Many retail businesses are forced to shut down every year due to mistakes made in choosing their location. In 2018, approximately 400 outlets were closed, as noted by Katadata. A non-strategic location, in addition to an unprofitable market, was a contributing factor to these closures. To find a suitable location, businesses can opt for site selection. So, what is site selection? And what are its benefits for businesses? Find the complete explanation in this article.
What is Site Selection?
Site selection is the process of identifying, evaluating, and choosing the most suitable business location. Businesses must take into account several factors, such as competition, market dynamics, infrastructure, accessibility, and regulatory requirements in the area when deciding on a location.
The main goal of site selection is to identify and find a place that can help the business achieve maximum success according to its needs and goals.
When choosing a location, businesses conduct a thorough assessment to understand the opportunities and risks associated with that location.
The Importance of Site Selection for Business Growth
Choosing an optimal location is crucial as it can impact various aspects such as business visibility, accessibility, customer numbers, operational efficiency, and profits. Evaluating logistics issues and market characteristics in the chosen location helps businesses expand their customer base and potential profits.
Moreover, data on the number of people passing through an area (foot traffic) can help businesses find new locations for their shops, franchises who want to open their next outlet, or property companies looking for space for future projects.
When choosing a business location, businesses also need to consider location data, because this data can provide insights regarding population density, demographic characteristics, office location, and consumer background.
Choosing a location without conducting a thorough analysis can lead to an increased risk of selecting an inappropriate location. For example, a business may choose a location with a declining population or a population that does not match the business’s target consumers if an in-depth analysis is not carried out.
Benefits of Site Selection for Business
Businesses can use site selection analysis to identify strategic locations offering easy access, frequent visitor traffic, and proximity to important places like office districts and residential areas. A strategic location is one that is well-positioned to attract many people and is conveniently located to important destinations.
Here are the benefits of site selection that businesses can experience:
Targeting the right market
Site selection helps businesses identify areas dominated by their target consumers, thus strengthening the customer base and increasing sales potential.
Businesses conduct site selection analysis to gather information regarding the population demographics, consumer habits, income in the area, market trends, socio-economic status, and more. This data plays a crucial role in helping businesses determine the most suitable location to reach their desired consumers.
Market competition analysis
In order to expand or open a new outlet, companies must conduct a thorough analysis of the competition in the area. This is achieved through the process of site selection.Â
By gaining an understanding of the current market conditions, businesses can select a location that will yield the highest profits, such as a market niche with minimal competition or a strategic position. The identification process involves examining market share, pricing, customer reviews, and the strengths and weaknesses of competitors.
Choosing accessible locations
When expanding a location, it is essential to take into account its accessibility as it can facilitate customers, suppliers, or employees in reaching that area. Opting for a location in proximity to public transportation, major roads, and with adequate parking facilities can enhance the comfort level of everyone, boost the number of visitors, and streamline business operations.
Find the Best Location with Site Selection Analysis from LOKASI Intelligence
Thorough and meticulous examination, strategic planning, and consideration of various factors are necessary when choosing a business location. The right location can help businesses achieve maximum profits, expand their reach, streamline operations, and enhance profitability.
To analyze location selection, businesses can employ LOKASI Intelligence, a geospatial platform that facilitates the identification of the optimal location for establishing a business. LOKASI also provides additional data, such as demographics, socio-economic status, population density, and mobile data, to enrich its analysis.
Learn more about how LOKASI Intelligence can help businesses by contacting via email: [email protected] or WhatsApp: 087779077750.
FAQ
What is meant by Site Selection?
Site selection is the process of identifying, evaluating, and choosing the most suitable business location.
Why site selection?
Choosing an optimal location is crucial as it can impact various aspects such as business visibility, accessibility, customer numbers, operational efficiency, and profits. Evaluating logistics issues and market characteristics in the chosen location helps businesses expand their customer base and potential profits.
Can you give me an example of a site selection?
When a food and beverage company plans to expand its business by opening a new store in a different area, it needs to choose a suitable location. To achieve this, the company considers various factors before constructing the outlet. Once the company identifies the appropriate area, it establishes a new branch in that location.
