Use Location Intelligence for Better Site Selection and Property Investment
There’s an old saying that the three things that matter most in selecting a property are location, location, and location. What are all the factors that really affect site-selection? Location Intelligence site selection can help you better understand everything from consumer behavior to geological information about a particular location.
City managers seeking to build a new firehouse, for example, might want to look at response times to underserved sections of the city. This raises the questions of traffic patterns and congestion, one-way streets, the location of existing firehouses, building density, and future urban planning scenarios.
Then there is the question of land cost. If the city does not already own suitable property (or even if it does), then the cost of potential building locations must be considered. Some locations may be ruled out because they would negatively impact residential communities, or potentially for environmental reasons. Many of the factors that drive the decision are available from existing sources of detailed location-based data.
For businesses, the site selection process can get even more complicated. Imagine trying to select the ideal location for a casual dining restaurant, for example. There are several considerations: You would want to know where the competitors are, how much traffic passes by various potential locations, and what kind of traffic it is. Does the site attract nearby office workers during the week? Would it rely primarily on a seasonal customer base centered around a local college or university? What is the disposable income profile of people who frequent the area? Are there complementary businesses nearby, such as movie theaters or malls? How far would patrons be willing to drive to eat at your restaurant? Is it near public transportation and, if not, does it have adequate parking?
There was a time when these kinds of questions could only be answered at a very high level. Recently, however, AI, machine learning, and advanced analytics have made it possible to render intelligent decisions from very complex datasets. Location Intelligence incorporates geospatial data to better understand everything from consumer behavior to geological information about a particular location.
Watch our webcast
Hear how Woolworths is using location data and software to analyze its store network to identify areas for expansion and determine the best services to offer at each store
Understanding the customer with location intelligence
In the not too distant past, the site selection process often included long hours sitting outside a competitor’s store, counting the number of cars in the parking lot at different times of day, keeping track of how many shopping carts or bags came out of the store, or counting how many deliveries came into the store. Today, the same information can be gleaned from rich, highly granular data sources drawn from mobile phones, social media, and GPS devices.
Location Intelligence goes far deeper than just understanding traffic volume, though. Today, analysts are able to analyze consumers’ movements before and after a store visit. They can combine that with psychographic information related to an audience’s interests and preferences to get a far more detailed understanding of who is frequenting a particular area and why. They can gain a better understanding of the natural boundaries that impact customers’ movements and buying decisions.
By combining all of that information with location-based macroeconomic data such as purchasing power and economic growth projections, businesses are able to quantify the return on investment of a proposed new location far more accurately than they have ever been able to do in the past. The result is a reliable and repeatable process for determining where to open new stores.
Attracting new customers
Site selection is not always about brick-and mortar-stores.
A South African advertising media company that oversees more than 15,000 ad panels across the country (including airport signs, billboards, and digital displays) uses location intelligence to help clients select the advertising locations that will best reach potential new customers. The company brings that information to life with visual marketing plans that enable its clients to literally see the value of those ad locations.
A Romanian wireless telecom company is likewise using location intelligence to determine site selection for cellular phone towers, ensuring that its customers have adequate coverage.
Mapping the territory
When a popular pizza company in the U.S. needs to identify a suitable location for one of its franchises, the company’s site-selection team takes the process a step further. As a delivery business, the company allocates a specific territory to each franchise. Each geographical territory is assigned a value based on the number of potential customers that it can reach, combined with socio-economic data reflecting its market potential.
Naturally, those territories change. New businesses or residential developments can enhance the purchasing power within a particular area, for example. As a result, the company occasionally needs to redraw the lines. Location intelligence has made it possible for the company to establish clear, objective parameters for drawing territory boundaries, and to apply those quickly, easily, and consistently.
Scaling it up
It is easy to see the value of using location intelligence to drive site selection, even for a single location. When that decision is scaled across multiple locations – whether it is retail, hospitality, public sector, or even cell phone towers – it quickly becomes apparent just how valuable it can be to have a systematic approach to site selection.
Imagine you are operating the chain of coffee shops. If you can better understand who your customers are, where they come from, and where they go after they leave your shop, then you can better anticipate their needs and increase customer satisfaction. You will also have a more accurate picture of how to market your product to other customers in the same demographic.
Let’s also imagine that you notice a trend; customers visiting your store on weekday mornings are also frequenting the exercise studio across the street. If you see the same pattern repeated in other locations, then you might have discovered a new parameter to improve your future site-selection decisions.
With access to rich, detailed location-based data, this is not just a possibility – it’s a reality. Smart, innovative companies are already doing it. They have turned site selection into a repeatable, data-driven process that can be refined and improved by adding even more layers of location-based data. That process is improving profitability, reducing risk, and helping business leaders identify new opportunities.
Watch our recorded webcast to hear how Woolworths is using location data and software to analyze its store network to identify areas for expansion and determine the best services to offer at each store.