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Strategic Site Selection: 3 Best Practices for Consumer Businesses
From The Buxton Co
Site selection has traditionally been viewed as a tactical activity. If a business needs to open 30 more units next year, the real estate team treats each site selection decision as separate process and executes that process with operational precision.
But the business and real estate landscape is shifting, leading some industry experts to call for a more holistic approach to site selection. Rather than viewing site selection as a necessary business tactic, they view site selection as a strategy.
How do you shift to a strategic site selection approach? In the remainder of this blog post, weíll share three best practices that can be applied to any consumer business.
1. Think Long-Term: Identify Your Total Network Potential
Strategic site selection requires you to stop thinking about site selection decisions in isolation. Instead, you need to think about site selection in relation to the rest of the network Ė both current units and future units.
Rather than viewing each site selection decision as independent, you need to consider what your network will be at total build out. How will those units impact each other? Where should each unit be placed to yield the highest overall return?
Taking the time to identify your total unit potential and the optimal network configuration gives you a long-term roadmap for real estate planning. This can be accomplished through a market potential analysis for your brand or on a smaller scale through tools such as scenario scoring. Using the potential analysis recommended trade areas as a guide also can help to speed up the site selection process by allowing you to focus your real estate search on a narrower area that has already been vetted for competitive intensity, core customer presence, and other factors that drive your brandís performance.
2. Donít Neglect Site Selection Fundamentals
The best real estate strategy in the world doesnít matter if it isnít executed properly. Once you have identified the best strategic areas for new units and have developed your overall roadmap, you still need to pinpoint the best available real estate for each trade area. This is where qualitative analysis complements the baseline quantitative analysis.
Is the site on the right side of the road to capture traffic flow? Is the site easy to access? Does the property have good signage visibility? If you are evaluating an existing property, does the quality of the real estate match your brand standards? How much investment is required to make the site operational?
Mastering real estate fundamentals gives your strategy the best chance of long-term success.
3. Evaluate Current Unit Performance and Adapt Your Site Selection Plan Over Time
Trade areas evolve over time. What was once a great site may not be as strong 20 years later. As you continue to build your network, evaluate current unit performance. Are there any sites that need to be closed or relocated? How will that shift your long-term unit plan?
Units that are in good locations may still benefit from additional investment to realize their full potential. Consider whether there is anything you could do to boost that siteís performance and realize the full return on your real estate investment.
Finally, competitive landscapes and business models shift over time too. If you change your operating model, begin to target a different group of customers, or face major industry changes, you need to revisit your long-term plan to ensure you are basing your strategy on the current environment.
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