Site selection for your business (or product) is anything but simple.
Whether that’s selecting where to open your next brick-or-mortar store or choosing the most-appropriate distributors for your products — choosing the right location is never easy.
Familiar with the situation?
You’re probably asking yourself:
- Does the location align with your target market and demographic profile?
- How accessible is the location in terms of transportation and parking?
- Will the cost of rent or property ownership fit within your budget, and is it reflective of the potential revenue?
- Are there any potential risks or challenges associated with the location, such as competition, crime rates, or environmental factors?
- What is the level of competition in the area, and how saturated is the market for your products or services?
- Are there any specific amenities or services nearby that could attract customers or benefit your business operations?
- How supportive is the local community and government towards businesses like yours, and what incentives or assistance programs are available?
- Will the chosen location provide sufficient space and infrastructure for your current and future business needs?
And more questions that are relatively easy to think of, but hard to answer.
Especially without the right tools.
In this blog, we’ll be covering the top 7 factors you need to consider during your site selection process — which will help answer the above questions — and succeed in choosing the best location for your business or product distribution.
For each factor, we’re exploring an approach that not only streamlines site selection but also effectively minimises associated risks and costs when compared to traditional methods: Location Intelligence.
What is Location Intelligence?
Location Intelligence involves extracting insights and recognising patterns from geographic data, including Point of Interest (POI) data, which encompasses various specific locations like businesses, landmarks, and services.
This data involves elements such as addresses and coordinates and supports informed decision-making.
By merging geographic analysis with business data, Location Intelligence offers valuable insights into market trends, customer behaviour, site selection, and logistics optimisation.
(We have an in-depth POI data guide, available to read and download here.)
1. Popularity
Especially for businesses reliant on physical visits, understanding both the popularity of a given area of point of interest is vital for success.
Popularity shows not just the mere presence of potential customers. It reflects the area’s appeal, attracting crowds and fostering a lively commercial environment.
And get this insight, businesses can use popularity data.
Through this data — based on digital traces — you can estimate footfall accurately through digital content, aiding effective site selection and peak/off-peak time strategising for optimised marketing efforts and investment decisions.
By meticulously analysing these factors, businesses can pinpoint strategic spots that offer the optimal blend of visibility and convenience, paving the way for sustained growth and customer loyalty in an ever-evolving market.
2. Sentiment and perception
By analysing sentiment data sourced from platforms like social media, businesses can gain a nuanced understanding of how their target audience perceives different locations or services.
This information is gold for companies seeking to align their offerings with consumer sentiments, ensuring they cater to preferences effectively.
For instance, sentiment analysis can reveal whether a particular area is regarded positively or negatively by the community.
Positive sentiment might indicate that a location is seen as trendy, safe, or desirable, making it an attractive prospect for businesses looking to set up shop.
On the other hand, negative sentiment could signal issues such as safety concerns, poor infrastructure, or a lack of amenities, which might deter potential customers, revenue and reputation.
3. Local business dynamics
Understanding the business landscape of an area can help you decipher invaluable information about it — including its economic potential as well as consumer preferences.
For instance, if an area is home to a variety of trendy cafes, entertainment venues, and tech stores, it suggests a vibrant and youthful demographic, looking for more modern and innovative offerings.
Similarly, if the predominant businesses are traditional diners, retail outlets, and service providers, it indicates a more conservative consumer base with different preferences and spending habits.
Through this information, enriched with further data on the area’s sentiment and popularity, for instance, you can identify opportunities for new ventures, assess market saturation, and tailor products or services to meet the needs of the local population.
4. Competitive landscape
It’s essential to grasp not only the business landscape of an area but also its competitive environment.
Assessing the competitive landscape involves analysing factors such as the number and types of competitors, their market share, strengths, weaknesses, and strategies.
This knowledge helps businesses identify opportunities and challenges in the local market, determine their unique value proposition, and devise effective competitive strategies. Moreover, understanding competitors’ offerings and customer base enables businesses to differentiate themselves, innovate, and stay ahead in the market.
By gaining insights into the competitive environment, companies can make informed decisions about site selection, ensuring they enter markets where they can thrive and gain a competitive edge.
Choosing the right POI data provider
Deciding to opt for data-driven decisions is great. Finding the right POI data provider for you is even better.
Read our guide to choosing the ideal POI provider here.
5. Market potential and growth opportunities
For any business or product to thrive especially in the long-term, there needs to be market potential and growth opportunities.
So, understanding the market’s potential to analyse factors such as population demographics, consumer behaviour, economic indicators, and industry trends is indispensable to help businesses identify target markets with high demand for their products or services and assess the growth prospects of those markets.
In doing so, businesses can strategically position themselves in areas poised for expansion or emerging trends.
This might involve targeting underserved demographics, capitalising on new technologies or consumer preferences, or tapping into niche markets with untapped potential.
Additionally, assessing market potential and growth opportunities allows businesses to align their expansion plans with market dynamics, minimising risks and maximising returns on investment.
6. Infrastructure and amenities
When selecting a site, it’s paramount to consider both infrastructure and amenities, as they play pivotal roles in determining operational efficiency, employee satisfaction, and customer experience.
Infrastructure encompasses vital elements such as transportation networks and utility availability, while amenities like restaurants, retail outlets, healthcare facilities, and recreational areas contribute significantly to the overall quality of life within the area.
Using POI data, such as the proximity of metro stations or other transportation hubs, provides valuable insights into the accessibility and connectivity of a location.
This information helps businesses gauge the ease of commuting for both employees and customers, reducing logistical challenges and enhancing convenience.
7. Distribution and supply chain logistics
In the strategic process of site selection, distribution, and supply chain logistics are crucial, as they’re likely to shape your efficiency and competitive edge.
And while there are many factors to keep in mind, the top ones businesses need to consider are:
- Proximity to suppliers: Reducing transportation costs and lead times is essential for optimising budgets
- Robust transportation networks: Infrastructure such as highways and ports, accelerate distribution and enhance customer satisfaction.
- Proximity to key markets: Lowers costs and strengthens market presence.
Site Selection with Data Appeal’s offering
Effective site selection strategies may seem complex. But we make it simpler.
Data Appeal offers Location Intelligence solutions, perfectly tailored for site selection.
Our proprietary Popularity Index, you can predict attendance patterns, including peak and off-peak times, and seasonality where available. It offers detailed analysis by time of day and visitor origin, applicable to any POI or territory as granular as 500 x 500 metres. With up to 5 years of historical data and 100% GDPR compliance, it empowers data-driven decision-making for businesses.
Additionally, our Sentiment Index measures customer sentiment expressed online, providing insights into current and potential client behaviours. It evaluates individual Point of Sale (POS) performance against industry or competitor averages and assesses sentiment based on factors like safety, price, quality of services, and food quality. With up to 5 years of historical data, it equips businesses with actionable insights to enhance their offerings and stay ahead in the market.
Our data is available through various channels, including Data Pack files (in .csv/.xls format), API integration, Customised Visual Platform, and our data mapping solution D / AI Locations.
This user-friendly platform allows you to access comprehensive global location data, enriched with sentiment and popularity insights, all at a glance — turning complex data management into confident decision-making in just a few clicks.
POIs in Milan – Sorted by POI Type – Source: D / AI Locations
POIs in Milan – Sorted by Popularity Level – Source: D / AI Locations
Our site selection tools in action – supporting a multinational market expansion
Leveraging location data to capitalise on multinational market expansion prospects, a leading coffeehouse chain aimed to extend its presence in Eastern Europe.
Data Appeal furnished comprehensive geospatial data, offering insights into the region. Our precise POI datasets, augmented with detailed business information, sentiment analysis, and popularity indicators, empowered our clients to exert greater command over their data.
This facilitated improved site selection, market evaluation, strategic expansion, and sustained long-term prosperity, all achieved in a time- and cost-effective manner.
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