downtown and business district market analysis
TRANSCRIPT
Josh Clements, Iowa State University-Extension
Jenny Garner, University of Illinois-Extension
Bill Ryan, University of Wisconsin-Extension
The Market Analysis Process
Funding - North Central Regional Center for Rural Development (NCRCRD) Seed Grant
Presented at the
Community Development Society Annual Meeting
July 20-23, 2014, Dubuque, IA
Outline of the Process
I. Understanding the Market
II. Analysis of Opportunities by Sector
III. Putting Your Research to Work
Purpose of a Market Analysis
1. To support business development
with reliable data that accurately
describes the market.
2. To research issues specific to your
particular community.
3. To provide a foundation for
developing economic development
strategies for a business district.
I. Understanding the Market
Trade Area Analysis
Factors to Consider:
• Population
• Proximity of competing
centers
• Local mix of businesses
• Local destination attractions
• Traffic patterns
Tools to Use:
• Focus groups
• Mapping using geographic
features (distances,
highways, drive-times, etc.)
• Mapping using customer
addresses and zip codes
A trade area is the geographic area from which a community
generates the majority of its customers. A community may
have both a convenience and a destination trade area.
What is the Best Method for Defining a Trade Area?
Answer on Your Clicker
A. A 15-mile Ring – its simple and site selectors use it
B. Zip Code Area – covers the local mail delivery area
C. County Boundaries – economic data is readily available
D. Customer Origin Data –where people are actually from
E. Combination of these and other methods
I. Understanding the Market
Demographic & Lifestyle Analysis
Demographic Data:
• Population and households
• Housing ownership and value
• Income
• Age, gender and ethnicity
• Educational attainment
• Employment
Lifestyle Data:
• Households in a trade area
are segmented into unique
clusters that describe their
lifestyle, characteristics
• Examine spending propensity
for a variety of goods and
services
Demographic and Lifestyle data can provide insight into local
consumer buying behaviors and preferences. Comparison are
made to state and national averages.
What group do downtown urban amenities appeal to?
Answer on Your Clicker
A. Baby Boomers (born 1946-1964)
B. Generation X (born 1961-1984)
C. Millennials (born 1977-2003)
D. Generation Z (born 1996 to present)
Source: PUMA 2014 Global Trends
I. Understanding the Market
Local and Regional Economic Analysis
• Industry Concentrations and Employers
• Labor Force and Employment Levels
• Entrepreneurial Activity
• Business Climate Analysis
• Real Estate Activity
• Transportation Patterns
• Institutions
• Tourism and Community Attractions
• Quality of Life Measures
Economic data can help describe downtown’s position in the local and regional economy and identify factors that are of competitive advantage.
I. Understanding the Market
Business Owners Survey
Purpose of Questions:
• provides information on
business needs to support
retention and expansion
efforts.
• Allows business community
to share ideas for new
economic activity in the
community.
Possible Methods to Use:
• Written Survey
• Telephone Survey
• Web-Based Survey
• Business Visitations
• Focus Groups
A business owner survey invites business owners to share their
perspectives regarding the current and future economic health
of the business district.
Provides Information on:
• Who they are and how to
reach them.
• Where, when and why they
shop for various goods and
services
• How downtown can be
improved in terms of retail as
well as other uses.
Possible Methods to Use:
• Written Survey
• Telephone Survey
• Web-Based Survey
• Social Media
• Intercept Surveys
• Focus Groups
A survey can help you understand the attitudes and shopping
behaviors and preferences of current and potential consumers
specific to your trade area.
I. Understanding the Market
Consumer Survey
Surveys – Download Examples and Templates
Toolbox includes:
• Question-bank to help you
determine what questions are
most relevant to your analysis
• Downloadable survey templates
that can be customized for your
community.
• Examples of surveys that have
been customized and
implemented in various cites.
Structure of Sessions:
• 7-10 people with common characteristics (perhaps same
market segment)
• Minimum of three groups
• Conducted by a trained facilitator
• Non-threatening environment
• Used to understand human behavior
• Not used to collect facts
A carefully planned discussion to collect qualitative data about
feelings and perceptions regarding the downtown area.
I. Understanding the Market
Focus Groups
What is an Important Benefit of Conducting Focus Groups?
Answer on Your Clicker
A. Allows interactive exploration of an idea or issue.
B. Doesn’t require skilled moderators.
C. Can generalize to the population.
D. Easy to analyze or assess consensus.
Identifying Comparable
Places:
• Similar in Demographics
• Similar in Location
• Similar in Urban and Rural
Characteristics
• Similar Function
Identifying Successful
Districts:
• Knowledge from existing
study group members
• Recognized downtown
successes
• Research websites of
downtown or Main Street
organizations
Examining Similar Cities and their Business Districts is useful in
identifying potential business opportunities and economic
development strategies.
I. Understanding the Market
Peer City Comparisons
Includes tools for estimating demand and supply for selected
business categories. Business opportunities are examined in
terms of quantitative and qualitative factors
Realistic Retail/Service
Business Opportunities
Demand Supply
Reasonableness Check
II. Analysis of Opportunities by Sector
Examining Retail Opportunities
What is an Obstacle to Measuring Local Retail Demand and Supply?
Answer on Your Clicker
A. Trade areas vary
B. Difficult to obtain reliable data
C. Difficult to measure internet sales
D. Stores rarely fit into clean and discrete categories
E. All of the above
Includes techniques for estimating demand and supply for
various downtown uses. To the extent possible, opportunities
are examined in terms of quantitative and qualitative factors
II. Analysis of Opportunities by Sector
Analysis of Other Property Uses
• Restaurants
• Arts and Entertainment
• Housing
• Office Space
• Lodging
Housing is an essential, often overlooked, element in the vitality
of a downtown.
II. Analysis of Opportunities by Sector
Housing
Benefits:
• Increased foot traffic
• Increased “eyes on the
street”
• Support local businesses
• Housing for Downtown
Businesses
Assessment Steps:
• Estimate Demand
• Determine Supply
• Assess Need
• Identify Opportunities
• Identify Challenges
• Niche Development
• Image, Branding, Marketing
• Space Usage
• Business Retention/Expansion
• Business Recruitment
• Entrepreneurship
• Benchmarking
Market analysis findings can provide a solid and objective
foundation for launching economic development strategies for
your district.
III. Putting Your Research to work
Using Your Market Analysis
Pop. 7,479
Silvis is located in northwestern Illinois and calls itself “City of Progress”. It known for Hero Street, a historic landmark where 100 residents from 25 homes served their Country in conflict. Much of its early settlers derive from working on the largest terminal of the former Rock Island Lines.
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Other notes: Downtown businesses include several destination restaurants, and another business district hosts the PGA tour every summer TPC at Deere Run.
Four Goal Areas
• Marketing plan and brand strategy
• Main Street program
• Capture thoroughfare traffic using the First Ave/Downtown corridor
• Organize and expand tourism as a revenue base
40
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Strengths Weaknesses Access to industrial rail Car lots Authentic Mexican grocery store Condition of some buildings City-owned greenhouse Vacant buildings Easily accessible from east and west Five miles from Mississippi River Interstate access (I-74, I-80, I-88 leads to Chicago) Longevity of business owners Main Street designation Managed speed into the downtown Railway Park and restored caboose Two-lane, two-way traffic Vacant lots Well maintained and well lit
I. Understanding the Market
Trade Area Analysis
• Why create a trade area?
• Methods and tools for defining a trade area
• Introduction to online tools to draw a trade area
Trade Area Considerations
Factors to Consider:
• Population
• Proximity of competing
centers
• Local mix of businesses
• Local destination attractions
• Traffic patterns
Tools to Use:
• Focus groups
• Mapping using geographic
features (distances,
highways, drive-times, etc.)
• Mapping using customer
addresses and zip codes
A trade area is the geographic area from which a community
generates the majority of its customers. A community may
have both a convenience and a destination trade area.
Method 1: Business and Customer Focus
Groups
Retail Item Where do
you go to
shop?
How far are
you willing
to drive?
Which other
communities
shop in your
town?
Groceries
Drugstore
Hardware
Method 2: Select Geographic Features
• Mapping tools
• Rings
• County or Zip code area
• Drive Time
• Equal competition areas
Method 4: Use Customer Data
• Customer Address or Zip Code Data
• Zips easier to collect
• Electronically in Excel or Access is best
• Collection worksheet in toolbox
I. Understanding the Market
Demographics and Lifestyles
• Demographic Analysis
• Lifestyle Analysis
• Spending Potential
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Types of Data
• Population/households
• Age
• Income
• Education
• Occupation
• Ethnicity
• Residence
Demographic Analysis
Data Sources
Public Sources:
• US Census Bureau
• State and University Data Centers
Private Sources (examples):
• ESRI
• Claritas
• Others
57
Population/Households
What it tells us:
• Market size
• Future growth
• Average number of people that live together (household).
Trends in the U.S.:
• 309M in 2010, double that of 1950
• Average Household Size of 2.58
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Age
What it tells us:
• Predominance of certain age categories (each with different
personal expenditure preferences
• Under 18
• Over 65
Trends in the U.S.:
• 13.3% were 65 and older
in 2011 vs. 8.1 % in 1950 (US Census)
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Income
What it tells us:
• Distribution of income in the trade area as an indicator of
spending power
Trends in the U.S.:
• Median Household Income of $50,500 (US Census, 2011)
• 32.5% earn more that 75,000
• Impact of the Great Recession
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Education
What it tells us:
• Potential market support in certain product categories and for
certain businesses
Trends in the U.S.:
• 28.5% have 4 or
Or more years of
college
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Occupation
What it tells us:
• Distribution of white-collar, blue-collar and service sector
employees as an indicator of trade area preferences
Trends in the U.S.:
• Growth in service sector employment (2011 US Census)
• Retirement of baby-boom generation will stall the growth of the
workforce in many areas
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Ethnicity
What it tells us:
• Composition and diversity of trade area and variation in
preferences for different goods and services
Trends in the U.S.:
• Increased diversity
• Now only 63% are “white alone” (2011 US Census)
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Residence
What it tells us:
• Ownership levels may indicate propensity to shop for home
furnishings, equipment and upkeep
Trends in the U.S.:
• The homeownership rate in the U.S. declined to the lowest in
almost 19 years as rising property prices and mortgage rates
held back demand. Source: Bloomberg April 2014
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Data Sourc es - Applied Geographic Solutions 2000 Estimates and U.S. Census Bureau
0 2 4
Miles
Local RoadSecondary Road
Major Highway
Interstate Highway
Major Water
Population Density (Persons/Sq Mi)
1 to 250251 to 500501 to 750751 to 1,0001,001 to 1,2501,250 to 1,5001,500 to 1,750
1,750 to 2,0002,000 or More
Area of Inte rest
La Crosse Area Population Density
DowntownLa Crosse
%[
Mi s
si s
si p
pi
Riv
er
Use GIS to Visualize Data
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$T
$T
$T
$T $T
$T
$TBrown Deer Rd.
Dean Rd.
Bradley Rd.
Ran
ge
Lin
e R
d
Riv
er R
d.
Upp
er R
iver R
d.
Median Household Income - $75,238
Age Over 65 - 23.2%
Bachelor's Degree - 32.8%
Home Owner - 77.2%
Neighborhood Demographics
Sample Visitor Neighborhood
Neighborhood BoundaryStreets
$T Visitor Origin
Use GIS to Visualize Data
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Households in each trade area can be segmented into unique clusters that describe their demographic, lifestyle, media and purchasing characteristics. These systems help you know the potential customer in your area including what they buy and how to reach them.
Free zip code data:
• Community Tapestry by ESRI Business Information Solutions). http://www.esri.com/data/esri_data/tapestry
• Claritas PRIZM by Nielsen. http://www.claritas.com/MyBestSegments/Default.jsp
Lifestyle Analysis
Sample buying habits and preferences
Source: Nielsen PRIZM 2014
Downscale Younger w/ Kids
Bedrock America consists of economically challenged families in small,
isolated towns located throughout the nation's heartland. With modest
educations, sprawling families, and service jobs, many of these residents
struggle to make ends meet. One in five live in mobile homes. One in four
haven't finished high school. Rich in scenery, Bedrock America is a haven for
fishing, hunting, hiking, and camping.
Demographics Traits
•Urbanicity: Town/Rural
•Income: Downscale
•Income Producing Assets: Low
•Age Ranges: <35
•Presence of Kids: HH w/ Kids
•Homeownership: Mix, Renters
•Employment Levels: WC, Service, Mix
•Education Levels: High School Grad
•Ethnic Diversity: White, Black, Hispanic, Mix
Lifestyle & Media Traits
•Shop at Walmart Pharmacy
•Buy tricycles
•Read Baby Talk
•Watch Cops
•Buy pre-owned vehicle
Spending Potential
Estimates for a trade area are
based on demographic data and
available from:
• Private data firm reports
• Extension's “Gap Analysis
Calculator”
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Spending Potential Using Private Firm Reports
Potential sales in the trade area are also available through
purchase from private data firms based on their internal
models. See the “Food and Home” (mostly grocery stores)
example below:
Food at Home: Total $ $49,306,088
Average Spent $4,024.00
Spending Potential Index 90
Data Note: The Spending Potential Index represents the amount spent in the area relative to a national average of 100.
Source: Consumer Spending data are derived from the 2005 and 2006 Consumer Expenditure Surveys, Bureau of Labor Statistics.
ESRI
Spending Potential Using
the Gap Analysis Calculator Grocery store calculation:
U.S. sales per capita by based
on the U.S. Economic Census
($1,631)
The ratio of local trade area per
capita income to U.S. per capita
income ($25,537/$26,739)
Trade area population (29,897)
Multiplication of above figures
is equal to the “Potential Sales
in Trade Area” ($46 million)
I. Understanding the Market
Local and Regional Economics
Economic data can help describe downtown’s position in the local and regional economy and identify factors that are of
competitive advantage.
• Industry Concentrations and Employers
• Labor Force and Employment Levels
• Entrepreneurial Activity
• Business Climate Analysis
• Real Estate Activity
• Transportation Patterns
• Institutions
• Tourism and Community Attractions
• Quality of Life Measures
This part of the toolbox includes
sections to analyze:
I. Understanding the Market
Conducting Surveys and Focus Groups
1. Importance of Business Owner Research
2. Importance of Consumer Research
3. Types of “Primary” Research
4. The Process of Conducting a Survey
5. The Process of Focus Groups
6. Social Media?
1. Importance of Business Owner
Research Business owner research engages the business community
in the market analysis process. It invites business owners
to share their perspectives regarding the current and future
economic health of a business district.
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• What business challenges are you facing? Red flags?
• What business incentives or assistance would be helpful?
• Characteristics of your business: category, years of operation, space occupied, employment, etc.
• Market characteristics: busiest times, impact of community events, advertising effectiveness, target markets, etc.
• Toughest competition and the products or services that differentiate your business.
• Businesses that complement your business the most and those you would most like to see come downtown.
Sample Questions - Business Owner Research
2. Importance of Consumer Research
A market analysis should include local research to fully
understand the uniqueness of your particular market and its
consumers.
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• When do you typically shop for non-grocery items?
• What restaurants or types of cuisine do you prefer?
• Which events have you attended in the last 12 months?
• How often do you come downtown and why?
• How often and why do they shop at competing locations?
• Which businesses would you patronize if opened downtown?
• Demographics: gender, age, address, income, etc.
• Attitudes about the downtown and the community.
Sample Questions – Consumer Research
3. “Primary” Research
Secondary data is existing data which has
been collected, including U.S. census data,
county based economic data, school district
data, health department data, etc.
Primary data is information that you collect,
including surveys, case studies, focus
groups, interviews, pilot tests, observational
studies, etc. Data can be collected from
Consumers
Business operators and property owners
Mail Surveys
Usually cost efficient (few workers needed)
Lots of planning and development time.
Can get very good lists for sampling.
Can generalize to the population.
Can assess users and nonusers of downtown.
Fairly easy to analyze.
But . . . Still costs money (postage, data entry). Low
response rate. Self-selected respondents. Possible
language or literacy barriers. Cannot clarify information or
see if questions are confusing.
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Sample Surveys in the Downtown & Business
District Market Analysis toolbox
• Business Owner
Survey
• Consumer Survey
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Ability to target actual downtown users
Immediate (downtown experience is fresh in their mind)
Can target users by location, date and time of day
Expressive (can observe/record body language)
Cheapest (with volunteer interviewers)
But… More workers required. Time consuming. Misses
nonusers. Difficult to get a large sample.
Intercept Surveys
Telephone Surveys
Can clarify questions and expand on responses.
Reduces time spent reaching respondents.
Address issues quickly if calls are made from a call center.
Broad, random sample.
Target respondent by asking for him/her.
Can assess users and nonusers of downtown.
Fairly easy to analyze.
But . . . Not everyone has a listed number (cell phone users.
Excludes segments of the population. Only simple questions.
Labor intensive. Negative attitudes regarding phone surveys.
Online Surveys
Software/programs available free of charge.
Easy to format and develop.
Inexpensive to design, distribute, and collect data.
But . . . You must have a list of email addresses and make
random selections from the population. Excludes certain
segments of the population.
Personal Interviews
Flexible to Implement
Reach hard-to-reach populations.
Encourages responses and gathers depth of information
Targeted precisely.
But . . . Personal interviews sacrifice anonymity, and are
too costly to use to generalize to the entire population.
They require trained interviewers.
Focus Groups
Allow exploration of the idea or issue. Interactive.
Get details of “why” people feel and act the way they do.
Respondents can fully express their views.
Targeted
Fast and cheap.
But . . . Need skilled moderators. Cannot generalize to the
population. Can’t ask about information that should be
confidential. Interactive can create peer pressure. Hard to
analyze or assess consensus.
$ Time (staff, volunteers, time managing volunteers)
$ Dollar costs: postage, printing, telephone time, recorders
$ Training for interviewers
$ Participation requirements
$ Project time (how long to implement and get results)
$ Data entry
$ Data analysis
Figuring the Cost of Primary Research
4. The Process of Conducting a Survey
1. Define goals.
2. Develop and define method.
3. Ask: will this work within our constraints?
4. Develop survey instrument(s).
5. Identify population, select sample; develop contacts.
6. Test the survey instrument (often questionnaire).
7. Implement survey process.
8. Collect data.
9. Analyze data.
10. Prepare report.
• What questions are we trying to answer?
OR
• What problem/issue are we trying to address?
AND
• What new information do we need to address this issue?
Survey Design
Consider:
What survey method will we use?
Is this question part of another survey that we need to
match?
Will our proposed response group be able to answer this
question or provide this information?
Is there a standard way to think about the answer to this
question, that enables respondents to report accurately?
Will we be able to use this information if we get it?
Developing Survey Questions
5. The Process of Focus Groups
1. Define goals.
2. Selecting and Inviting Participants
3. Moderator and Assistant Moderator Skills
4. Beginning the Focus Group Discussion
5. Asking Questions that Yield Powerful Information
6. Systematic Analysis Process
7. Reporting the Results
Sample questions for a downtown resident focus group:
Think about our community. What do you feel are the
advantages of living downtown compared to other
surrounding communities? What are the disadvantages?
Consider the amenities present in our downtown such as
entertainment and cultural venues, dining establishments,
and shopping opportunities. Which amenities contribute
most to your quality of life downtown? What additional
amenities would improve downtown as a place to live?
Developing Focus Group Questions
I. Understanding the Market
Peer City Analysis
1. Identifying Peer Cities
2. Comparing Peer City Business Districts
3. Learning from Peer Cities
1. Identifying Peer Cities
Socio-Economic Measures
• Demographics
• Household Income
Geography
• Relationship to regional Cities
Other Characteristics
• University or Hospital presence
• Economic niche (tourism, commuter, etc.)
2. Comparing Peer City Districts
Research
• Determine significant similarities and differences
Data
• Demographic & Lifestyle
• Employment
• Housing
• Vacancy Rate, Rents
• Retail & Service mix
3. Learning from Peer Cities
Determine Learning Objectives
• Just data, or qualitative lessons?
• Visit and/or Interview Stakeholder(s) in Peer Cities?
How Does Our Community Compare?
• Business Mix, Housing
What has worked, not worked?
Grain of Salt
Peer City Example
Group 1: University
Cities
Population 2000-2010 Pop.
Growth Rate
Pop. In
Family HH
Pop. In Non-
Family HH
Pop. In Group
Quarters
Median
Age
Median
HH Inc.
% Rented
HH UnitsUniversity Enrollment
Whitewater, WI 14,390 0.6% 5,553 5,294 3,451 22.9 $36,415 66.0% Universit of Wisconsin - Whitewater 10,230
Carbondale, IL 25,902 1.7% 10,238 12,064 3,241 23.5 $25,021 75.1% Southern Il l inois University 18,847
Charleston, IL 21,838 0.4% 9,807 7,983 3,798 23.9 $31,781 56.6% Eastern Il l inois University 9,700
Macomb, IL 19,288 0.4% 8,244 7,055 3,711 24.1 $34,793 58.1% Western Il l inois University 12,200
Menominee, WI 16,264 0.8% 7,267 5,701 2,984 24.1 $41,324 59.7% University of Wisconsin - Stout 9,339
Northfield, MN 20,007 1.2% 12,338 2,965 4,540 26.4 $60,164 31.4% Carleton College; St. Olaf College 1,991; 3,007
Platteville, WI 11,224 1.3% 4,646 3,825 2,620 23.4 $43,050 54.3% University of Wisconsin - Platteville 8,624
Ripon, WI 7,733 0.3% 5,265 1,501 887 36.9 $41,458 38.0% Ripon College 931
River Falls, WI 15,000 1.4% 8,414 4,047 2,471 24.6 $53,306 44.9% University of Wisconsin - River Falls 6,796
Whitewater, WI
Peer City Example
Whitewater, WI
Research Questions:
• What is your relationship to your University?
• What businesses thrive in these communities?
• Are Whitewater’s housing pressures unique, and what
to do about them?
• How to successfully utilize local assets?
• Composition of the business/industrial park?
• Strategies to grow local University spin-off firms
II. Analysis of Opportunities by Real Estate Sector
• Retail/Services
• Restaurants
• Housing
• Office
• Lodging
Includes tools for estimating demand and supply for selected
business categories. Business opportunities are examined in
terms of quantitative and qualitative factors
Realistic Retail/Service
Business Opportunities
Demand Supply
Reasonableness Check
II. Analysis of Opportunities by Sector
Examining Retail Opportunities
/
Retail Analysis Tool #1: Business Mix Analysis
Comparison with Wisconsin cities/villages with 2,500-5,000 Pop. (Average of 60 Downtowns)
NAICS Description Number Sales (000's) Full-service restaurants 4.57 2,515 Beauty salons 3.52 573 Drinking places (alcoholic beverages) 3.08 784 Gasoline stations 1.72 6,295 Other amusement (bowling, golf, fitness) 1.63 779 Automotive mechanical & electrical repair 1.30 491 Gift, novelty, & souvenir stores 1.08 378 Used merchandise stores 1.08 466 Grocery stores 1.07 8,084 Automotive parts, accessories, & tire stores 1.05 1,032 Appliance, television, & other electronics stores 0.93 1,459 Florists 0.88 210 Barber shops 0.78 71 Sporting goods stores 0.73 348 Pharmacies & drug stores 0.72 1,720
Retail Analysis Tool #3: Pull Factors
Pull Factors measure the strength of a trade area. It allows
you to measure trends in sales and analyze your
performance against competitors.
A pull factor bigger than 1.00 means the area is “pulling” in customers.
Pull Factor = Community Sales Per Capita
State Sales Per Capita
• Case studies of downtown retail and service businesses that:
build on downtown’s character and
offer products and services not found in big box stores.
• Searchable by
Type of business
Size of community
“Reasonableness Check”
Innovative Downtown Businesses Clearinghouse
Includes techniques for estimating demand and supply for
various downtown uses. To the extent possible, opportunities
are examined in terms of quantitative and qualitative factors
II. Analysis of Opportunities by Sector
Analysis of Other Property Uses
• Restaurants
• Arts and Entertainment
• Housing
• Office Space
• Lodging
Housing is an essential and often overlooked element in
revitalization of downtown districts. Changes in demographics,
demand, and economics are creating new opportunities in
communities of all sizes. How can we determine specific
opportunities in a particular community?
II. Analysis of Opportunities by Sector
Housing
Raise your hand….
Housing
• Is housing part of your downtown vitality plan?
• Is housing part of your community’s economic development
approach?
• Is housing part of your community sustainability strategy?
• Do you know what your City’s zoning allows downtown?
• There has been no new development in the downtown for
years… decades…
“Housing Must Be Downtown’s Political and Business Priority” - Jennifer T. Moulton, former Director of Community Planning, City and County of Denver
Housing Snapshot
• Local Demographic Data
• Local Economic & Employment Data
• Housing Affordability & Cost Burden
Comprehensive Needs Assessment
• Greater Data Detail
• Investigate Policy & Infrastructure Opportunities & Barriers
• Engage Housing Industry Stakeholders
Successful downtown revitalization efforts often focus on creating
synergy from the optimal mix of building and space uses.
Housing Analysis Options
Characteristics
• May be 3-12 month process
• Utilize local public, private, and survey data
• Identify specific needs and opportunities
• Engage decision makers, industry, and public in conversation
Data
• Local Development Figures (# units, price, historical trends)
• Sales Data (# units, price)
• Map spatial trends in development, value
Comprehensive Housing Assessment
Define Housing Market Area
• Typically entire community and surrounding geography
Population & Households
• Unit of analysis is the household
Age
• Generational differences may translate into housing priorities
Income & Employment
• Income determines affordability
• Assess employment trends
Latent & Move-up Demand
Housing Demand
Data Required:
• Number and Type of Units
• Tenure
• Vacancy Rate
• Housing Prices
• Rental Rates
Housing Supply
Assessment
Survey & Focus Group Research
Interviews
Review data, analysis, and insight with planning team
Opportunities, Barriers, Priorities
• Is housing part of the Downtown Plan?
• What does zoning permit for housing in and near downtown?
• What are the stated community’s priorities regarding housing?
III. Putting Your Research to Work:
Making Recommendations
• Niche Development
• Image, Branding, Marketing
• Space Usage
• Business Retention/Expansion
• Business Recruitment
• Entrepreneurship
• Benchmarking
• Niche strategies allow a downtown to gain a dominance in
certain business categories
• Niches work well in highly competitive business environments
(market differentiation)
• Niches require cooperation between local businesses (education
about niches)
• Niches can be based on consumer segments or product
segments
A niche is a critical mass of businesses serving a common
market segment(s) that is also jointly marketed and promoted.
III. Putting Your Research to work
Niche Development
Corning, NY
Pop. 11,000
Home of:
Corning, Inc.
Museum of Glass
Rockwell Museum of Western Art
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Niche: Art Glass:
Hot-glass studios, art galleries, apparel, antiques, home
accessories, gifts, micro-breweries add restaurants
Continued –Niche Development
Saratoga Springs, NY
Pop. 26,000
Historic resort town:
mineral spring spas
horse racing
Skidmore College
Performing Arts Center
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Niche: Women’s Clothing
Independent women’s clothing stores, accessory stores, gift shops,
spas, skincare, massage, salons, and cafes. A number of chains
have located downtown (Eddie Bauer, The Gap, Borders, etc.).
Continued –Niche Development
Sheboygan Falls, WI
Pop. 7,000
Historic and well-restored
community near the
Kohler factory. Five
miles from Sheboygan
and Lake Michigan.
125
Niche: Home Improvement
Paint, furniture, lighting, hardware, antique, landscape, and
gardening stores along with interior design and art studios. An
annual event called Home & Hearth promotes home
improvements and decorating.
Continued –Niche Development
Waynesville, OH
Pop. 2,600
Waynesville is located in
southwestern Ohio
and calls itself "The
Antiques Capital of the
Midwest",,
126
Niche: Antiques
25 downtown antique shops and a number of specialty gift shops,
food & drink establishments, art galleries, and furniture stores.
Continued –Niche Development
New Glarus, WI
Pop. 2,100
New Glarus is located in south-central
Wisconsin and calls itself
“America’s Little Switzerland”. It
has become famous for its
authenticity, built on its Swiss
heritage.
127
Niche: Ethnic Heritage
Businesses include a butcher shop, bakery,
brewery, restaurants, lodging, and festivals
related to its Swiss heritage.
Continued –Niche Development
Reading OH
Pop. 11,000
Reading is a suburb of
Cincinnati
128
Niche: Weddings
Focuses on bridal shops and supporting businesses such as
florists, photographers, jewelers, and stationary stores. There
are 31 such stores.
Continued –Niche Development
1. Define Your Key Markets Segments and Market Position
2. Improve the Image and Develop a Brand for Downtown
3. Implement Marketing Programs
Uses market information to learn about your downtown’s key
consumer groups and how to reach and serve them better.
III. Putting Your Research to work
Image, Branding, Marketing
Define Your Key Markets Segments and Market
Position
Use Your Market Analysis Findings to Answer the Following:
• What is my geographic market?
• What are my target market demographic characteristics?
• How is my consumer market changing and how can
businesses effectively respond?
• What customer segments am I currently attracting and
which ones offer potential?
• Who is my competition?
Improve the Image and Develop a Brand for
Downtown
Use Your Market Analysis Findings to Answer the Following:
• What negative perceptions/realities affect downtown’s
ability to attract customers?
• What positive perceptions and amenities currently draw
people downtown?
• What information do I need to effectively brand my
downtown business district?
• What steps should I take to make downtown more
attractive to its target market segments?
Implement Marketing Programs
Use Your Market Analysis Findings to Answer the Following:
• What types of advertising, promotions and P/R would
effectively reach current and potential customers?
• How do I evaluate return on my advertising and/or
marketing investment?
• What special events might be popular in my downtown?
• What special promotions might my business district want
or need?
• How can existing businesses (individually or collectively)
sell more goods and services to event visitors?
Downtown Business Arrangement
• "A-Street" and "B-Streets"
• Pedestrian interaction.
• Consider auto access.
• Consider walking distance and use of both sides of street
• Street-level and upper-level units.
Clustering
Involves geographically grouping certain businesses together so that both the customers and business operators benefit.
Successful downtown revitalization efforts often focus on creating
synergy from the optimal mix of building and space uses.
III. Putting Your Research to work
Space Usage
Ente
rtain
ment:
Theate
rs
Ente
rtain
ment:
Bars
&
Resta
ura
nts
Reta
il:
Com
parison
Reta
il: S
pecia
lty
Reta
il:
Convenie
nce
Hote
l
Off
ices
Resid
ential
Residential
Offices -
Hotel
Retail: Convenience
Retail: Specialty Stores
Retail: Comparison
Entertainment: Bars &
Restaurants
Entertainment: Theaters -
Level of Market Synergy in Mixed Use Development
Strong
Weak or Uncertain
- Neutral, Absence of Synergy
Potential Market Conflict
Source: Real Estate Market Analysis: A Case Study Approach
Compatibility of Mixed Uses
Form a business retention and expansion team
Why is it important?
• Researchers estimate that existing businesses create a large percent of all new jobs.
• Businesses that stay competitive are more likely to remain in the community – and possibly expand.
• Keeping an existing business is often easier and less costly than recruiting a new business.
• Businesses considering coming to the community will talk to existing businesses. Odds for attracting new businesses are better if existing ones are happy with the community.
III. Putting Your Research to work
Business Retention/Expansion
1. Forming a business retention and expansion team
2. Identifying warning flags
3. Offering individual business assistance
4. Developing business retention and expansion strategies
BR & E Process
• Step 1: Assemble a Team
• Step 2: Create a Supportive Business Environment
• Step 3: Assemble Recruitment and Marketing Materials
• Step 4: Design an Ideal Tenant Mix
• Step 5: Identify Prospective Tenants
• Step 6: Contact Prospective Tenants
• Step 7: Close Deals with Prospects
The key is to honestly demonstrate that the community is a
profitable place to do business.
III. Putting Your Research to work
Business Recruitment
Sample Worksheet Summarizing Opportunities
Supported in Study: N
AIC
S C
od
e
Category
Market Opportunities
Focu
s G
rou
p R
esu
lts
Co
nsu
me
r Su
rve
y
Bu
sin
ess
Ow
ne
r Su
rve
y
Bu
sin
ess
Mix
An
alys
is
De
mo
grap
hic
An
alys
is
Surp
lus/
leak
age
St
ud
y
442 Furniture/Furnishings X
443 Electron/Appliance X X
444 Building material and
garden equip dealers
Garden store
Hardware store X X X X X
445 Food and beverage
stores
Grocery store
Specialty food (local foods, meats, cheese,
wine)
X X X X X X
Finalizing Your Wish List: • Is there appropriate space in the district for this type of
business?
• Will it complement existing businesses?
• Will it serve targeted market segments?
• Does it fill an important gap in the business mix?
• Will the business strengthen an existing cluster of businesses?
• Was this business category identified as important in local
consumer research?
• Does market demand and supply data support the need for this
types of business?
• Does the business fit it with the market position and vision
statements?
1. Use information from your market analysis to find clues about
prospective entrepreneurs.
2. Use information to examine the strengths and weaknesses of
your district’s infrastructure as it relates to entrepreneurship.
3. Your market analysis may provide ideas on how to build
connections among entrepreneurs and the community.
Use your market analysis to support entrepreneurship in your
downtown or business district.
III. Putting Your Research to work
Entrepreneurship
III. Putting Your Research to work
Benchmarking
• Demographics
• Employment Indicators
• Investment Indicators
• Housing
• Office Space
• Arts and Entertainment
• Lodging
• Retail and Services
• Restaurants
• Transportation and Safety
Statistical data assembled in your market analysis can be used
to establish goals and measure progress (benchmarking)
related to the downtown economy.
Josh Clements [email protected]
Jenny Garner [email protected]
Bill Ryan [email protected]
Questions: Please Contact Us:
Funding - North Central Regional Center for Rural Development (NCRCRD) Seed Grant