Consumer demands for convenience are putting pressure on retailers to adapt.
Real estate and marketing decisions are under scrutiny as consumers are turning to online solutions, and preferring to travel shorter distances to retailers.
Do You Know Your Trade Area?
When your business first opened, your core customers may have been willing to drive 15 to 20 minutes to your location. That time has likely been cut in half.
Consumers now make many of their purchases online, which means they are traveling less frequently to physical stores. And, when they do visit a brick-and-mortar retailer, they aren’t willing to travel as long or as far to get there.
Don’t let these statistics scare you—if brick-and-mortar establishments understand where their best customers are located within their current trade areas, there are still plenty of opportunities to reach more of them.
Your trade area can be determined using your customer data combined with consumer behavior insights from mobile GPS data to create detailed models based on your best customers. These models can help you answer questions like:
- What is my drive-time trade area – the amount of time my customers are willing to drive to get to my location?
- How can I increase my return on marketing investment when trying to reach new prospects?
- How are my locations performing in my trade area?
It might be time to reevaluate your trade area and narrow your focus to only the customers who are within an optimal drive time of your location. Use your data and customer profiles to uncover where the opportunity is in your market.
How to Compete When Convenience is King?
Once you’ve identified the trade area for your best customers, here are a few retail trends you can capitalize on to drive foot traffic:
- Embrace online shopping. Because of the pandemic, many consumers now expect online shopping and curbside pick-up to be an option and will be disappointed if it isn't. This strategy is a convenient option for customers and can help you avoid costly shipping fees, while also presenting an opportunity for additional sales once a customer is in front of your merchandise.
- Rightsize your existing locations. It might be time to reduce your store footprint. You may find that some locations are no longer in the right area to attract customers, while others could benefit from a new, smaller location. Rightsizing your stores can help you better serve your best customers and optimize your existing store network.
- Create in-store experiences. When your customers do make a visit to a retail store, they are often seeking an experience that separates the physical from digital. Find new ways to give your customers an opportunity to engage with your brand and have a good customer service experience offline, encouraging in-store visits.
The Bottom Line
The retail industry may be changing, but by understanding the evolution of your customers and trade areas, you can design strategies for success for years to come.
Need help getting started? Learn how Buxton helps retailers define their customers, trade areas, and more.
