Site characteristics are critical to the success of the vast majority of retail and service businesses. When real estate professionals examine the potential of a location for expansion they examine a wide array of features, as the illustration below indicates.
There are two principal challenges associated with assessing site characteristics:
Challenge #1 – Standardization of Measurement
Some site characteristics lend themselves more easily to quantitative measurement than others. For instance, counting parking spaces or traffic volume on adjoining streets is simple, and comparison of one site to another is straight forward. Other elements are more difficult to assess – for instance, the quality of a particular position in the shopping center, strength/weaknesses and synergy of co-tenancy, and even visibility. A seasoned real estate analyst tends to have a good “gut feel” or “sense” for the basic quality/direction of these more intangible elements, but converting these to standardized values takes the assistance of a professional location consultant accustom to this challenge.
SPR is especially adept at creating site evaluation metrics that capture the relative strength of the most challenging site factors. Where possible, we develop very specific criteria for categorizing and converting into numeric terms these more elusive factors. We create tailored site cards for our clients to use in the field that encapsulate the most salient site features that apply to their specific business type and brand. These site cards are designed to produce consistent values from one analyst to another. This effort produces a strong foundation for associates in your organization to communicate and share the merits of a site. Moreover, the ability to put in place an accurate and robust sales forecasting system in substantially improved.
Challenge # 2 – Accounting For Interaction of Factors
One major difficulty facing location researchers is how to combine features into meaningful composites that reflect the perspective of consumers. Shoppers do not just say to themselves “the visibility of that store is poor, I think I will shop another location.” Rather, they conduct a broad calculus of reasoning, often at a near sub-conscious level. They more likely think “is this store convenient.” After omitting distance as a factor there are still a large number of individual site characteristics that in concert help form the impression of convenience: proximity to ingress/egress points, position relative to surrounding retailers – both in the center and the proximate area, visibility (top of mind exposure and comfort), circulation of traffic in the center, parking availability, etc.
We are leaders in creating powerful site composite variables that express the relative strength of a location’s attributes. As a result, we have in many cases found significant site characteristic influences where other firms have just observed the noise and confusion associated with their focus on single factors.