How to Navigate Post-Covid Site SelectionIn 2020, many retailers were forced to close their doors, shut down operations, and halt all plans for expansion. A year later, they are entering 2021 with the greatest uncertainty they’ve faced in decades. With site selection being one of the most essential strategic decisions for growing retailers, they need a new solution to navigate current and future market conditions. In this article, we’ll examine the long-term implications and core issues facing retailers right now and present a new solution for navigating site selection given current challenges.
Shifting Customer HabitsOur data shows that consumer habits have changed significantly as a result of the pandemic, drastically impacting the retail landscape and location intelligence. To start, most people are working from home, meaning areas around universities and office buildings have far less foot traffic than a year ago. Travel has decreased overall, leading more people to spend a greater amount of time in their local neighborhoods, parks, coffee shops, and restaurants. More people are moving to less populated cities in their home states, and areas that were once heavy with tourism are now primarily populated by residents. Additionally, high unemployment rates, coupled with a large percentage of people financially impacted by the pandemic, has resulted in less shopping and spending overall. Many people have become accustomed to contact-free services, like Instacart and delivery options, meaning considerably less people are visiting anchor tenant locations. These changes only begin to scratch the surface of the challenges we’re facing, bringing the complexity of site selection to the forefront.
Implications for RetailersFormer frameworks for navigating retail locations are no longer enough for retailers to make site decisions. While traditional frameworks might provide you with data to help you make decisions, customer habits and trends are no longer predictable as they once were. For example, a prime site on “Main & Main” that was once in high demand might have very little foot traffic now, meaning previous ideal locations look a lot different for you today. Alternatively, a location that you declined in the past may be more appealing now. Methods used prior to 2020 are still important, but are no longer sufficient to move our industry forward right now. When considering your strategy for site selection, it’s essential you account for these changes in consumer habits. In time, orders restricting retail businesses from operating will alleviate, but waiting for the world to “go back to normal” isn’t an option. It’s time to take advantage of favorable lease terms and recalibrate your customer’s shopping habits with more accurate real time forecasting tools.
The Solution: Real-Time Mobile TechnologiesThe use of real-time mobile technologies and data has transitioned from being a cutting-edge strategy for some retailers to a must have for everyone in the industry. This new technology allows businesses to not only see the traffic patterns of people, but also specific areas where those patterns are increasing and decreasing. Mobile data can answer your most pressing questions, like:
- How have my customers changed since COVID-19 and how long can I expect these changes to last?
- When is the best time to open a site based on current demand in a specific location?
- What target rents do I need to hit in landlord negotiations to ensure my store’s success?
- Where are the best markets for opening a new storefront?