The site selection process used to be based on broad data and intuition. Now companies and teams have the ability to build scalable location intelligence solutions in order to evaluate the potential of markets, submarkets, and specific neighborhoods. Our platform, Spectus, gives users access to our first-party, privacy-forward location data, as well as the opportunity to layer in external data to their datasets and analysis.
Market analysis
Understanding the health of a potential site begins with understanding the market(s) you’re looking to enter.
- What are the demographics of people in the area?
- What competitors have a foothold in the area?
- Is there a risk of potential cannibalization?
Answering these questions requires access to strong, supporting data, including demographics, home switching data, stops data, trajectories (how people move, and POI data.
Analyzing population and home changes also need to be a priority, especially at this point in time. When quarantine orders were first put in place, people evaluated their living situations, and many moved in search of optimal live/work settings. Many families and individuals fled large cities with less living space for surrounding suburbs, or submarkets. While major cities have seen residents return, population numbers have decreased in larger metropolises since pre-pandemic times.
Demographics
Analyzing the demographics of markets and the people who make up these populations is a key piece in the site selection process. Demographic data, such as race, income, age, and gender can help form an understanding of potential markets and neighborhoods. Within the Workbench platform, users can layer in external census data, with our first-party, privacy-first data to dig deeper into their research.
Digging deeper into demographics data builds an understanding of who potential customers are. From here, you can anticipate inventory needs, market strategy, and potential employment pool. Knowing the characteristics of who lives in a prospective market or area is the bedrock of business operations and success.
This information is especially important in the current state of society. The pandemic forced individuals to look at their living situations. Major cities across the country saw populations decrease. The New York City metro area saw an average of 84 people move into the city for every 100 people who moved out during the pandemic. At the same time, Stamford, Connecticut, a city around 40 miles north of Manhattan, saw a population increase of nearly 14%. Home switching such as this change the buying power of a local population and need to be accounted for during the site selection process.
Origin of relocation
Understanding where people are moving from equips users with the information needed to predict the future of a market. Residents moving from higher income neighborhoods to lower income neighborhoods could signal gentrification coming to an area or market. With migrations such as this, opportunities for new locations at more reasonable prices create a major opportunity.
Coupling census block group data with Spectus’ first-party, privacy-forward data produces another layer of market analysis. The home mover notebook available in Workbench was developed to determine where people are moving from and where they are moving to. By understanding who is moving out of a market, you can gain insight into the different personas living in the market.
Using Spectus’ home and work tables, coupled with census block group data, our team created a gentrification heatmap of Los Angeles. This process allowed our team to understand which neighborhoods in the LA area were changing based on income level. Using similar techniques, organizations can identify opportunities to enter or grow in emerging markets.
Residents vs. Vacationers
By looking at the length and origin of trips to a given area, you can differentiate between residents and non-permanent visitors. This allows companies to build seasonal forecasts, and understand the fluctuation in buying power and habits from individuals in a specific area.
Using Spectus’ Stops data, this category of analysis can be constructed by setting specific parameters of the distance people travel and how long they stay in a certain area. Our team created a comparison map of visits to popular locations in New York City by residents and visitors using this tool.
Nowcasting and Forecasting
Companies and organizations have begun putting an emphasis on nowcasting in conjunction with their forecasting models. Nowcasting is identifying trends and predictions on a short-term basis – one, three, five days or so. This allows for business decisions to be made in real time, as consistent information flows in.
Nowcasting allows companies to build short-term trends, which can help inform long-term forecasting. As we mentioned above, differentiating residents and vacationers can help determine foot traffic and buying power at certain times of the year. These short-term trends then become building blocks in long-term forecasting models.
Pedestrian foot traffic
Possibly the most important data to look at is the foot traffic around potential locations. When conducting analysis on potential new locations, you want to ensure there is enough organic foot traffic to make the investment justifiable.
Foot traffic has become increasingly important over the past few years. People are no longer moving and traveling the same as they were before. Typical rush hours no longer exist and people don’t make the same daily trips that they used to. Before the meteoric rise of remote work, errands were completed during the commute. Now, errands are made whenever it is convenient for an individual. Because foot traffic patterns have changed, the way they are analyzed needs to follow suit.
Origin and destination
Analyzing origins and destinations of individual trips needs to be layers into foot traffic analysis. Using Spectus’ trajectories datasets, Workbench users can understand where individuals begin their trips, end their trips, and the routes they take in between. This added context builds aggregated behavior analysis in specified areas of potential markets.
Note: A trajectory is how an individual went from one place to another. A trip is the details of an individual visit, including the places they stopped and their dwell time at each certain location.
Analyzing the origin and destination of QSR visitors is crucial in the current state of work. Quick-service restaurants once served as the destination for individuals working in downtown areas, where professionals stop for coffee or grab their midday meal. Now according to Kastle Systems, office occupancy has fallen from nearly 40% on December 8th, to around 18% on December 29th. Now, companies such as Tim Hortons are seeing their suburban locations achieving greater success than their downtown counterparts.
As return-to-the-office numbers continue to fluctuate, analyzing the origin of individual trips requires more attention than ever before. Companies and teams need to look at where people are coming from, and how far they are traveling now to frequent a location.
Mode of transportation
Tracking the available modes of transportation adds a layer to any decision making process. Locations within a close proximity to bus stops, metro/subway stations, and even bike racks have added value built in. From here, you can infer who is passing through the area, how they’re getting around, and where their trips originate from.
It’s also important to note the infrastructure within markets and neighborhoods. With the rise of shared mobility (scooters & bike sharing), there has been emphasis on local travel infrastructure. In addition to safer conditions for pedestrians, these improvements also lead to significant economic upticks. Bike lanes and improved pedestrian infrastructure can lead to an ROI of $11.80 per $1 of infrastructure investment, a valuable piece of information for your site selection analysis.
Competitive analysis
Running a competitive analysis is a crucial step during the site selection process. Monitoring surrounding businesses gives insight into the health of the area, potential performance of an anticipated location, and which of your competitors already has a presence in the area.
Data on individuals
Just as you look at the demographics of a certain area(s), you need to look at the attributes of individual stores, or points of interest (POI), and the customers who are frequenting these locations. This means looking at movement patterns surrounding neighboring POIs, dwell time at a certain location, and popular destinations following a visit. This also includes understanding the demographics of the individual visitors of surrounding locations.
POI data
Using our POI data will help bolster competitive analysis models. Users can understand which companies have footholds in certain locations, as well as check for complementary businesses in potential markets. A gym chain may look for grocery stores, smoothie shops, or spas within a certain distance of prospective locations. With more than 16 million points of interest available, Workbench users can gain a deeper understanding of who their neighbors could be and what locations will suit their needs the best.
Differentiate visitors purpose
When it comes to fast-casual restaurants, it’s important to differentiate the personas who frequent your existing location. It’s necessary to gain insight into who is coming to the restaurant and what the purpose of their visit is. Separating out who is a gig worker, like a DoorDash or GrubHub driver, who is there for drive through or takeout orders, and who is dining will inform restaurant operating protocols, and the value of their store’s location.
Because we are able to collect data consistently, users can understand the dwell time of individuals and other segments, and remove specific groups from their analysis. For example, if a device is at a specific location for more than four hours, four or five days a week, it’s understood that the individual is an employee and should be removed. Likewise, someone dining in a restaurant would have a longer dwell time than someone going through the drive through or picking up a takeout order.
Avoiding cannibalization
Another point of the site selection process is self cannibalization. When digging into expansion potential, it’s important to understand where your presence already exists. Self-auditing current sites and footholds is as important as every other aspect of the site selection process. Establishing a new location too close to another could detract business from an existing location.It’s important to understand neighborhood dynamics, mobility and foot traffic patterns. Using Spectus’ trade area data can help bolster the site selection process, including market analysis, competitive analysis, and possible cannibalization.
Let’s learn about your business’ needs and how starting with human mobility analysis can fuel growth substantially faster for businesses and innovation teams who see the value in location data. Unlock the potential with Spectus.
