The COVID-19 pandemic created a seismic shift in consumer behavior that changed the retail industry — perhaps forever.
Working from home (WFH), the impact of mobile searches on shopping behavior, and the COVID-fueled trend toward BOPIS (buy online and pick-up in store), take-out dining, and migration by millions to new geographies have all had a significant impact on what constitutes a great location for a retail or restaurant business.
Retailers and leasing brokers need to adopt a whole new system of analysis and decision-making, fueled by technology. Here are four things that retailers and brokers should STOP doing ASAP in their new site selection process in 2021:
- Ditch the old “ring around a trade area” way of finding your ideal customer base. This methodology is flawed, as it doesn’t take into account the real-life travel patterns of consumers and workers. Furthermore, factors like bodies of water, lack (or availability) of public transportation, and traffic flows can have a significant impact on who can conveniently access a specific retail location. For more information on trade areas, read How to Calculate “Trade Area” in 2021.
- Avoid using only home addresses in figuring out your trade area. Depending on the type of business, people are willing to travel for certain purchases and services, but not everyone is coming from home.
- Don’t look at population density alone. This may be killing your site selection evaluation. As the following chart illustrates, relying just on the population that lives and works in a specific area can be highly misleading.
Instead of merely looking at population density, we now have access to a wide range of hyper-local and powerful mobile data that tells you:
- What consumers are searching for and where
- How they are walking and driving every hour of every day and day of the week
- Demographics of individual shoppers and diners
- In-store behaviors
- Spending potential per consumer
Putting this data to work is the best way to locate or relocate a retail business.
4. Stop equating “normal” in 2021 with “normal” in 2019. The COVID-19 pandemic has had a significant impact on the housing market, migration patterns, and the basics of how people spend their time.
Because as much as 30 percent of the population now works from home, consumers of all ages are making major decisions about where to settle (if they settle at all). Whereas people used to choose where to live based on proximity to their offices, this is no longer a decision-making factor. That has a direct impact on how and where people shop and eat. For example, see our article on the Impact of COVID-19 on Urban Customers: A Case Study on Starbucks.
Today’s top brokers are no longer recommending a site because it’s in the hub of a commercial district. They are using data to better understand how residents of a specific neighborhood are spending. Leasing space in a crowded downtown area may possibly be a dated concept, as lunchtime shoppers and diners have dwindled and may, in fact, never return to the same levels in certain markets in the US. The top brokers of the future will be those who know how to harness information to help their clients choose the ideal location.
Instead, the focus needs to be on powerful and granular data about workers’ behaviors that is only accessible through a system like Locate. Locate is the first tech-enabled retail real estate brokerage that implements a fully data-driven site selection process end to end. Our technology analyzes over 180 million anonymous mobile data devices and builds powerful revenue forecasting and expansion opportunity models.
To get COVID-19-related or other customer behavior data for your brand, competitors, or cotenants, simply fill out the form below.