Considering recent economic downturns and fluctuating market conditions, it is now more important than ever for municipalities to plan proactively for successful commercial growth and retail development. This enables them to mitigate economic volatility and ensure sustained growth.
Since retail is such a fast-paced sector, having the right geographic information systems (GIS) tool to study the local market, demographic information, trade areas, competitors, and more, is vital for identifying the trends and opportunities that attract and retain top retail brands.
AlphaMap is proud to partner with premier commercial development advisory firm, NextSite, to bring advanced data analytics to local governments.
In this guide, we’ll unpack four fundamental ways the AlphaMap platform helps towns and cities navigate the complexities of retail development planning. If you’re an economic developer, chamber of commerce executive, city manager, or someone who’s involved in supporting retail development in your town, this guide is for you.
The Importance of Retail Development for Municipalities
Retail development is a key part of a commercial growth strategy for local governments. Beyond bringing in new business and providing a steady income for the municipality, retail development builds and supports local businesses, contributing to the sustainability of the community.
Retail businesses contribute revenue in the form of sales taxes, property taxes, and business licensing fees. An increase in retail activity correlates to a bigger budget which can be used for public services and infrastructure improvements such as better roads and public transport.
A boost in retail development creates employment opportunities for the local population – anything from entry-level positions to managerial roles. When people earn more money, they spend more money, leading to a healthy local economy.
Retail establishments can significantly contribute to the vibrancy and cohesiveness of community spaces, attracting both residents and tourists. These businesses often become local meeting points, where people gather and engage, or host events, strengthening community ties.
The Role of GIS in Retail Development Planning
Previously, municipalities tended to rely on external consultants to assist with identifying and recruiting retail for commercial development. Costs for this service could be in the multiple six figures every year, and the results were never guaranteed.
GIS platforms, such as AlphaMap, allow municipalities to take on the responsibility themselves, not simply to save costs, but to have more control over their retail market analysis.
Having direct control allows local governments to create more extensive and in-depth data analyses, resulting in quicker responses to changing market conditions and more effective strategic planning.
Here are some of the typical tasks that municipalities might undertake using GIS:
- Studying demographic data to understand local population needs
- Using void analysis to identify and fill retail market gaps
- Doing trade area analyses to identify opportunities
- Determining the best locations for retail developments
- Comparing retail development successes with similar municipalities
4 Ways AlphaMap Makes Retail Development Planning Easy
1. Growing Commercial Development
Expansion of the retail and business landscape within a community is an excellent way to stimulate economic growth and improve the local area.
Municipalities need to be strategic with their planning, carefully choosing to invest public funds in areas with the highest potential for success. The goal is to ensure the best returns on investment for retail development projects.
Some of the activities you can accomplish with AlphaMap include:
Site Selection and Analysis
Study area demographics, foot traffic, car traffic patterns, and identify local market trends. This will identify which locations are most ripe for development.
Market Void Analysis
Uncover gaps in the existing retail market in the area. Filling these gaps will create a more cohesive retail environment, better meeting the community’s needs.
Peer Analysis
Municipalities find it helpful to compare themselves to other communities of similar types and sizes, and with similar challenges. Successful retail strategies implemented elsewhere provide valuable learnings that can be adapted.
2. Supporting Existing Businesses
It’s important for local governments to support already existing businesses in a community, as well as focusing energy on bringing in new ones. This two-pronged approach is pivotal to economic sustainability. Chambers of commerce, for example, act as supporters and advocates for local businesses.
Some ways you might use AlphaMap include:
Performance Metrics
AlphaMap’s rank feature allows you to compare the performance of different retail brands in different locations against stores of the same brand, or competitors.
Performance is measured in terms of foot traffic data aggregated from 100 million mobile devices across the country and turned into a percentile ranking on a national, state, and city level.
Consumer Insights
You can use AlphaMap to determine trade areas based on drive time and distance, as well as ‘true trade’ using mobility data. Municipalities often want to know where customers went prior to and post certain store visits, and AlphaMap provides this as cross-visitation statistics.
Studying the true trade area is helpful to determine your customer demographics. Retail offerings can be tailored to serve the direct needs of the existing community.
Infrastructure Improvements
Location analysis highlights site accessibility and available infrastructure. Municipalities can use AlphaMap to uncover infrastructure needs, such as a deficit in public transport routes or accessible roads. Strategic investment in infrastructure upgrades can stimulate retail development when planned properly.
Example Scenario
An existing retailer in a small town wants to expand but is unsure where to locate an additional store. NextSite uses AlphaMap to analyze customer demographics and existing traffic patterns. Based on these, they recommend the business relocate to larger premises in a new location that promises high foot traffic and minimal competition.
3. Analyzing Visits to Tourist Spots
Tourists can bring a flood of foot traffic into a town or city. It’s an activity with many socio-economic knock-on effects. Understanding who tourists are and where they are from is important. Even better, knowing exactly which places they have visited, and when, gives clues as to why they are visiting. With this information in hand, local governments can bolster tourist hotspots and support the local economy.
Accessing this information using AlphaMap is straightforward. Here are some ways you might use the tool:
Visitor Demographics
AlphaMap analyzes visitor demographics to provide insights into where tourists come from, their age, income, and other main characteristics.
Really getting to know the people who visit your town or city is helpful for knowing where to implement targeted improvements and services that cater to your visitor profile.
Tourism Patterns
AlphaMap can help you understand tourist behavioral patterns through cross-visitation foot traffic statistics.
Identify popular routes and attractions that indicate where the most economic impact will be achieved from investment.
Economic Impact
Understanding how tourism impacts local businesses, and the economy, can help public sector clients develop strategies to enhance tourism and support related industries.
Example Scenario
A city known for its natural history would like to increase tourism to a specific historical site.
NextSite uses AlphaMap to analyze existing visitor demographics and patterns, identifying that a large portion of visitors are families.
The city decides to invest in creating some family-friendly amenities at the historical site. They build a playground, and a restaurant that caters to children. They also include some retail which serves children as well as adults. Further away, a family-friendly museum is built at the site with lots of fun, interactive activities for children. As a result of these targeted improvements, the site experiences a surge of visitors and becomes well known for this specific attraction.
4. Targeting Retail Concepts
Successful retail development involves more than attracting top-tier retailers. It’s essential to devise retail concepts that fit with the community’s needs and desires. A complementary and thriving retail tenant mix doesn’t have to rely on guesswork. A thorough, data-backed approach yields far superior results and greater chances of success for all stakeholders.
Here are some ways you can use AlphaMap to refine your retail strategy:
Retail Matchmaking
AlphaMap’s TenantFinder™ feature uses advanced algorithms to match the best-fit retail brands with the local community’s demographic profile and behavior.
This feature also identifies gaps in the market where new retailers can be brought in to ensure a more comprehensive commercial offering. By aligning retail concepts with the specific demands and preferences of the community, TenantFinder increases the likelihood of success for both retailers and the municipality.
Competitive Analysis
You can use AlphaMap to study existing retailer distribution in your area, identifying areas with high competition as well as those that are underserved and prime for new investment opportunities. With the ability to create maps of the competitor landscape based on foot traffic rankings, municipalities and developers can make informed decisions about store locations.
These studies provide interested developers and retail brands with a clear understanding of market conditions, helping them choose their store locations wisely.
Custom Reports
Custom reports created with AlphaMap allow you to communicate complex concepts in a visual manner, getting your point across more clearly.
These reports can be shared with prospective retailers and developers to help them easily evaluate the market potential in your area. Showing in-depth data about consumer demographics, spending patterns, and existing opportunities makes it easy to get their buy in.
Example Scenario
A city wants to attract a specific retail chain to a developing commercial area. NextSite uses AlphaMap to analyze the local market conditions and identify some optimal locations for the brand. Using detailed foot traffic statistics, they present a compelling report that illustrates significant economic benefits to the retail chain.
This data-driven approach ensures that the retailer sees the tangible benefits of entering the market, significantly increasing the likelihood of their commitment.
Final Thoughts on the Importance of Retail Development for Municipalities
The impact of retail development not only generates revenue for a municipality but also nurtures local businesses and supports employment. Combined with NextSite’s strategic guidance, AlphaMap has become indispensable for towns and cities in boosting successful commercial growth and development through advanced data analytics.
From strategically growing commercial development to supporting existing businesses, analyzing visits to tourist spots, and targeting retail concepts to ensure economic sustainability and success, AlphaMap supports many primary functions of local governments in the quest to create thriving communities.
It is likely that in the future, municipal retail development will rely more and more on innovative, data-driven approaches to enhance growth, resilience, and community engagement.
Why not get in touch with the NextSite or AlphaMap team to learn how you can leverage these tools in your town or city today?
Key Features of AlphaMap for Municipalities
- Rank Reports
- Mapping Features
- True trade area analysis (using mobility data)
- TenantFinder™
- Custom Reports
