InsightsRetailSite Selection

Two Kinds of Customers and the Curse of…

By May 28, 2015 November 8th, 2017 No Comments

Out of the hundreds of customers we have seen since we launched, we can typically bucket most of them into two groups (these are true stories with names withheld to protect the innocent):

1. An individual is thinking about opening their first independent retail store or retail services (restaurant, spa, gym, etc.) or they are thinking lp-img2about investing in a franchise opportunity. They know location is important, but don’t even know what questions to ask. Even in a franchise situation, picking a great location is your responsibility. Often times, these people will be seeking out more information about their location and either their broker (real estate/franchise) or someone else who has a vested interest tells them how great the location is or feeds them back limited data such as:

Within a 12 mile radius of zip code 12345:

1. Families who earn $65,000 and up with children birth to 6 years
2. Result:  5,044 that meet the criteria
3. Families that earn $60,000 and up
4. Result: 5,735 children that meet the criteria

They see this and think they have all the information they need to retail location analysis and to decide if this is an ideal location. Most of these never dig in deep enough to get their IdealSpot report. She is just one of 29 million or so small businesses in North America and sadly approximately 80% of new businesses will fail in their first year, many because they chose a poor location.

2. They are the CEO or head of real estate development for a fast growing, successful restaurant chain or retailer in 3+ cities and they are continuing to expand to other markets. Their challenge, like most retailers, is that every investment in a poor location not only decreases working capital but costs a small fortune over the lifetime of the lease.

They are sophisticated business people. They have researched and used just about every tool available in helping them select their retail sites. From the high-end agencies, to SaaS retail location analysis and mapping solutions, to DIY (do-it-yourself) data mining tools. Most of these solutions cost thousands to tens of thousands of dollars or more. Through trial and error, they have become experts in what’s available in the marketplace. Today they don’t use any of them because in their words, “the data is bad, not real-time, or not relevant, their models are outdated or heavily influenced by the current leading consultant, or the needed investment for the service isn’t worth the value delivered.” So of course they are huge skeptics when they first encounter us, but they look at the price point of $299 a location score and figure there is virtually no risk in giving us a try.

We started IdealSpot for both of these customers with their retail location analysis.

We wanted to offer an affordable and easy to understand solution so that they could make a truly informed decision because of the risk of choosing a wrong location is so much greater than it needs to be if you have the proper research.

1. Don’t Assume All Demographics were created equal!
We don’t regurgitate demographic data, and we don’t ask you to make assumptions on what you/your team think are the most important indicators for success are for your brand. We let our industry leading machine learning algorithm pull out the most relevant metrics based on where you and your peers have already been successful (or unsuccessful) and without any human bias. Do you need to know how many people fit your demographic criteria by age, education, income, and wealth? Yes. Do you need to know how much traffic passes by your store daily? Sure. Is it important to understand the businesses that compete with you or feed you potential customers? Absolutely. But these are about 30-40 out of the 15,000 variables that we analyze specifically for your business.

2. Our focus is on REAL-TIME information.
Not stale, run only every 10 years, census data. Demographic data is important, but it’s only a sliver of the story of a location. It’s number of rooftops, breakdown of ethnicity, or median income—get out your broad-stroke paint brushes. We ask, how many in that household typed into Google Search in the past month “take out pizza” or “where is the nearest bar”, or they went to Yelp and searched for the best “chicken wings”. THIS is the addressable market. It’s relevant, it’s real-time, and the numbers don’t lie.

3. Every location has a story to tell, and the story changes vertical by vertical.
We get to the story. We look at all the data, analyze, translate, and provide THE answer of should you or shouldn’t you consider this location. We DON’T ask our clients to read the tea-leaves. We score risk at each location, AND more importantly, we give you the factors of why it scored high or low.

Marc Smookler

About Marc Smookler

Marc Smookler has founded 6 companies—2 of which have been acquired and 3 of which are market leaders in their respective spaces—the leading brick-and-mortar retail analytics company (IdealSpot.com), a leading online retailer (SakeSocial.com), and a cutting-edge marketing services platform (Written.com). Marc’s companies have generated over $300M in lifetime revenues and sold over 150,000 products worldwide.

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