Jonathan Keyser is the founder of Keyser, one of the largest commercial real estate brokerage firms in the country.
One of the most important factors in the success of your retail business is website selection. The placement of your commercial property locations can make the difference between visitors to your business and the competitor across the street. When it comes to your business success, you cannot afford to guess locations, fly blindly, or make generally uninformed decisions.
Fortunately, technology has advanced to the point that artificial intelligence (AI) and data analytics are now ubiquitous and can be used in any commercial real estate transaction to help executives understand the invisible data that affects their consumers’ visibility . With a deep dive into the data, here are the areas your broker should provide insight into:
Demographic and competition gap analysis
Without a realtor who is data-armed and looking for your best interests, some business owners choose a retail space based on just two criteria: 1) “Is it within my budget?” And 2) “Is it near my home?” This is a recipe for disaster as you are essentially trying to force your business into a market without considering the demographics of the area or market saturation.
For example, if you are a trendy fitness concept for mothers and you decide to find vacant retail space without research, you may be placing your business in an area where there are several other fitness competitors, whether they are in that mall or not. Even if these competitors are very different or not just for your target market, you can still compete for your business based on a variety of factors such as brand equity, established relationships, or distance from consumers. Additionally, if you know a handful of mothers in the area who are not part of the overall demographics of the area, you may not have a clear picture of the demographics of the area, and as a result, you may be limiting your customer base too much to support that market .
Knowing the demographics of your market will give you an initial understanding of whether your business is profitable in this area. A void analysis shows you areas where your type of business may be underrepresented.
The customer journey
Some of your customers visit your store and go straight home. Others make the most of their trip, running errands and stopping at other stores before returning home. In the past this was difficult to tell apart, but we are now able to better understand the customer journey, where your brand falls in their daily routines, and which stores your customer base visits frequently before and after visiting your store. Understanding this should give you ideas about cross-promotion opportunities that may be of interest to your customers, as well as the general behaviors, interests, and psychographies of your customer base.
From one corner of an intersection to another, you’ll be amazed at how drastic the difference in vehicle traffic can be. There are a number of reasons why you may not get the traffic you expected from a nearby freeway to other retailers in the area. Vehicle traffic is directly related to how many visibility opportunities you get for your space. Understanding this can help you better understand where to get the most bang for your buck, especially if you are limited to certain areas of the signage.
As technology advances, business leaders are better informed about their commercial real estate decisions. It is your broker’s job to provide you with all of the data and information necessary to make an informed decision, but it is your job to ensure that you select a tenant-only agent who will provide you with the information and support you need need during this process. When reviewing the broker, make sure that AI and data availability are part of your hiring criteria.
Advance Guide Real Estate Council is an invitation-only community for real estate executives. Am i qualified?