The location of a retail business is arguably the most important metric in terms of the impact a brand is likely to have. Public presence, customer attraction and the potential for income are all directly linked to business location. Whether you’re a retailer looking to expand and repeat upon your existing successes or new to commerce and looking to make the most out of your new venture, you should understand that retail franchise planning is crucial.
While there can sometimes be value in trusting your gut feeling, your instincts are simply not sufficient for choosing the right location for your new retail premises. Instead, you should be prepared to back up your instinct with hard data. How exactly do you do this? With location intelligence.
There are certain key performance indicators (KPIs) and metrics that can help you to make smarter retail franchise planning decisions. Some of this information may be found within your own customer marketing data, whereas some might be publicly accessible. With Periscope® from Newgrove, you can combine different data sets to gain powerful retail location insights to allow you to make smarter acquisitions.
The 5 most important metrics in retail franchise planning
Local demographics, such as population density, age, income level and gender, are important when it comes to choosing your next location. Quite simply, you’ll want to strategically position your premises in an area where passing prospects will potentially want to purchase from you.
Ultimately, the nature of your business will dictate what sort of demographic you target. For example, a sports apparel company that appeals largely to younger people may be less likely to attract business in an area where the majority of the population is of retirement age. Likewise, a luxury retail store might struggle to draw in customers on an industrial estate populated by companies that operate exclusively in the B2B sector.
Periscope® allows you to identify potential new locations by evaluating your existing customer data and comparing your most profitable demographics with recent information from the UK census. From here, you’ll be able to highlight locations on a personalised, secure, corporate version of Google Maps.
While identifying a location based on demographics is a smart move, it’s also important to consider the existing competition in the area. If there are already half a dozen well-established similar businesses in an area of potential expansion, you could run the risk of spreading yourself too thinly. It’s important not to move into an overly crowded market, as you’ll spend a lot of time reducing prices (and ultimately profits) just to compete.
Many of us think of prime retail space as being on the high street – but that doesn’t always have to be the case. If there are sufficient transport links (such as regular public transport to and from a shopping centre) or several large office buildings in the vicinity with workers that pass your premises daily, your potential location could be a winner.
Periscope® uses national infrastructure data to highlight whether a location is accessible and whether it’s likely to experience much footfall. This data can also highlight days/times when certain locations are likely to be busiest, allowing you to compare and contrast with your existing customer data. For example, if you tend to trade mostly during the weekends, you can take this into account when considering the accessibility/footfall of prospective locations.
4) Running costs
It’s not uncommon for high-demand locations with the perfect combination of demographics and accessibility to come with a hefty price tag. Take London’s New Bond Street as an example, it’s full of high-end fashion retailers but is the third most expensive street in the world to rent retail space on.
Ultimately, retail success is all about balancing costs. By combining your existing financial data with available location data on rental costs, you can accurately predict whether you’ll be likely to achieve a good return on investment.
5) What currently works for your brand
Great customer service, fantastic products and the right pricing structure are all key to profitability. However, recreating this success in another area isn’t as simple as taking your existing brand and moving it to another location. Instead, you’ll need to assess and compare the performance of potential locations with existing ones by concentrating not just on existing customer data, but on location data too.
How Periscope® can help with your retail franchise planning
By evaluating the performance of your current locations, you can harness this data to help identify areas around the country where you’ll be most likely to replicate existing success. Periscope® allows you to visualise complex data sets to gain greater insights when planning a new retail franchise opportunity.
If you’d like to explore how Periscope® could help you with your retail franchise planning, please contact us today to request a demo.