If you own or manage a retail franchise, you understand how critical it is to select the best locations for your stores. Your business's location can make or break it, influencing sales, costs, customer loyalty, and brand image. But how do you measure the potential of a location? How do you compare different sites and markets? How do you optimize your existing network of stores?
In this article, we will demonstrate how location intelligence can assist you in answering these and other questions. Location intelligence tools can display demographics, traffic, competition, spending habits, and customer preferences for any location.
We will introduce you to five key location metrics that you should consider when planning a retail franchise. These metrics will assist you in evaluating the performance and potential of your current and future locations, as well as guiding your strategic decisions. Let’s get started!
One of the most important location metrics for your retail franchise planning is analyzing competitors in the area. You do not want to move to a place where there are already too many similar businesses competing for the same customers. That would make it harder for you to stand out and attract loyal customers. To compete, you would have to lower your prices and profits.
Instead, look for a location with enough demand for your products or services but not too much supply. For example, if you own a coffee shop franchise, you should avoid opening in an area where there are already several Starbucks, Costa, and independent cafes. You might want to find a place where there is not much competition for your unique coffee.
Demographic is a term that refers to the characteristics of a population, such as age, gender, income, education, ethnicity, and so on. For your business, demographic data can be a powerful source of insight, but it can also present challenges. By using location intelligence tools, you can access and visualize demographic data for any area and use it to your advantage or avoid it to your detriment.
If you sell baby products, you can use demographic data to target family-oriented areas with your products, services, and marketing campaigns. However, if you sell luxury watches, you can use demographic data to avoid areas with low income and education and focus on areas with high disposable income and sophistication. This will help you optimize your sales, costs, customer satisfaction, and brand image.
Accessibility refers to how easy and convenient it is for customers to get to you via public transportation, car, bike, or foot. It affects your attractiveness and visibility, as well as your exposure and traffic. For instance, a convenience store near a subway station will attract more customers. Customers are happier and more loyal to a brand that prioritizes their accessibility needs. Here are some tips to improve it:
● Research how your target market travels and what influences their choice of transportation.
● Pick a location close to major transportation hubs, such as subway stations, bus stops, etc.
● Have good visibility and signage that shows your name, logo, and products or services.
● Give enough parking space for customers who drive, and offer incentives for parking at your location.
● Provide bike racks or lockers for customers who bike, and offer incentives for biking to your location.
● Offer pedestrian-friendly amenities for customers who walk, and offer incentives for walking to your location.
Accessibility can help you attract and keep more customers. By making your location easy and convenient to reach by different modes of transportation, you can boost your appeal, visibility, exposure, and traffic.
Brand fit is another important metric. This means how well a location fits with the identity and image of a company. Customers benefit from a consistent, coherent experience that reflects the worth and recognition of the brand. For example, a luxury hotel may want to be situated in an affluent neighborhood that showcases its quality and prestige. Brand fit can also help a company stand out from its competitors and attract its target market.
Operating costs are the money you spend to operate a location, such as rent, utilities, taxes, maintenance, and security. It assists you in determining how much profit you can make from a location and how long you can afford to stay. It also allows you to compare various locations and determine which one provides the best value for money.
A clothing store, for example, may have to pay more rent to be located on a busy shopping street in Zurich, but it may also attract more customers and sell more products if it is located in a less expensive but less popular area. Operating costs can assist you in determining the best balance of a location's costs and benefits.
To optimize your retail franchise planning, it's crucial to consider many factors, especially the optimal location. These five metrics can guide your decision-making process and help you choose the most suitable locations for your stores. Avoiding crowded markets, analyzing population data, improving accessibility, ensuring brand fit, and evaluating operating costs are all ways to strategically position your franchise for success. So, harness the power of location intelligence to make informed decisions that will propel your retail franchise to success and captivate your target audience.
