Location is everything in business. In fact, according to a study by the International Council of Shopping Centers, location is the single most important factor in the success of a retail business. That's why it's crucial for businesses to put a lot of thought into where they choose to set up shop.
Thankfully, advances in technology and the availability of data have made it easier for businesses to make more informed decisions about their physical location. Companies like Getplace.io specialize in using data to help businesses find the perfect location for their needs.
So, why is location so important? For starters, the right location can help increase foot traffic and drive sales. According to a survey by the National Retail Federation, 74% of consumers say that a convenient location is the most important factor when choosing where to shop. In fact, research from the same source shows that consumers visit an average of four retail stores per shopping trip. If a business is located in a high-traffic area with a lot of foot traffic, it's more likely to attract customers than a business located in a quieter, less visible location. Foot traffic data can help businesses identify high-traffic areas and choose locations accordingly.
But it's not just about foot traffic. Demographics also play a crucial role in location selection. A business that caters to a younger demographic will want to be located in an area with a high concentration of young people. According to a report by the US Census Bureau, millennials now outnumber baby boomers, which means businesses that cater to younger demographics have a large potential customer base. Demographic data can help businesses identify areas where their target demographic is most likely to be found.
Competition is another factor that should be considered when choosing a location. Businesses should avoid opening up shop too close to competitors, as this can lead to a "cannibalization" effect, where both businesses end up losing customers. According to a report by the Harvard Business Review, the ideal distance between two competing businesses is at least 1,000 feet. Competitive intelligence for retail can help businesses identify where their competitors are located and make more strategic location decisions.
Financial insights are also important. Businesses need to consider the cost of rent or purchasing a property, as well as the potential revenue that can be generated from a particular location. According to a report by the National Retail Federation, retail sales are expected to reach $4.5 trillion in 2021. Commercial real estate data can help businesses get a better understanding of the costs associated with different locations, while foot traffic and demographic data can help estimate potential revenue.
To further understand the importance of location in business success, it's worth exploring some examples of businesses that have succeeded due to their strategic location decisions. For example, Starbucks is known for carefully selecting its store locations. According to the company's 2020 annual report, Starbucks' store portfolio optimization program helped drive strong sales growth and margin expansion. Another example is Walmart, which uses location intelligence to analyze and optimize store performance. The retail giant's "growth algorithm" helps identify the best locations for new stores based on factors such as demographics and market saturation.
In short, choosing the right location is crucial for business success. By using location intelligence, business location analysis, retail site selection, and other data-driven tools, businesses can make more informed decisions about where to set up shop. With the right location, businesses can attract more customers, drive more sales, and achieve long-term success.