderful Roses?
Likewise, a demographic assessment goes a long way to determining viability for planned products and service offerings. New product plans should take into account regional and local demographics to ascertain whether or not a viable market exists for the product.
High-income households are a usual suspect in the search for viable markets. But other relevant Census categories may help fine-tune a retail market’s potential. For instance, furniture items planned for stock or blow-out sales could be more strategically placed where certain age brackets are plentiful within a twenty-minute driving time.
- Recliners – Which ZIP codes contain the largest population of 60 to 85-year-olds within a 20-minute drive time of my store?
- Love seats – Which ZIP codes hold the largest population of 30 to 50-year old females within a 15 minute drive time of my store?
- Big Screen TV Stands – Which suburban communities contain the largest populations of NFL fans and Stoners, with incomes higher than $75,000 per year? (OK, those aren’t Census categories. Yet.)
Similar demographic market assessments could be applied to an overstocked product analysis. Chain stores with heavy inventory commitments might want to move product between stores based on customer demographic trends by neighborhood or ZIP code.
Communicating with Demographic Groups
Once a market’s viability has been established, the retailer must reach out to the intended audience. Marketing messages are presented to potential buyers through a variety of channels. Business mapping software can provide critical business intelligence supporting many channels:
- Radio advertising covers large line-of-site antenna coverage areas. These market areas are approximated by Census MSA’s or Nielsen DMA coverages, combing area targets with demographic categories and historical response rates for specific classes of customers.
- Printed media and newspaper fliers are distributed in conjunction with retailer offers. Periodical readership and ad response rates can be tracked by ZIP code and retail store radius areas, lending relatively exact measurements of specific message and offer success. Test, measure, and mail!
- Retail stores are rolling out online offers to passing cell phone traffic to gauge the effectiveness of real-time offers as people shop.
Understanding the demographic DNA of your surrounding community is critical to retail placement, product offerings, and marketing messages. Viewing your business from the perspective of driving time distances helps to develop a realistic assessment of the local market.
Retail business maps are the X-Ray vision glasses retail managers need to succeed.
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