Site Planning Strategies for High-Footfall Retail Locations

Site selection is an essential factor in the success of any retail brand when considering high-traffic locations. When a retailer considers location for new stores without a strategic site planning, the site is likely to open with low sales. For retailers that are expanding into new markets, site selection should consider a various number of factors which includes accessibility, visibility, zoning, parking, and foot traffic.

Retailers that consider customer behavior, traffic flow, and population development generally outperform their peers that do not give much consideration to their new retail locations. Regardless of the many layers of location or site planning, from market research through to store delivery, each layer must be data-driven, insight-led, and provide a clear vision of retailing success.

Laying the Groundwork for Retail Expansion with Market Entry Strategy

A thorough market entry strategy is necessary prior to any brick-and-mortar rollout. This strategy dictates the way a brand presents itself within a new territory, establishes itself in that market, and effectively competes. For high-footfall retail, the strategy must focus on assessing macroeconomic indicators, commercial real estate activity, urban growth opportunities, and consumer behavioral change.

A solid expansion road map outlines the step-by-step approach to effective market entry. It begins with determining target cities and/or regions based on disposable income levels, consumption patterns, and fit within local culture. A retailer’s consideration of retail saturation levels and growth in local infrastructure (both of which impact in-store performance) is important as well.

The strategy must also determine flagship store placement within identifiable commercial districts. This is important as the flagship store contributes to establishing the brand. Additionally, adjusting offerings to better fit local product preferences is more likely to result in market acceptance. Planning should be done at least 5 years out. The goal is not about opening a store, but about establishing a lasting and sustainable presence within newly identified markets in a manner that is profitable.

Using Demographic Analysis for Retail Growth Strategy

Retailers seeking continuous growth must effectively use demographic analysis to modify their overall retail growth strategy. Demographics are valuable information sources that reveal data on population density, age, income, purchasing habits, and preferences all of which have an effect on place performance.

For instance, a luxury fashion brand may want to look for locations consisting of more affluent professionals, while a lower-cost retailer might find their market in more pricing-sensitive communities. An understanding of the target customer provides guidance on how to eliminate many potential expansion sites, and seek out alternative locations that reflect their brand values and price point.

With the use of data analytics tools, retailers can ultimately map locations in a city where every market within a city has high-potential clusters based on its analysis. Demographics plus psychographics provide a complete customer profile that can determine where to locate stores.

Retailers who operate in high-impact areas will have higher expectations from their customers and will have to exceed those customer expectations in order to achieve success in retail growth. The retail growth strategy of a retailer needs to specifically outline expectations of every aspect of the experience: store environment/store layout/local hiring/fixed operations hours, etc. Implementing a data-driven approach to location and demographic planning will also help retailers achieve higher conversion ratios, have a greater impact on customer agreement to return, and positively impact overall profitability.

Using demographic analysis to improve the effectiveness and efficiency of their growth objectives will also help retailers ensure that each store is providing the right customer with the right store experience at the right time.

Understanding the Competition Before Launch

Good retail site planning relies on an understanding of competitors. Retailers should assess the number of competitors, their strength in a defined zone, their pricing strategies, store layouts and customer engagement tactics.

Competitive intelligence provides visibility into the ability to capture sales from that marketplace by identifying recognized service gaps or areas of the customer base that would be underserved. For example, if an organic grocery retailer opened a store where the vast majority of competitors were conventional food retailers, they could still have a viable store if the site location was right. Retailers need to also assess footprint to competitor traffic counts, promotional cycles and loyalty program value, any of these factors can impact a site for competitive advantage.

Competitive mapping tools, as well as footfall tracking services, provide valuable insights into how existing players in a marketplace perform, as well as, where opportunities may lie. On occasion, creating proximity to competition can bring traffic, while in other environments it can create price wars. The deciding factors tend to be experiential excellence, convenience, or the fact that you are organized around localized elements that accommodate shopping experience.

Even when considering competitive analysis to avoid saturated environments, it is about understanding where you can pull from and make shopping a more enjoyable experience that retains customers in the longer term.

Phased Growth with Geographic Expansion

Once retailers have determined viable retail locations, they can create a retail rollout plan that aligns their retail growth strategy with their overall business objectives and resource availability. Using a carefully managed strategy for geographic expansion allows retailers to achieve growth and to effectively manage both their financial capital as well as their operational capacity.

Retailers will often launch and identify high visibility locations with some key flagship stores at major intersections or downtown areas, before moving to smaller clusters of retail outlets or kiosks in transit stations, malls and high street situations. This “hub-and-spoke” retail strategy allows retailers to begin training conversations in diverse geographic areas with minimum investment, while simultaneously building exposure and some familiarity in the various consumer demographics.

The rollout plan should articulate the timing and structure with all of the key inputs: marketing support for roll out, staffing models, training, inventory-flow and performance metrics. Pre-sale buzz and community-engagement activities will also be important to funnel the traffic from the very first day!

The rollout plan should also incorporate technology-enabled tracking of sales volume, foot traffic, and customer feedback at every new location to course-correct real time. A successful rollout includes managing these locations sweat-free, which can best be achieved by allowing retailers to learn and incorporate into geographic expansion. Retailers can capture all of these insights so that expansion into new areas occurs strategically and with an ever-growing sense of return on their investment.

A pre-rollout retail execution plan that is well-planned and executed minimizes risk, mitigates customer readiness in new locations while facilitating growth in a scalable geographic retail network.

Final Considerations: Sustainability, Visibility, and Traffic Drivers

Final considerations in determining high traffic retail store locations include: sustainability, traffic generators and long term exposure. Having access to transportation, schools, businesses, and residential areas go hand-in-hand with determining how a retailer can expect to perform.

In addition, the considerations surrounding sustainable site selection are becoming more important. Retailers are now looking for sites with certified green building initiatives, energy-efficient spaces, and connections with local communities which enhances not just the brand reputation but reduces cost of goods through reduced operating costs.

Visibility is an important aspect for attracting impulse shoppers. Generally, corners, intersections, or mall entry points have more visibility than mid-block locations or upper-level floors. To truly assess visibility, retailers should assess lighting, signage policies, and accessibility.

Traffic drivers, such as anchor tenants (in malls), community events, or attractions play a significant role. Retailers like to locate in areas which have naturally occurring footfall as they provide a more reliable stream of revenue than some footfall generators.

If all of these factors can be balanced correctly when selecting new store locations, there is a reliable expectation that new store locations will not just attract footfall but produce loyal customers and guarantee better outcomes in today’s retail climate.