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How Did that Store Get There?
Issue 2 - Site Location Factors Part 1: Demographics & Access, Visibility and Traffic
This issue of How Did That Store Get There? covers a few of the factors that a business considers when choosing a location. There are many factors considered, including demographics of a community, site accessibility, visibility, and area traffic. Demographics provide an understanding of the potential customer (for example, do they have income to support the price point of the goods sold).  Does the area have a sufficiently trained workforce to hire employees from?  Factors relating to accessibility, visibility, and traffic include the ability of delivery trucks to access the location, the ease in which customers can travel to the business, and other accommodations related to conducting business.

Demographics

When a business is considering locating in a community, they conduct extensive research on the market area before making a final decision. They will obtain demographic information on household income, daytime population and consumer spending patterns. Depending on the business and target market, the business will look for minimum income levels and age groups. The goal is to understand where potential customers live, work and shop before making a location decision.

For example, say that a retail store called “Traveling Jim’s” knows that their consumers average family income is $100,000 a year and that they attract most customers from roads that have over 40,000 average daily trips per day.  If a particular location does not meet these criteria, the site will not be evaluated for further consideration

Trade Market Area

Businesses want to offer a product in an area where there is demand by the consumer at a certain price that the consumer is willing to spend for the product.  Some of the questions considered are:

  • How far away is the nearest competitor or franchisee?
  • In the trade area, is there consumer demand or are there already too many similar products offered?
  • Will locating a store in this area hurt existing store sales?

Accessibility, Visibility and Traffic

Business want to be located where there are many shoppers, but only if that shopper meets the definition of their target market –which differs wildly amongst different businesses.  For example, small retail stores may benefit from the customer traffic of nearby larger stores. Generally, businesses examine:

  • How many people walk or drive past the location.
  • Is the area served by public transportation?
  • Can customers and delivery trucks easily get in and out of the parking lot?
  • Is there adequate parking?

When considering visibility, businesses look at the location from the customer's view point.  Can the store be seen from the main flow of traffic? Will their sign be easily seen? In many cases, greater visibility reduces the need for advertising. A specialty retail store located six miles out of town in a free standing building requires more marketing than a store located in a shopping center.

As you can see, there are several factors a business weighs before deciding whether to locate in a community or market area.  Many factors are beyond the Village’s control.  What the Village can control is a better understanding of market demands for retailers and promoting locations that best fit their market criteria.

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