There’s nothing like the sinking feeling you get after pouring hours into securing a new site only to realize after the grand opening it’s in the wrong location.
In theory, the rise of big data and the explosion of predictive analytics software should make selecting sites a breeze. Yet big companies from Sears to Qdoba Mexican Grill are being forced to close hundreds of underperforming stores and restaurants, despite robust in-house real estate resources.
At the same time others, like The Container Store and Lowes Foods, are adding profitable new locations to their existing store networks. More and more of these growing chains are relying on site selection consultants to guide their expansion strategies and supplement their in-house strengths.
A great advisor can help you gain a deeper understanding of consumer patterns before you make critical location decisions.
How do you know it’s time for site selection consulting?
If two or more of the following indicators ring true, it’s time to consider hiring an outside specialist:
Indicator #1: Your tools don’t seem to be working for you
Tools don’t tell the whole story. The key to success is not about having the best software, deepest database or fastest algorithm. What you really need is an expert human analyst who can extract the right data and turn it into profitable insights.
One retailer we work with discovered just how powerful outside assistance can be when they went with a location recommendation that, according to their own internal analysis, seemed an unlikely fit. Executives feared the surrounding market wouldn’t support the brand.
For several years now, that one store has consistently operated in the top 20% of the company’s national store network.
Indicator #2: You’re missing opportunities
This is usually a result of not having the right data and analysis at the right time. A high quality site selection consultant understands you, and can vary solutions based on your changing needs so you can secure the most profitable locations for your brand.
Indicator #3: You’re considering an in-house analytics department
Site selection is a highly specialized field. Just one store closing can mean millions lost, so it’s important to assess the cost of hiring qualified specialists. Ask the important questions:
- What’s the average salary and benefits package for an experienced commercial real estate analyst?
- How many new staff members do you anticipate hiring long-term?
- What software and tools will they use? At what cost?
- How much travel will be required?
If your forecast indicates a significant drain on your budget, it may be time to outsource analysis to an established consultancy—one that can guarantee better results, more efficiently, than you’d be able to produce in-house.
Indicator #4: Travel to potential sites is draining your budget
When you’re growing your network, on-the-ground scouting can turn each new site selection into a huge investment of both time and money.
We had a client who, before partnering with eSite, was devoting countless hours to manually evaluate hundreds of potential locations for every new expansion opportunity. Now armed with the right tools and expert analysts, the team can identify a short list of markets with high potential for a fraction of the time and cost.
The company is saving thousands of travel dollars every month—all while successfully growing its store network.
Indicator #5: Your data is old or incomplete
In a fast-moving industry, outdated or limited data is a major disadvantage. You need to know who’s in the community today, not five years ago.
An established, well-connected site selection consultant combines your company’s data with traffic patterns, psychographics and household-level demographics… making it easy for you to decide where to go next and how to optimize existing store networks.
If the above indicators apply to your company, finding an established consultant will help you get to market faster, more confidently and with greater success.