Next week is a retailer’s dream: Black Friday, Cyber Monday and Small Business Saturday are finally here. As we approach the biggest retail season of the year, we can’t help but think about how data can help to optimize retail sales, both for in person brick and mortar, and online sales. We can break these into two categories: demand data, and supply data.
Before we can get to what people spend their money on, we need to identify who are the buyers. If you are a brick and mortar retailer, knowing the basics of who lives in the area that your retail location is in will be key. You need to know the basic demographics, segmentation, and account for any tourism to your area. Our mainstay database, Estimates and Projections, will give you the basic demographic data of who is in your area. Panorama, our segmentation system, will enhance your customer analysis. Our new Non-Resident Population data will give you estimates of tourism in any given season.
Once you know who your potential clients are, you need to know what they want to buy. The Consumer Expenditure database consists of a multi-level hierarchical classification of household expenditures, which covers most annual household expenditures. It is derived from an extensive modeling effort using the latest available data from the Bureau of Labor Statistics. The database consists of a total of 396 base variables, which are aggregated in up to four levels of detail. A hierarchical structure is utilized throughout, so that it is possible to aggregate or disaggregate categories as required for analysis. Some of the major categories represented in this database are total expenditure, household furnishings and equipment, apparel, personal care, gifts, and more. If instead you want to break down by store type, the Retail Potential database consists of average household and total market potential estimates by each of sixty-four retail store types.
Knowing the demand is key to good sales and growth. If there are already multiple men’s apparel shops in one area, opening another probably won’t bring success. Looking at the “retail landscape” of any given area will give you the tools needed to make an informed decision. You may find that instead of a saturated market, there are geographic areas in need of retail locations. We have covered retail gap in a few articles, including one on “food deserts” and this week’s article on RV dealerships. The Retail Gap database can be useful in highlighting areas where there will be lots of competition, and areas where there is demand but a lack of local retailers.