How to decide where to open a store?
Knowing the number of people that pass in front of your store every day is a very precious information: quantifying the number of pedestrians who walk in front of your shop allows you to make a real estimate of profitability of your business.
If you are thinking of opening a point of sales, it is essential to have certain information, such as the minimum number of people walking or passing through the area, to understand if the project will be profitable.
- How to choose the perfect location for a store?
This is one of the main problems when it comes to deciding where to open a new store: the position, in fact, is one of the most important factors to be successful.
The best place to start a business will be, logically, one where many people walk through. The online world is not like the physical world: it’s not possible to segment customers in the same way. In fact, the more people will pass in front of your store, the more possibilities there will be to convert them into buying customers.
If we decide to open the shop in a very busy area, then there will be more chances that these people enter, which, in the end, results in an increase in sales. On the contrary, opening just 5 minutes from a very busy road means not existing.
Many times retailers decide to open stores in places with low rents, but the problem is that, in general, the shops with the lowest rents are the ones that sell the least.
The rents in the streets, usually, have a price per square meter that sometimes doubles or triples the rent of secondary roads.
But it is precisely here that the CCP or cost per potential customer comes into play.
Cost per Potential Customer
The cost per potential customer in retail allows us to measure what is the cost we pay for every person passing in front of our shop windows. It is calculated by measuring the cost of rent per square meter and dividing it by the number of people passing in front of the store.
It can be useful for:
- A retailer who wants to open a new store, as he can do a study of different locations based on pedestrian traffic and the CCP.
- Retailers who wants to know if the price they pays for rent is linked to the number of people passing in front of his store (because he is perhaps paying a cost per potential customer much higher than he should be).
- Do stores change value based on the geographical location they occupy?
The streets do not all have the same influx of people: imagine that in one there is a metro station or a very busy train station. Let’s say that we decided to position our store on this road because we know that it has a large amount of pedestrian traffic.
The same happens with shopping centers: it is impossible that there is the same number of people on every floor or in every corridor of the mall.
Moreover, when we talk about physical stores, having competitors’ shops nearby is not necessarily a bad thing: on the one hand, big brands tend to attract pedestrian traffic in a natural way, and on the other hand the concentration of stores is usually an incentive to attract more people that can shop in different places without having to travel a lot. This will increase the amount of people passing in front of your store.
Counting people technologies and sensors
The number of people passing in front of your stores is the main indicator of the relevance for your business. Knowing pedestrian traffic allows you to get a real insight into the attractiveness of your business, and then make conscious based decisions.
Fortunately, there are tools like TC Street, with over 20,000 sensors installed all over the world, thanks to which you can get accurate data on pedestrian traffic for hourly fringes and for the roads that interest you most.