Site selection is a complex but essential process for retailers, manufacturers, healthcare providers, and enterprises. The right locations empower your business to grow and thrive. The wrong ones can have devastating consequences.
The stakes are too high to rely on intuition alone. And when every poor decision comes with a multimillion-dollar price tag, most businesses can’t afford to learn through trial and error.
That’s where site selection services come in. Site selection services can give businesses the tools and/or expertise to make informed, reliable decisions about which locations to open, close, relocate, consolidate, or renew. These services can encompass processes like market planning, site modeling, sales forecasting, and lease negotiations.
Depending on the type of service you need, these tools or agencies may help guide you through the entire site selection process, equip you with the analytical capabilities or information you need, and/or work on your behalf to secure the specific sites and lease incentives that matter most to your business.
Often, site selection services cater to specific industries and business types based on their past clientele and experience. Their processes, algorithms, and models may, for example, prioritize factors that have proven to be most effective for a manufacturing plant—which isn’t as helpful if your business is a grocery store.
Some services, however, are more configurable, making them suitable for a wider variety of businesses. You’ll want to look for services that either have experience with businesses like yours or can easily craft and customize their services to suit your industry.
Site selection services generally fall under three main categories: software, consultants, and negotiators.
Here’s what they each entail, and how to decide which type of support you need.
Site selection software can specialize in market planning, site modeling, or both. Many solutions are optimized for specific methodologies, like void analysis or white space analysis. Generally, these tools overlay datasets on an interactive geographic information system (GIS), but some of the more advanced solutions combine these capabilities with robust predictive analytics, using algorithms to predict performance. You put your business on the map, visually filter and analyze markets, then forecast potential outcomes based on your current stores.
The advantage of leveraging software is that data guides your decisions—ideally, with a projected outcome you can understand and articulate. Some businesses lean entirely on their software’s site models, but many use it as one of several components of their location strategy.
Tango’s site selection software, Predictive Analytics, uses machine learning to layer a combination of predictive algorithms on top of each other until it finds the model that best fits your stores. The result is the lowest margin of error on the market, and our team of experts works right alongside yours to explain how the model works and how it produces each forecast. We never settle for results we can’t explain—and you shouldn’t either.
The vendor you select will affect the processes you can use to research markets, the types of data available to you, how much explanation you receive with forecasts, the margin of error, cost, ease of recalibrating or refitting the model, and more.
Software is the right solution for your business if you have a dedicated employee or team that plans and prioritizes real estate moves. It ensures you have a repeatable, demonstrable process at the foundation of your decisions, and the ability to validate hunches or intuition. The key is to vet vendors thoroughly and choose a solution that:
- Produces accurate results you can trust
- Gives you the context you need to explain those results
Experience can save you a lot of headaches and mistakes. Partnering with consultants enables your business to make decisions based on what’s worked in the past, whether you’ve been conducting market research and site selection for years or you’ve never done it before. These services can support your organization at specific stages of the process or take you from start to finish. Consultants may have proprietary tools or processes for guiding your decisions, or they may use a combination of their expertise and the site selection software they’re most familiar with.
When working with consultant services, it’s especially important to find a partner that’s familiar with your industry and understands your business. Experience is the greatest asset consultants bring to the table, so you want to be confident that it’s as transferable as possible to your organization.
While site selection consultants can fill in any gap in your process, they’re most beneficial to businesses that either don’t have dedicated personnel for site selection, or lack experience in critical areas.
Ideally, your site selection software vendors should feel like consultants. Given what’s at stake, you should expect a high level of involvement and communication with veteran market planning and site selection professionals. At the same time, you should also be wary of consultants who don’t incorporate site selection software into their process. If you’re paying someone to lead you to the best real estate decisions, you want those decisions to be explained by data, not just instincts.
Finding the right store locations is more than half the battle, but you still have to actually acquire the sites you prioritize. In many businesses, the person or team that handles acquisitions isn’t the same as whoever identifies and selects sites. It’s a different process that requires a different skill set.
Negotiators focus on a very specific aspect of site acquisition—they help ensure that you get the most favorable terms you can. Lease negotiations can be highly complex, requiring you to understand where you have leverage, which terms are must-have, and which terms you can afford to give up in a compromise.
Some businesses have skilled negotiators who can analyze their lease portfolio and competently advocate for the organization’s needs. Others don’t. Whether you use a third party or handle negotiations in-house, this is another area where relevant experience makes all the difference. External consultants can be immensely valuable, but ultimately, your business’s unique real estate footprint and history with other landlords will be critical components of negotiations.
Tango Predictive Analytics is the market planning and site selection software with the lowest margin of error. Our experts work with you to build a model that fits your business, using machine learning to find the right combination of up to 100 different algorithms to accurately forecast sales and predict outcomes.
We also offer all our customers a free Portfolio Review service, where we help analyze anomalies, make recommendations, and further refine your models based on actual results.
Want to see what Tango Predictive Analytics can do for your business?
Request a demo today.