How to Navigate Post-Covid Site Selection
In 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 Habits
Our 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 Retailers
Former 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 Technologies
The 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?
With mobile technologies, you have access to your customer’s mobile data, so you can understand and predict their habits. For example, real-time data can show you changes in home and work locations of prospective customers to analyze whether or not a site location determined pre-covid is viable post-covid. If the location is viable, you can determine what conditions are required for success and profitability, and if it is not, you can strategically look for additional site options.
You can negotiate rent based on accurate foot traffic information or identify new placements that will produce significantly more business. By leveraging mobile technologies to understand your customers in real-time, you can beat current market uncertainty, open stores with confidence again, and guide franchisees and operators with assurance in site selection.
How to Beat Site Selection Uncertainty
Locate is the only tech-enabled 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. With this information, retailers can make informed, accurate decisions that will help them navigate this new world and move beyond the challenges that so many have had this year. If you’re interested in learning more about how we can help you in your site selection process, get in touch with us here.