How geospatial data can optimise your site selection process

June 23, 2023

Use geospatial data to avoid guesswork and make site selection and network planning decisions that maximise the growth of your business.

Here’s how you can use geospatial data to avoid guesswork and make site selection and network planning decisions that maximise the growth of your business.

Know where your customers are

If you have strongly defined customer personas, you want to find areas where those customers are in abundance for your next store’s location. With this silhouette of who your most valuable customers are, the power of demographic data (like Census data) can come to the fore and guide your decision making with greater surety.  

More specifically, demographic data that’s spatially correlated to your areas of interest is incredibly potent information to have at hand, primarily because it can look beyond basic population statistics to uncover the real quality of your customers within the surrounding region. Armed with this knowledge, you can make insightful choices on which potential sites have the greatest chance of succeeding and avoid the costly mistake of a low-performing location.

In fact, you could even reverse this process to analyse high-performing stores in your network, uncover demographic insights, identify trends and apply those insights to your future site selection process.

Understand who can reach your store

If you have other stores in your network, you might have already performed research into understanding how far your customers are willing to travel to reach them. By combining this knowledge with a catchment analysis – using location data to understand accessibility to a particular point and create a ‘catchment’ – you can predict how many people (and hopefully who, as well) fall within your prospective site’s store catchment.

Whether you have insights on existing store catchments or not, however, a catchment analysis of the site(s) you’re considering is a powerful method of discovering how accessible it is. By understanding accessibility – either by car, public transport or on foot – you can gauge a variety of predictive factors for success. Are there any accessibility barriers that shrink the number of people who can easily access the site? Are you at risk of cannibalising an existing store in your network? How many people are within a 15-minute walk of the site?  

Plus, beyond knowing how many people can access your site, you can combine a catchment analysis with demographic data analysis to uncover insights on the ‘who’ of your potential customers within a specific travel radius; information which can give you refined insights and far greater chances of a successful store activation.

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Know your competitors' strategy

Catchment analyses are insightful for understanding and growing your own store network, but they can also be used to better understand your competitors. This includes gleaning insights on their network planning strategy and to identify gaps you can exploit.  

By defining your competitors’ networks and running a catchment analysis, you can get an outsider’s view of how far their customers might be willing to travel to reach their stores - information which is particularly useful for stores with a strong destination to impulse purchasing ratio.  

Knowing this, you can find gaps in their network and take advantage with a well-placed store of your own, as well as tentatively compare this information to your knowledge (if it exists) of distance decay of your own brick-and-mortar stores.

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Understand visitation

Geospatial data can tell you how many people live around your site, but it can also give you insights into visitation to and movements through the area. Traffic data, for instance, can illustrate how many people drive past a location on a daily basis and the times at which they travel there, indicating the potential exposure your prospective store might receive to passers-by.

New and relatively untapped datasets like People Movement Data (mobile phone data) can offer a completely new dimension of insight into potential sites, too. By understanding how people move through cities, towns and public spaces on a granular level, it’s possible to learn where people congregate, how long they spend there (which itself has a strong correlation to economic activity), where they come from to reach the area and more.

With this information, you can actually understand the who, why, how and how much of visitation and general activity in and around the area you’re investigating – all of which leads to deeper insights and more successful stores.

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