Last Updated on August 11, 2022 by Morgan Beard
Consumer data has long had the potential to help retailers better understand the ever-changing behaviors of customers. Many retailers leverage these insights to improve products and services, inform marketing decisions, shape the customer experience, and more. In fact, consumer data can be used to adapt nearly everything involved with a business to ensure that you’re always meeting consumers where they are — not just in the digital realm but in the physical world.
When it comes to growing your retail real estate footprint, consumer data should take center stage. It can eliminate much of the risk associated with almost any real estate location, offering a lay of the land in regard to local shopping habits, crowd behavior, foot traffic, competition, and whether your target audience is even within a certain mile radius of a potential franchisee store. Franchisee consumer data simply makes your commercial location strategy more effective.
Capturing Data to Inform Real Estate Location Decisions
While it’s easy to understand the value of franchisee consumer data in making more informed real estate location decisions, many retailers struggle to find the right means for tracking and capturing this information. The answer can often be found in added layers of technology. Apart from a CRM platform, one of the more vital tools will be transaction management software. Real estate transaction management software allows franchisees to compare and contrast multiple real estate locations simultaneously.
You can bring up a visual map and information about total square footage, rent expense, lease incentives, demographics, and so on to not only arrive at better decisions but negotiate better lease agreement terms. You can quickly winnow down your selection to a few spots and have an informed conversation with landlords. If you have multiple deals at once, transaction management software allows you to track requests for proposals, counterproposals, final terms, and more. Losing sight of a viable location during franchise growth can prolong your deal life stages and ultimately slow your growth.
To develop even deeper insights into potential real estate locations, a real estate analytics tool can also be of benefit. Few questions will remain about how to model consumer traffic or potential revenue, as you can pull up data on total headcount and capacity at other locations to give you an idea of what to expect. You can also analyze fixed rent, facility costs, maintenance orders, and other expenses to gauge whether franchise growth makes sense when comparing one location to the next.
Knowledge is power, as they say. If you’re spending large sums of money, you want all the information available to ensure a sound investment.
Tracking the Right Information to Strengthen Location Strategies
Getting the right technology in place is one thing. Making sense of the information available is another story entirely. You will easily find yourself with a growing volume of data, so it’s more important than ever to focus on a few data points first and expand from there. Here are often the data points of highest priority:
1. Customer satisfaction
It’s no secret that customer satisfaction is vital to the success of a business, but many retailers overlook this valuable KPI in their franchisee location strategy. After all, each site you choose for franchise growth should satisfy the needs of that particular market. Track your Net Promoter Score, monitor your online ratings, and consider distributing a customer satisfaction survey to gain a better understanding of consumer sentiments.
2. Retail store clusters
There is strength in community. Shoppers want access, convenience, and ease of shopability. Franchisees can adopt the retail cluster model to align themselves with adjacent brands that serve the same shopper demographic. Shoppers can complete an hourlong workout, grab a quick bite for lunch at their favorite franchise, pick up their online order at their local retailer, and snag groceries for the week. Capturing new customers and repeat customers will be easier with a location strategy by looking through the lens of the retail cluster model.
3. Understanding the competition
Franchisee growth starts with understanding your customer and meeting them where they want to be met. Once you’ve nailed that down, you’ll want to understand the competitive landscape. Is the new location you are looking to open already saturated with offerings similar to yours? Or is there room for growth and providing a value-add to your given community? Developing a real estate strategy that fulfills the needs of a location’s target audience is key.
Businesses don’t often put enough weight on consumer data when making real estate location decisions. For many, it ends with demographics. But other data points can offer a clearer view of customers in relation to location, allowing you to establish a much more informed and effective franchisee location strategy. Get the right tools in place, and then start tracking the right data to minimize the many risks involved with franchise growth.