A Deeper Dive Into GIS Technology – Part II

Location, location, location. No matter the size of the retailer, site selection is of paramount importance. Metro’s GIS team is well-versed in identifying and executing the proper site selection plan for any retailer.  Measure twice, cut once—because choosing the wrong location is an expensive mistake.

First step: establish the retailer’s target audience. Then establish the client’s trade area.  This entails determining how far a potential customer is willing to travel in order to get to the retailer’s store location.  In the case of a convenience store, the trade area will be fairly small.  A customer doesn’t want to travel very far to get milk or bread.  But if we’re talking about a BJ’s Wholesale Club, the trade area will be fairly large due to the retailer’s focus on bulk items.

These trade areas are called drive time areas in a GIS.  By utilizing the street networks around a potential site, Metro’s GIS platform creates complex polygons that incorporate all areas within a prescribed driving distance of the potential site.

Using the selected drive time areas, we can append demographic variables such as population, income, and educational attainment.  We can then rank each site by ascribing weights to each demographic variable.  For example, if a retailer values affluent customers, then the weight for income will be increased.  If they value an educated customer, educational attainment will be weighted higher than other variables.  Understanding each individual retailer is critical in this step of the process.  If the algorithmic ranking system is not set just right, the wrong sites may be prioritized.

In addition to demographics, assessing the proposed site’s physical characteristics is important.  If the site is difficult to access or has obstructed views from the street it may be deemed worse than a location with greater visibility; insufficient parking may also weigh negatively.  Creating a numeric scale for site characteristics is an important step in the site selection ranking system.

After a final rank of all proposed sites has been outputted, our GIS team will forward the analysis to our brokerage team.  The brokerage team will then discuss the results with their client and determine where to go next.  A site is often chosen using both the ranking system and our brokers’ in-depth market knowledge of the area.

Consumers often marvel at how similar retailers seem to cluster in the same area. But when you take a deeper dive and look at each retailer’s audience and their respective wish lists for locations, it becomes apparent that what’s good for the goose is also good for the gander.

Stay tuned for Part III of our GIS series: Reverse Engineering Success.

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