Real estate site selection: three things effecting your strategy
If you have ever worked in corporate real estate, you know that tracking and maintaining your real estate pipeline can be challenging. Regardless of the number of stores in your network, or the strategy of your company, having a sound real estate site selection strategy is critical to future success.
However, having a plan is only the first step. Having the right system in place to manage those goals becomes the factor that separates you from the competition.
What is a real estate site selection plan?
A real estate site selection plan is a collection of events and strategies that will impact your store network. These strategies can vary by type and stage across the country or globe: growth in Chicago, consolidation in Phoenix, a new prototype in the U.K., acquisitions in Mexico.
The key is to understand those objectives to plan for short- and long-term goals. But be aware, organizations without proper systems in place constantly run into roadblocks that ultimately lead to failed execution. Let’s review some of the most common issues and questions real estate leaders face.
Why can’t I get reliable data?
Information Silos: Individual groups, or people, manage their data. When teams don’t share information, they create bottlenecks to stifle your strategic progress.
Disparate Data: The classic “spreadsheet culture”. I’m sure you have the “PointFile-FinalFinal-V3-FinalEdits.xlsx” data source, right? Well, I’ve got bad news for you, Chuck in Operations has the same file, and it doesn’t match yours!
Slow to React: Have you ever asked for data from the “source” and the answer you get is, “It will take 2 weeks”? Let me tell you, I’ve worked for the 2 weeks guy before; it takes 2 hours, but now you’re forced to wait for data you can only hope is what you asked for.
Why are we opening bad locations?
Incomplete Picture: Making decisions only based on financial decisions can make waves of impact across a market.
Feel vs Fact: “I think this site will do $20M in sales” … because I drove by it 3 times.
Reliance on Brokers: Brokers can be extremely beneficial, but are the sites they send you the best options for your goals? Are they aligned with your strategy?
Opportunistic Approach: Are you just following the lead of Big Box retail?
What is the cost of bad decisions?
Cost to Develop: Ground-up development can cost millions. Isn’t it worth it to have a system in place to make sure you get it right?
Stuck for Years: Signing up for an initial 10-year lease? What if you find out in year 2 this was a bad choice? Can you afford to stick with a loss leader for years?
Competition Wins: Inability to execute with speed gives competition the edge to get the “A” locations, leaving you only second-tier options to choose from.
I can see a collection of virtual heads nodding to many of these issues. We have been there and dealt with them far too long. So, what can you do to ensure your organization meets its real estate goals and avoids falling victim to bad decision-making? We have some tried and true methods that have set up Fortune 500 organizations to drive forward with confidence.
Now, don’t you want to know how to put together a truly effective real estate plan? Read part 2 of this blog series.
At Kalibrate, we start with our client’s proprietary data – usually, they have much more than they expect, but it’s not centralized in a way to provide actionable insight.
Once you begin to collate your data alongside third-party sources available on the market, you can have far greater confidence that your rightsizing decisions will deliver on your goals.
If you’d like to know more, reach out to speak to a member of the Kalibrate team.
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