If you’re looking to bring new retailers into your city, it’s important to know what type of demand there is among your population. One way to find out where the retail in your community isn’t meeting the demand is by using a retail opportunity gap analysis.
When you know what people are leaving your community to buy it empowers you to take steps toward stopping retail leakage. With a reliable gap analysis to work from, you can begin an educated retail recruitment campaign to bring in the appropriate retailers and stop the revenue bleed.
What Is A Retail Gap?
When people living in your city’s retail area leave to shop elsewhere, it indicates your population has a demand that’s not met by the current supply in your community. This gap between demand and supply is what we mean when we talk about a retail opportunity gap. We also call this “retail leakage.”
This gap represents the potential to fill a demand by bringing new retail into your community. When you have a reliable opportunity gap analysis to work from, then you have a starting point for targeting retailers that fill the sales gaps in your marketplace
How Do You Find Gaps?
Getting a gap analysis is pretty easy. There are even online tools that will do it for free. However, those sorts of tools are extremely basic. They also don’t take into account all the variables needed to generate a reliable analysis of retail leakage/opportunity gaps.
The first step toward a reliable gap analysis is to accurately define your trade area. Then you’ll need to identify where the customer base within the trade area is spending their money. Those who are shopping outside of your trade area represent retail leakage. For these steps, it’s a good idea to hire a retail expert who will ensure the reports are accurate and useful.
How Can I Get Accurate Reports?
Estimating trade areas requires skilled judgment and experience. Concentric rings or drive times reports are too simple a method to provide more than basic information. That’s why Retail Attractions takes into account factors such as population densities, retail voids, competitive communities or retailers, natural barriers, traffic flow, accessibility, and convenience. This lets us define an accurate primary trade area.
Once we’ve defined the trade area, it’s time for an Opportunity Gap Analysis. This analysis provides an actionable portrait of sales opportunities, allowing you to maximize your growth strategies. We generate an opportunity gap analysis by using sales potential to depict supply and geography-based estimates of potential annual consumer expenditures to depict demand. Then, we’ll use our expertise and connections to help bring in retailers who can best fill the gaps in your community’s retail landscape. Just contact us today to get started.
If you found this article useful, then you’ll probably also like my books. Click on the titles below to learn more and order a copy.