These days, some companies use a strictly eCommerce business model. Some of them do very well that way. They might have a physical location, but it is where they make their products and ship them, and it does not allow for any foot traffic.
Other business entities might have an online presence in the form of a website, but they primarily still do most of their business by selling to customers from physical locations. You could call this an old-fashioned business model since this is how establishments did business for many decades, prior to the internet's advent.
In this article, though, we're going to talk about a hybrid sales model. The companies that we're talking about have a website through which they sell their products, shipping them to interested customers, but they also have physical locations. Specifically, we're going to discuss how you can figure out the ideal spots to open new locations if this is the model your company uses.
Location Data Providers
What some people don't think about much these days is that they're walking around with their smartphones all the time, and those phones are tracking them. You can turn off your cell phone's tracking features, but very few people bother doing that.
Because your smartphone is tracking your movements, companies can compile data about your habits. This brings up some privacy issues, but the point is that these companies can collect data about specific locales and determine the intent of the individuals who visit there.
If you're a business entity and you're trying to figure out where to open a new physical location, you might look into location data provider solutions. You'll want to reach out to companies that compile data about specific locations because, when you do so, you can decide whether it makes sense to rent or buy a storefront there.
Why Is This a Better Way to Do Things?
The reason why this is a superior way of doing business is that if you can purchase data about a specific neighborhood or even about a particular street, you can know with complete accuracy how well your
business entity is likely to do there.
For instance, say you're a company that makes high-end men's shoes. If you purchase data from a company that sells it indicating that men with disposable income come to this part of the city to buy shoes, that means this is going to be the perfect spot for your new location.
In the past, you would not have been able to tell whether the spot you're looking at would work out or not. You might know that a neighborhood or street got a lot of foot traffic, but you would not have the advanced data that analytics provides.
Location-based data gives you your best chance to open up a new location that's going to be a hit with consumers. You still don't know with total certainty that your target customers are going to come into your store, but this is a much more targeted approach than the alternative.
Why Is It Worth It to Do This?
It's true you can skip the step of buying location-based data, but if you do, and you open a new store location basically on a hunch, you potentially risk hundreds of thousands of dollars or more on a store location that could turn out to be a bust. If that happens, your entire operation might go under because of this one mistake.
If you don't own the company you represent, but you're in a high-ranking position in that company, this misstep might mean that those at the top lose faith in you. They might fire you from the business or demote you.
If you look at it in this way, you can start to see how valuable location-based data buying can be for your business. When you find the right company and buy this data from them, you can predict what the foot traffic will be like, even breaking it down to the best days of the week to have flash sales or other location-specific events.
If you don't have a limitless operating budget, which is the case with almost all companies, you have to find the right spot to open your new store or stores. This is one way you can do that, so look into location data providers and engage the one that has the stats you need.