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Section: BUSINESS, Page: C1 Sunday, June 11, 2000 ; DANIELLE T. FURFARO Business writer


Store owners turn to various market studies, including an area's economy, population trends, street traffic and parking, to find where to set up shop

As the economy continues to soar, national and regional retailers keep adding stores, attempting to scoop up as much market share as possible.

To ensure that all these new stores don't go under as soon as the economy dips, retailers have developed market studies that pinpoint prospective locations and that analyze factors which can lead to a store's success.

Entire departments often do nothing but prepare reports from statistical data that can forecast sales by weighing factors such as household income, intersection traffic and crime.

Lowe's Home Centers Inc., for instance, which has its eye on the Capital Region, prepares marketing studies that use more than 400 statistics, including the demographics of the market area, space available at a proposed location and whether there is an existing Lowe's distribution center to service the store.

``We get down to the smallest detail as much as possible,'' said Brian Peace, spokesman for the North Wilkesboro, N.C.-based home-improvement retailer, which has stores in Wilton and Queensbury, and is said to be scouting for Albany-area locations. ``For instance, we have to determine if there will be enough parking, even for the busiest of times. If you can't meet the needs of customers on Fourth of July weekend, they are less likely to shop with you when things are slow.''

To companies such as Lowe's and its Atlanta-based rival, Home Depot Inc., it also is critical to know how many homeowners live in an area because they usually spend more fixing up their living space. Then it's good to know the age of the homes in the area, as homeowners tend to update and renovate older homes, and the rate of new-home growth, as homeowners tend to spend money on personalizing new homes.

Minneapolis-based Target Corp., which will open two Capital Region discount department stores this summer and plans others, concentrates on its ``core guest.'' Spokeswoman Patty Morris said that is a woman with a median age of 42 and a median income of $49,000 a year who has attended some college and has children living at home.

``We have found that our customers are the youngest, wealthiest and most educated of any that shop at discount stores,'' she said. ``We have branded ourself as an upscale discount store and people can see that we have our roots in the department stores.'' Other factors crucial to Target -- and most other retailers -- include the economic well-being of an area, highways and other roads leading to a location, and other retail stores that already are in a market.

``Companies are always concerned about what other retailers are in an area, because other stores can compete or draw business,'' said Jim Stone, president of Geonomics Inc., a Boston-based geographical information systems company that provides retailers, as well as market research companies, with the data and mapping software for them to conduct marketing studies. ``A company like Dunkin' Donuts might find that having a Wal-Mart down the street always leads to great business.''

Geonomics uses several databases, including the U.S. Census Bureau, city street and intersection maps, and economic information, to create software that a client can use to pinpoint any location in the country. Geonomics also is planning to release international software for its global clients.

Daytime population -- the population that works near a proposed store location -- also is important to retailers. In an effort to bring more retailers into the downtown Albany area, the Downtown Albany Business Improvement District is organizing its own marketing study to present to prospects. ``We can't really use things like census data since nobody lives downtown,'' said Pam Tobin, executive director of the BID. ``So we're going to survey the work force that comes in from all points.''

The BID plans to enlist the help of downtown employers, who will distribute surveys to their employees, and to question attendees at downtown events such as ``Alive-At-Five'' or to analyze license plates to see where vehicles come from.

Some mall developers and owners also prepare marketing studies for prospective tenants. Syracuse-based Pyramid Cos., which owns Crossgates Mall in Guilderland, Crossgates Commons in Albany and Aviation Mall in Queensbury, has done that for each of its 23 properties.

Adam Epstein, president of Site Analytics Co., a New York City-based demographic research company, said national retailers ``are inundated'' by developers with requests to go into an area.

``Shopping centers need some way to appeal to a retailer and we can give them the data that will give their requests focus,'' he said.

When Insignia/ESG wanted to attract Reading, Pa.-based Boscov's Department Stores to Clifton Country Mall, the mall management company spent more than $30,000 on an in-depth demographic study that compared Clifton Park to Wilton, which also was courting the retailer.

``Boscov's was concerned that if it put a store in Clifton Park, it would just be transferring sales out of its Colonie store,'' said William M. Morris, national director of mall leasing for Dallas-based Insignia/ESG. ``We showed them that Clifton Park was a separate market and that the transfer sales would be nearly negligible.''

Morris said the study also showed that Clifton Park had a higher household income, population and rate of new-home growth than Wilton. Last month, Boscov's signed on with Clifton Country Mall.

Other mall owners are content to wait for retailers to come to them.

``We've owned this property for 30 years and have done no studies,'' said Craig Samson, vice president of New York City-based Mall Properties, owner of Northway Mall in Colonie, which is being redeveloped into an open-air shopping center with several big-box tenants, including Target. ``Retailers will find their way to us when they are ready to expand.''

In an era in which the information being sought has become far more complex, companies that analyze data and prepare in-depth studies for retailers and developers are on the rise.

``We provide expertise to the smaller and midsize retail chains that can't afford to dedicate an entire department to doing this type of research,'' said Site Analytics' Epstein.

The company has created the ``Bullseye Model,'' which helps retailers forecast which sites will be the most successful. Using the model, researchers choose the variables that would be most critical to the retailer and apply the data to each prospective site.

Site Analytics also has a similar product, the ``EvaluSite Report,'' for mall owners and developers.

``Many retailers are leery of moving into second-tier cities like Albany,'' Epstein said. ``But when they take the time to investigate, they are surprised to find out that what goes on in Albany is similar to what is going on in the rest of the country.''

{Reprinted with permission}

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