When it comes to finding the location for your store, you may already understand the basics of the site selection process in build to suit development. But as technology and data are increasingly becoming more and more sophisticated, you will want to become more detailed in your approach.
“The goal is to turn data into information and information into insight.” – Carly Fiorina, former CEO of Hewlett Packard.
Here are some tips for a more strategic approach to site selection for your store location.
Assemble the Right Team
During the crucial site selection stage of searching for a new, viable location, you need an “A” team, so to speak, to increase your chance of being close to your strategic trade area. The team should cover all the bases — cost accounting, logistics, engineering, construction, environmental — just to name a few. Also, don't make the mistake of including the decision makers (if applicable) too late in the game by only presenting the final results. More communication helps promote buy-in and understanding of the highly analytical process.
If you do elect to hire an experienced developer as the expert to get it done, here are five questions to ask to ensure quality results.
Validate the Search Area
Typically, tenants start the site selection process with a general region of where the company should be based on a multitude of factors such as transportation, human capital needs, and other market dynamics research. Other components to consider when choosing your specific spot to grow include the laws, low barriers to entry, other tenant recommendations, and locations of your existing stores. Don’t think of each location as isolated but rather your overall network built out.
For a more data-driven approach, consider utilizing a geographic filtering process. Verify further by confirming the geography against your overall operating objectives and criteria.
It’s imperative to understand the different aspects of not just the baseline quantitative analysis but the qualitative analysis as well.
Quantitative items include:
- Traffic patterns - Where will the customers be coming from, and where are your competitors in relation?
- Demographics - Is the local population and traffic the ideal customer for your company? “Is your store in a strategic location to provide convenience to your targeted customer?”
Qualitative items include:
- Visibility - Are there trees, signs, or other buildings blocking the line of sight? Does the property sit low or high compared to the roadway where it might be tough to see?
- Access - Are there medians or "pork chops" limiting customer turning? Does the proposed site have easier access in relation to your competition? Are there future plans to expand that roadway that may impact access?
Consider All Issues
This tip encompasses taking detailed accounts of your prospective site’s critical location factors, specs, needs, timing and risks. As mentioned in the previous point, don’t be tempted to only consider the easily quantifiable aspects, like labor costs, real estate, and taxes.
Another factor, for instance, is community trends because every site is connected to other towns, labor, demographics, politics, and real estate markets and they can vary year to year. Here are some other mistakes to watch out for.
So if you are going through your growth plans for a new store location, refer to these tips for a more strategic approach to the build to suit site selection process. Also, keep in mind the pros of partnering with a pro developer who has a solid scorecard of experience.