Using Location Intelligence to Attract Retail to Underserved Areas (cont.)

For example, if a community wants to attract a discount department store and the nearest existing store is more than five miles away, it is imperative to highlight to the potential retailer that several million dollars in demand exists for this category, with no competition within a five-mile radius. Further, if the nearest competitor is a smaller retail operator, it should be emphasized that the new site could capture a significant proportion of the competitor’s sales.

Recruiting the retailers

Once these data are gathered and the relevant retail categories or operators are identified, it is time to get the most important information in front of the retail real estate executives. Companies such as Trade Dimensions and Chain Store Guide can provide data on the appropriate contact person, and most retailers have Web sites with contact information available. Once this step is complete, the economic development group can put together a short packet highlighting the relevant information.

The packet should be no longer than 10 pages and should include charts, graphs and bullet points. The packet should summarize the trade area or areas, key demographic characteristics, lifestyle clusters and other factors that are unique to the site, such as a high daytime population or newly constructed freeway interchange. By focusing on data and unique elements of a community, the economic development team can present to the retailer why their community is an ideal location. Particularly for underserved urban areas, it is critical to elaborate on the sales potential for the retailer.

For large-format stores, retail development is planned at least three years in advance. However, to retain interest from a retailer, persistence can pay off. Once the market study packet has been sent, make sure to follow up with phone calls and agree to meet at various trade shows. Continue to keep the retailer informed of any changes in the market – for example, if new housing units are suddenly announced, especially ones that will increase the number of core customers based on the lifestyle segmentation clusters.

While it may seem like a daunting task, it is possible to attract major retailers to underserved areas. Take Chicago’s south side, where the Target Corporation opened a store after years of diligent persuasion. This opening inspired confidence in other retailers to tap into urban areas. After the move into the south side, Target is actually beating its original sales forecast. Part of the push to attract Target was the dense population and the level of untapped potential in the underserved market.

More and more retailers are beginning to understand that they are missing significant sales potential in urban markets. While there is a trend towards returning to underserved urban areas, it is imperative that cities and neighborhoods actively encourage retail growth by providing retail operators with the data and materials they need to make the right decisions. As more and more success stories emerge, such as the Target on Chicago’s south side, more retailers will be convinced to locate in our cities’ underserved neighborhoods.

MapInfo provides location intelligence solutions, integrating software, data and services to provide greater value from location- based information. For more information, visit www.mapinfo.com.

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