Month: June 2021

STI: LandScape™ Correlates with REI Customers

Today, Curt relies on both PopStats and LandScape to scout new territories for new stores and assess the status of existing stores. “Our process begins with segmenting our target markets using LandScape, so we can create our forecast models. It’s our critical first step because REI’s customer profiles are extremely segmented in comparison to most other retailers.”

“LandScape segments do an incredible job of correlating to our ideal customer segments,” said Curt. “In fact, the 72 segments’ correlations are so meaningful to REI that the company will ignore a lower population count in a market if it finds a large enough population of its ideal segments.

“LandScape allows us to perform a unique calculation to understand a market with different demographic qualities,” notes Curt. “That’s why it’s become one of the key building blocks in our models when we are researching trade areas where we don’t already have stores.”

Before applying LandScape data to its research, REI processed a year’s worth of transactional data — about one million records — including every sale and every return. It geo-tagged each data point. That showed them where members live, where members shop, and what they buy.

By mapping that data against the retailer’s dominant cluster data, REI was able to assign a score for all 72 segments in LandScape on the segments’ propensity to shop at REI. That allows the company to, simply stated, assign a score to any geographic area and gauge how likely REI is to be successful there. “It’s just as important to know all the segments that score low as to know all of the segments that score high.”

About 15 segments in LandScape deliver the highest probability of being REI customers. However, Curt stresses: “That doesn’t mean that we’ll only put stores where those consumers live. There are many other factors that we consider as well.”

Among the other factors, we are looking at alternative sites where there is no residential customer base. Instead, it’s a place that people travel to for outdoor recreation, like Conway, New Hampshire, and Dylan, Colorado. “Since we’re running out of standard places to open new stores, we’re expanding our search into alternative store locations and types,” explained Curt.

Applying Art and Sciene to Trade Area Analysis

After forecasting its customer segments, Curt moves onto trade area analysis, relying on PopStats to compile relevant data on each trade area’s demographic characteristics. “The purpose of this analysis is to determine if a strategically validated relationship exists between the site’s attributes and our ideal store performance.”

REI’s site analysis includes three typical scenarios:

1. Model Validation – In a normal trade area, “we track the prediction using variables such as trade area capture rates, sales per population, and total sales per household.”
2. Increase Forecast – Some markets need a manual boost in estimates for a variety of reasons, such as Burlington, Vermont. “Not surprisingly, REI’s capture rate is very high there,” noted Newsome. “Almost everyone is a potential customer. Plus, we get a bump from the local university.”
3. Decrease Forecast – If a market looks different demographically or has a lower population, Newsome will manually lower the forecast. “For example, in Salem, Oregon we decided to open a smaller store. Today, it’s a good steady performer.”

So how accurate is REI’s new market analysis processes? “We haven’t measured the raw model yet, but we’ve opened about 30 new stores using this methodology. We’ve only under predicted by about three percent of the time, which is great compared to the industry standard of 15 percent.”

Interestingly, in REI’s over 80-year history the company has rarely closed a store. But in 2015 the company closed its first one and has relocated a couple of stores since then. Newsome is so confident with his current research process that he says: “If we had the model we have now when he opened that now-closed store, we never would have opened it in the first place.”

Backed by trade area research it can trust, REI plans to continue opening new stores at a pace of anywhere from two to 12 per year.

Want to accurately predict your store openings like REI? Contact us for a free sample!

Get a free sample REI’s Website

Supporting Sales with Data Options

As a real estate investment trust (REIT), Brixmor owns and operates a high-quality, national portfolio of open-air shopping centers. Its 400-plus retail centers comprise approximately 73 million square feet of prime retail space in established trade areas.

The company strives to own and operate shopping centers that reflect Brixmor’s vision “to be the center of the communities we serve.” Those communities are home to a diverse mix of national, regional, and local retailers — including The TJX Companies, The Kroger Co., Publix Super Markets, Wal-Mart, Ross Stores, and L.A. Fitness.

Before the new research department could prove its overall success, it educated the company’s team members in a series of education sessions on how to use and maximize the impact of the new market research tools. In addition to the leasing team of 65-plus agents located in NYC and 10 regional offices, other internal clients included Brixmor’s acquisition and disposition team.

Market Outlook: A Popular Dataset

“Among all of the data variables we now offer our agents in the PopStat suite, Market Outlook’s gap analysis has proven to be many agents’ favorite data,” noted David. “With this data, they can show prospective tenants what the market potential is and what the gaps are in consumer spending in those areas.”

Retailers can leverage the Market Outlook insight to rent space in one of the company’s properties and begin meeting the existing consumer demand with their products and services.

“When our agents share insights beyond population counts and other demographic data, such as the gap between consumer demand and spending in everything from home furnishings to apparel to groceries, it makes a huge impression,” explains David. “Needless to say, Market Outlook has been a big hit in our company.”

Spending Patterns is a Huge Asset

Spending Patterns has also been a huge asset to the real estate leasing processing, added David. “Even if the population count is on the low end and we can’t show the potential client a huge supply and demand gap, we may be able to show them that consumers are still spending a lot in a particular sector. That kind of data makes a great story as well.

“Our access to such a robust variety of datasets gives us a wide range of data to pull from when our agents are in the midst of real estate negotiations,” notes David. “There may be more than one way to demonstrate the potential value of a single property, and we want to be able to give them all of the tools in the toolbox.”

Brixmor’s addition of market research to its internal operations is paying off and helping the firm meet its mission: To be the center of its communities by matching vibrant retail to local culture and needs. Market research is helping the company meet and exceed its business goals.

Want to utilize our different datasets to optimize your investment? Contact us for free samples1

Get a Free Sample Visit Brixmor’s Website

Saving Research Costs

“Our confidence in PopStats’ numbers is so high that we greatly reduced the number of housing studies we conducted in growth markets,” explains Kretsinger.

Typically, the real estate development company surveyed homebuilders that were building new subdivisions in new markets. The price tag for these in-field services was anywhere from $4,000 to $8,000, depending on if Weingarten conducted the research itself or used a third-party research firm. They were a significant expense, with up to 20 housing studies a year conducted when the company was focused on new developments.

“Even if we conducted the research ourselves, there are many costs, including airfare, hotels, meals, and time out of the office,” notes Kyle.

“After we started using PopStats we were able to replace most housing studies with PopStats’ quarterly growth trends — that’s how certain we are of the data’s ability to see populations in markets as they are growing.”

“PopStats has the unique ability to give us a very high comfort level without needing to spend the money to feel comfortable with our decisions,” adds Kyle.

Gaining Workplace and Seasonal Insight

Along with saving on housing studies, Kyle says that PopStats data has also saved the company the expense of conducting workplace studies. “We used to go into new markets and count how many businesses were there. Then apply a formula to determine how many people worked in the area. The number is important to our clients who rely on a certain percentage of daytime population for their business operations.

“Now, PopStats provides us with accurate workplace population counts — which we also have the utmost confidence in. This is another great convenience and savings.”

With several shopping centers located in the Southern part of the U.S., seasonal population trends are also a valuable form of demographic insight for Weingarten, notes Kyle. “PopStats is the only data that allows us to track seasonal trends. With its quarterly population updates, we are able to clearly see the seasonal fluctuations in our markets. We can share this insight with our tenants, so they can make more informed business decisions as well.”

Speaking the Same Language

With the high-growth boom on hold for the time being, Weingarten is focused on managing the property it currently owns. This includes marketing its existing space to retailers. “PopStats data comes in handy for marketing our properties,” notes Kyle. “We can show potential clients what population exists and what changes are expected. All companies do a better job when they understand the dynamics of a trade area’s population.”

Kyle notes that many of Weingarten’s larger retail clients like grocers and restaurants already use PopStats data in their own market research activities. “This is great because we are all speaking the same language when discussing population counts and characteristics.”

To gain utmost confidence in your market research like Weingarten, contact Synergos Technologies today about the STI: PopStats data suite today.

Get a Free Sample Visit Weingarten’s Website

Population: 2,063,682

2021 Average Home Value:  $248,578
2020 Average Home Value:  $238,003

Average Household Income: $82,607

San Antonio is the major city for Bexar County and sits at number 10 on our list for home values. The counties that are listed higher are counties of the 3 other major cities of Texas, and the counties that make up their suburbs. San Antonio just so happens to also rank number 10 in Texas counties for average household income.

9. Harris County (Primarily Houston)