What to Look for in Retail Site Selection Software

Retail real estate site selection software should offer many benefits, but two advantages should stand out above all others: the ability to help you pick better sites, and the means to pick those sites in less time.

Some retailers also hope that site selection software can assist in negotiating better deals—that reps can point to the data when telling owners that a certain site isn’t worth more than X.  But owners may dig in their heels and insist that the same site is wonderful, thus not budging from their original price.

In reality, neither side’s negotiation tactics will make a difference because their arguments don’t carry much weight in the other’s eyes. People trust their own data, not what someone else presents to them.

Therefore, because owners and agents probably won’t consider the stats your site selection software generates, your priority when selecting a solution should be how well it helps you pick sites and how quickly it will do so. Of course, analytics capabilities and technology of the software should factor into your decision as well, but that’s for another post …

So, what exactly should retailers keep in mind when they purchase site selection software? Before choosing a solution, here are some questions to ask yourself, starting with:

Do we know how to pick good sites?

Most retail reps already know a good site from a bad one. If you can answer yes to this question, then ask:

Are we looking to make the process more accurate?

Again, if the answer is yes, focus on the following when you purchase site selection technology:

  1. High-quality, third-party data (store location, demographics, and so on.)
  2. Using the most accurate demographic retrieval methods possible
  3. Getting tools that will let you collect data when you’re out in the field

Are we looking to make the process more efficient and faster to execute?

If so, your team’s best bet is a system that will assist in streamlining your current process by giving time-saving tools to the people who do the work. The goals of the software should be to:

  1. Be powerful but easy to use; this combination will empower decision-making at the front line.
  2. Give people what they need, but doesn’t overwhelm them.
  3. Increase and enhance collaboration.
  4. Be flexible so that re-engineering your site selection process isn’t necessary.
  5. Support every step of your site selection process.
  6. NOT compromise security.

What if a company isn’t good at picking sites?

Companies that answered no to the first question struggle with finding good sites. Their response to this struggle might be to buy a model. Although good sales forecasting models are useful tools, they in no way can replace understanding your business. If you on rely solely on a model to help you determine a good location, you’re probably going to be disappointed by the end result—good model builders will tell you as much.

Given the situation, this is not the time to be investing in software. Instead, consider hiring a consultant. A good consultant can help you:

  1. Ascertain what the trade areas look like for the various type of markets (urban, suburban, exurban, rural, and so on; these are referred to as density classes) and create meaningful trade area for each one. These could be:
    • A ring a of specific size (for example, 1 mile urban, 3 miles suburban, 7 miles exurban, 12 miles rural)
    • A drive polygon for a specific time for each density class
    • Some kind of modeled trade area that truncates based on competition
  2. For each density class, understand who the customers are and aren’t by using demographics, lifestyle segmentation, or some combination thereof.
  3. Ascertain the impact of various competitors.
  4. Determine which factors will help bring business to stores.
  5. Figure out which factors will produce a negative impact.
  6. Bring all of this information together to craft a specification for each density class.

Once you and your consultant have accomplished these six things, your chances of answering yes to the first question above will increase significantly—and so could your site selection ability.

Retail real estate site selection software should offer many benefits, but two advantages should stand out above all others: the ability to help you pick better sites, and the means to pick those sites in less time.

Author
Joe Rando
Chairman