Using Location Intelligence to Attract Retail to Underserved Areas

by Patty Formosa, Director of Economic Development, MapInfo

Municipalities often have to take the lead to attract retail development. Plymouth, Michigan, which has retail springing up all around it, successfully found a niche by establishing a vibrant shopping area centered around a park.

Many, if not most, U.S. cities experienced population decline in their densest areas over the past 40 years. As people moved out of urban neighborhoods, so too did retailers, who followed many of their customers to far-flung suburban developments.While it makes economic sense that retail development focuses on growth areas, this trend has left many central cities with little or no retail options for their remaining residents.

Recently, municipalities of all sizes have begun seeking location intelligence solutions to help them identify and recruit retailers, in order to provide shopping and employment opportunities for residents and increase city tax revenues. This combination of tools, including software, data and expert services, helps organizations identify opportunities that are overlooked through traditional demographic data and analysis. Using location intelligence, municipalities can leverage mapping, other location capabilities and psychographic (lifestyle) data to benefit their efforts during the planning and execution of retail revitalization projects.

The first step in any retail development project is to understand the city or town’s retail trade area and demographics.

Are you being served?

Often, retail revitalization projects in urban areas are not created to serve the resident population, but to satisfy the retail needs of daytime workers or tourists and visitors to the area.

What remains, especially in smaller municipalities, is a consistently underserved segment of the population that must travel outside of the community for its retail needs.

While retail operators are beginning to understand that they are missing an entire segment of the population with significantly more buying power than previously accounted for, the move into typical urban neighborhoods has been slow. The number of success stories is growing, but some reluctance remains on the part of retailers to enter urban markets.

That means municipalities often have to take the lead to attract retail development. How do they do so, with limited resources? What type of information should be presented to retailers to generate interest? How is the information accessed? Municipalities have to learn how a retailer thinks, and present data stating why the retailer will make a good fit for the community.

When beginning the analysis process, the first step is to understand the trade area of the city and the demographics served within the area.When determining these data, it is best to avoid using mile rings as trade areas. These geographies are not reflective of shopping patterns, and usually retailers can pull that data for themselves. Also, the trade area most likely should extend outside city limits, as people’s shopping habits vary and typically will involve travel outside of the jurisdiction.

» Page 2 of 3