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The first step to choose a location is understanding where your foot traffic will be. Location scouting, also called “footfall analysis,” is the process of locating and counting people as they pass through an area during a specific time period in order for businesses to understand how lucrative it might be for them. If you’re looking into opening up shop somewhere new and want to find out more about this field, read on!
The “foot traffic tracker” is a tool that helps companies choose the best locations to place their stores. The app uses GPS and other data to measure foot traffic in a given area, then calculates how many people are passing through a certain point each day.
Foot traffic refers to how many prospective consumers walk by, around, or through your present or projected retail site, which may make or break your company. It consists of two components: exterior foot traffic and in-store foot traffic, which may answer a variety of questions regarding pedestrian activity in your region, such as what kind of people visit the area and when and for how long foot traffic is at its peak.
Understanding this information may assist you in selecting the ideal location for your company and providing the finest in-store experience for your clients.
Businesses have long counted customers or evaluated the population of an area as part of their operational strategy, but they frequently lack the high-quality demographic data that is critical when determining where to launch a company. Fortunately, owing to technological advancements, company owners no longer have to make that trade-off.
Demographics & Data Aggregators
A few demographics and statistics tools are listed below that provide foot traffic numbers and frequently much more. Keep in mind that you get what you pay for. While some free tools are a good place to start, you can also spend money on some very detailed data about your target location, customers, and foot traffic.
- Economic Development Departments (government) and Community Development Corporations (nonprofit): Investigate location data at a CDC or ED department in your town or city to make the most of your tax funds. It’s possible that one or both of these resources are available in your area. Property, demographic, and foot traffic statistics for business areas are also available on certain high-tech offices’ websites. All of these services are provided without charge.
- Placer.ai (free): For any current company, event, shopping mall, or casino, this free application provides foot traffic counts and other restricted statistics. Reports with more features may be bought.
- AreaVibes (free): While this attractively designed site does not offer foot traffic counts, it does provide other useful regional lifestyle and demographic statistics, such as neighborhood population, amenities, and walkability.
- LocationOne (free): You may browse available commercial properties as well as get information on anything from foot activity in the near vicinity to category expenditure across a multi-mile radius using the free “Property Search” tool.
- Property Toolkit from Kepler Analytics (price not indicated; contact for a demo): Calculate the amount of pedestrian traffic, analyze traffic patterns across multiple locations and business kinds, and anticipate foot traffic and sales statistics. This information may also be used to renegotiate your rent.
- GravyAnalytics (price not stated; call for a consultation): GravyAnalytics and several of its rivals employ DaaS, or data-as-a-service, which reveals a wealth of information about foot traffic patterns, customer personalities, habits and purchases, visiting frequency, and more.
Data on foot traffic allows company owners to make more educated and smarter placement selections. You can observe how many individuals pass by a spot and get demographic information as well as potential purchase intents.
It’s a numbers game to figure out what balance you’re willing to strike between rent price and traffic count when picking a site. Consider the following scenario for a small-town gift store location:
- Location A: A picturesque and busy crossroads where local attractions attract a large number of people and businesses benefit from each other’s foot traffic. The rent is hefty, but the foot traffic is ideal, with roughly 8,000 people each day (PPD).
- Location B: Just off the main drag, surrounded by offices rather than merchants. Rent is much lower, but foot traffic is just approximately 2,000 PPD.
The issue is how much more money is “worth” spending on Location A as opposed to Location B.
To find out, we’ll calculate how many real sales will be generated by the busier location. After all, if an investment (such as a higher rent for Location A) does not result in sales, it was a waste of money. Let’s use the formula below to forecast prospective sales at Location A:
The outcome is a 360 percent increase in sales for Location A in the gift store. In this case, the greater location is worth paying three times the rent.
The estimate for a guitar repair company is substantially lower: just a 40% increase in revenue (10% x 4) at the better location. Because walk-ins account for such a tiny fraction of total revenue, increased foot traffic has minimal impact on the Conclusion. In this case, the superior location would not be worth paying nearly as much for.
Demographics of Foot Traffic and How to Interpret Them
This is when and when “Quality Over Quantity” becomes relevant. For a store, the amount of foot traffic is always important. Disregarding the demographics, traits, and spending habits of these pedestrians, on the other hand, might be damaging to the business’s long-term viability. The location of your company is heavily influenced by the surrounding area and possible demographics. Here are some questions to start with.
- Who is your target market?
- What is the location of your customer?
Market research and getting to know your consumer are two underappreciated aspects of beginning a company. Your “golden” customer is a thorough representation of your ideal client—the kind of person for whom you founded your company and what they wish to buy from you. The Experian Segmentation Portal, which a company owner may use for free after registering, is a powerful online tool for developing your client identification. Also, be sure to read our post on how to establish a customer profile, which covers everything you need to know and includes a template.
Your firm may have the same amount of foot traffic as Times Square. Your foot traffic count may as well be 0 if they aren’t your consumer and aren’t likely to buy your goods or service in the first place. In addition to investigating and identifying foot traffic counts in your site alternatives, demographics for the target area should be investigated to ensure that your consumer is walking by that spot.
So, let’s go back to our previous example: a gift store on Main Street in the United States. You’ll want to look not only in the neighborhoods and storefronts where your target customers live (married couples with children living in multiple-income households who enjoy purchasing everything from souvenirs, gifts, and cards to premium goods and home decor), but also in the neighborhoods and storefronts where they actually live. Even though Location A has higher foot traffic, consider the potential that Location B is closer to and sees more of your target consumer.
In-store foot traffic monitoring might help you better understand your customers if you already have a shop. Retail analytics in-store may be a strong tool for expanding your brand and prospering in any setting.
Here are a few technologies that small companies may use to track and evaluate customers in their stores. This is only the tip of the iceberg in terms of possible solutions for your requirements as a company owner. Three foot traffic measuring approaches are highlighted in these featured options: DaaS, AI, and POS.
Data-as-a-Service (DaaS) is a service that allows you to access (DaaS)
DaaS, analytics, big data, aggregate data, or location analytics are all terms used to describe this area. Regardless of how you slice it, these solutions give insight into your client by anonymously accessing their phone data to form a collective consumer image. These systems may be wired or wireless. Here are a few platforms to consider:
- Valassis is software that focuses on determining the performance of marketing efforts.
- Dôr: A software/hardware combination that uses thermal technology and machine learning to quantify warm body count while also analyzing aggregate data.
- Blix: This is a cloud-based analytics startup that “looks beyond the door” by “measuring the client journey.”
- RetailNext: This is a rather complete suite of products, which includes Traffic 2.0, a hardware and software solution that measures entry route analytics, visit length, occupancy metrics, and more.
- BlueFox: This cloud-based foot traffic analytics tool records real-time and historical data, such as the number of customers, the length of their stay, and the flow of traffic between multiple retail locations. BlueFox can monitor client trips over the course of a single day in bigger locations like shopping malls.
- SafeGraph is a points of interest (POI) data provider that provides a variety of solutions to help people create foot traffic profiles. Instant downloads and API start at 2 cents per record, with a $100 free data credit offered to new customers who sign up. You may also buy data in bulk for a tailored charge depending on your company’s requirements.
Artificial Intelligence (AI) & Facial Recognition
From sensor-laden floors to body-heat infrared scanners at the entrance, there are a plethora of innovative techniques to track your traffic patterns, length of stay, frequency, and more. Using artificial intelligence (AI) is one intriguing possibility.
- Rhombus: Using AI video software and face recognition, this platform claims to have dominated the people counting business. There’s no mobile data, yet it’s still cutting-edge.
Integrations at the Point of Sale (POS)
Although a POS system is not a foot traffic counter in and of itself, it may be used in conjunction with other foot traffic instruments to provide significant analytics, data, and insights. Each tool is useful on its own, but when used collectively, they provide an arsenal that allows firms to reach genuinely significant conclusions and make strategic decisions.
It’s a good match for Dôr:
- Square: Our top recommendation for the finest POS system is Square, which is also a preferred partner of Dôr with a pre-built interface.
- Shopify: Dôr is also compatible with Shopify POS, which is our preferred multichannel POS system.
- Lightspeed: When it comes to inventory management and analytics, Lightspeed is unrivaled. It is Dôr’s preferred partner and works well with a variety of stores.
- Vend: Vend, which has a collaboration with Dôr, is a great retail POS solution for expanding businesses with complicated inventory.
It’s a good match for RetailNext:
- Lightspeed: Lightspeed is a POS integration leader that works especially well with RetailNext’s traffic counter. Robust POS systems, such as Lightspeed, can handle your inventory, payment choices in-store and online, ecommerce shop, customer relationship management (CRM), and more all in one place.
Using some of the aforementioned tools to create high-quality foot traffic and analytic data may lead to a slew of fresh insights and strategies. Foot traffic data may be used by the astute entrepreneur to transform their company operations. Continue reading to discover more about how foot traffic data might help you update your company strategy.
Check if the product mix is valid or not.
A novelty business in South Carolina is looking to expand its offerings. Mugs, artwork, women’s accessories and jewelry, linens, presents, candles, puzzles, and other items are now available. It chooses to stock a section of the shop with baby items, such as knit hats, blankets, toys, mobiles, baby books, and bibs. It discovers that traffic flow does not include the infant corner using its preferred foot traffic assessment platform. When the business owner considers its POS and purchase patterns, he realizes that clients aren’t interested in baby presents after all, and he chooses to stop spending money on baby merchandise and try something else instead.
Determine or Reevaluate Staffing & Hours of Operation
To compete with big-box mattress sellers, a mattress store on the West Coast is open every day from 10 a.m. to 8 p.m. It staffs the floor according to the square footage staffing calculation of 2.5 workers per 1,000 square feet of retail area, so there are always around five people on the floor. Sundays had essentially no sales, until about 1 p.m. or 2 p.m., according to traffic patterns. It shifts its Sunday hours from 12 to 6 p.m., saving almost $500 in overhead, electricity, and payroll expenditures every Sunday.
Expansion & Growth Decisions
Every autumn, 20,000 students descend on a thriving bookstore/coffee shop in Ohio, which has a college town feel. While the shop’s modest, intimate size lends itself to exclusivity and strong demand, traffic counts and flow patterns reveal that the shop lacks enough seating in relation to foot traffic. It eventually expands to the rear of the building and up two storeys to accommodate a crowded house at its local favorite hot spot. This also frees up room for late-night Poetry Slams and Open Mic evenings, extending the restaurant’s hours, extending customer visits, and bringing in guests for more than 12 hours each day.
Optimize Your Store Layout & Displays
The items of a children’s toy shop are sold online. Board games and puzzles are in the same product category and sell at comparable rates. It launched its first physical store in Oregon and saw a big difference in sales between the two. Board games outnumbered puzzles in the shop. The visual merchandising approaches were discovered to be distinct after further study. Puzzles were simply set on a table where few people went by, whereas board games were prominently displayed with a display near a lot of foot activity. With this knowledge, it rearranged the shop and made design adjustments to boost puzzle sales and bring them up to line with board games.
Conclusion
One of the most common mistakes made by small company entrepreneurs is failing to undertake sufficient market research up front. How can you start, run, and grow a successful company if you don’t know what you’re getting yourself into in terms of industry, competition, and demand?
As previously said, assessing foot traffic allows you to assess demand, accessibility, and visibility of a company site. It’s a particularly valuable indicator for retail establishments, which often expect to attract visitors, casual shoppers, and passers-by. These kind of important judgments and data collecting might lead to the favorable selection of Location A over Location B when testing a company concept.
Foot traffic data (combined with POS systems) is a major game-changing tool once your business is up and running. This data helps businesses make informed choices about inventory, shop layout, marketing campaign ROI, target market, buying habits, visiting trends, and seasonality.
If you’re going to use foot traffic measurement, keep your skeptic’s hat on. The aim is to get the essential understanding to service your customers each and every time they walk through your doors.
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Foot traffic measurement is an important part of the process of finding a location to open a business. It’s not just about how many people are coming into your store, but also about where they’re coming from. Reference: foot traffic measurement.
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