Maybe there is something to be admired in the populist effort. Can site selection really be this simple? It’s not likely, but fortunately there are new tools available to large and small business alike that are a bit more sophisticated than the techniques used on American Idol.
In reality the future of site selection is already being implemented to discover market potential as described in a May 2011 Commercial Investment Real Estate article by Robert Hand, CCIM.
“Technology has taken a giant leap forward in the last few years by expanding the traditional tool of demographic research into an analysis of lifestyles and consumer spending behavior. The old-school strategy was to look at population count, income, and age to determine a good location for a business. But new-school tools such as leakage factor, retail gap, drive-time reports, and Tapestry lifestyle analyses take decision making to a higher level and reduce the risk of failure.”
This type of research has been used in economic development departments across the country for years in an effort to discover viable businesses for the community. This same research is available through Cottonwood | Commercial to aid businesses locating in Harrisonburg and the Shenandoah Valley as they search for the perfect location.
Robert Hand sums up the tools perfectly in his closing statements:
“We have progressed from simply knowing the population count, age, and income to knowing detailed information about who lives in the target area, how they spend their money, and what businesses are missing that could satisfy that demand. We have been able to conclude the target area has the highest unfulfilled demand for furniture, sporting goods, clothing, and food stores, and we have been able to forecast the total sales of a future grocery store and can plan our capital expenses such as store size accordingly. We know what makes the nearby residents unique and where they spend more of their money compared to the average consumer, so we also can lower our inventory costs by stocking the goods with the highest demand. We also can reduce our advertising costs by targeting the media that our customers will use.
These new-school tools are available to everyone facing a real estate decision, not just the Walmarts of the world.”
Click here to learn more about these studies and view sample reports available for every commercial site in the Shenandoah Valley through Cottonwood | Commercial.
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