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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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