Location Intelligence is one of the most powerful tools to help the entrepreneur in setting up a retail operation. You’ve no doubt heard of demographics and maybe even psychographics but there is an art to finding a location and the combination of all 3 is ‘location intelligence’.
Demographics refer to the selected population characteristics as used in marketing or opinion research. Commonly-used demographics include race, age, income, disabilities, mobility, educational, home ownership, employment status, and even location.
In contrast, psychographic variables are any attributes relating to personality, values, attitudes, interests, or lifestyles.
Location Intelligence is the capacity to organize and understand geographic relationships and how they relate to business placement. By combining geographic- and location-related data with other business data, i.e. demographics and psychographics entrepreneurs can gain critical insights on where to locate their business.
A client came to me a couple years ago asking help to close a leasing arrangement for a hair salon in Vancouver. When I went to the shop it was 3 blocks from a major intersection in East Vancouver, a popular ethnic destination. Being a Hispanic woman, my client had identified the area as a good source of customers as the local population had a strong Spanish demographic. She further identified the area as a good psychographic profile because the surrounding stores made it comforting to shop and the stores also had focused on the ethnicity of the people in the area.
Houston we have a problem! The rent was 3 times cheaper than an available space at that good intersection three blocks away. It needed work which the leasing agent said forget about it, take it as is. Upon inspection what did we find? There were no other businesses in that block that could draw customers, walk in traffic was non-existent because people did not like to walk that far and there was traffic /parking restrictions outside the shop. The shop was on the wrong side of the street. It was situated on the side of the street where cars coming into town at rush hour would find convenient. Many people go to a hair salon on the way home from work so it was on the ‘wrong’ side of the street.
We visited the vacant shop at ‘the corner’. It was very expensive in the mind of my client. The realtor was very knowledgeable and the following Q & A showed her expertise was very valuable and based on research. With my blessing my client signed the lease to the more expensive location that, unlike the cheaper place, came with a new paint job, a month’s free rent, new carpeting, and a really pleasant landlord with whom she could actually speak Spanish. She was happy yet scared to death about the risk
What risk? By choosing the right location with the critical intelligence gathering process she went on to develop a very successful hair salon that she only wished she had more space to expand.
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