ICSC Florida panel recap: What happens when you open (or close) a store

This week at ICSC Florida, I had the privilege of participating in a thought-provoking panel discussion titled “What Happens When You Open (or Close) a Store — Impact on Sales, Cannibalization and Digital Reach.” Moderated by Clay Hallman, Vice President of Research at Simon Property Group, the session brought together industry perspectives from myself and Stephanie Cegielski from ICSC, we discussed how the measurement of store impact has evolved in our increasingly digital landscape.

The complexity of measuring impact

The retail landscape has undergone a dramatic transformation over the past decade, fundamentally changing how we approach store impact analysis. When Clay asked about how measurement processes have evolved, I reflected on just how unrecognizable today’s methodologies are compared to what we used ten years ago.

A decade ago, e-commerce represented just 1-2% of sales for most retailers. Today, that figure has skyrocketed to over 16% nationally, with some brands seeing even higher percentages. This seismic shift has introduced unprecedented complexity to how we evaluate store performance and impact.

The days of measuring success based solely on individual store sales are behind us. Today’s analysis must account for the ripple effect – examining incremental revenue across both in-store and online channels while simultaneously assessing cannibalization across the same spectrum. Our focus has shifted to understanding the true net impact rather than relying on surface-level numbers.

For commercial real estate professionals, this evolution means rethinking what constitutes location value. It’s no longer just about foot traffic metrics. Instead, we must consider how each site contributes to a retailer’s broader ecosystem – driving brand engagement, supporting fulfillment operations, and enhancing digital conversion rates.

The challenges of omnichannel measurement

While most retailers acknowledge the importance of omnichannel strategies, the reality of measuring total impact when opening or closing stores remains challenging. Traditional year-over-year sales comparisons, once the industry standard, are now often misleading because they fail to account for broader market shifts or company-wide strategic changes.

More sophisticated approaches, such as store-to-market comparisons, offer improved insights but still carry limitations. These methods can be volatile and require large sample sizes to generate reliable conclusions – a luxury not always available in real-world scenarios.

The gold standard in our industry has become the test vs. control methodology. By comparing the performance of impacted stores or markets to similar locations that weren’t affected by openings or closures, we can isolate the actual impact with much greater precision. This approach allows us to identify whether changes represent genuine incremental growth, cannibalization effects, or online sales recapture.

This level of analytical rigor is crucial for making informed, confident decisions that can significantly impact both retailers and commercial real estate stakeholders.

Essential tools and common blind spots

When discussing the tools and data that commercial real estate leaders should prioritize, I emphasized the need to think beyond traditional store boundaries. The most forward-thinking retailers are implementing omnichannel proformas that account for both in-store and online impacts, providing a comprehensive view of how new locations affect local sales, digital conversion rates, and overall brand engagement.

Mobility data has become an invaluable tool in our arsenal, revealing critical insights about customer origins and travel patterns. However, data alone isn’t sufficient. It must be integrated with financial data and customer journey analytics to paint the complete picture. For instance, understanding whether a location’s sales are driven by residential factors versus employment, shopping patterns, or tourism can dramatically influence strategic decisions.

The restaurant industry faces unique challenges in this regard, particularly with the continued rise of third-party delivery services. Integrating the importance of these channels into location analysis becomes complex due to the proprietary algorithms these platforms use for delivery optimization.

Key takeaways for the industry

Based on our panel discussion and the insights shared, I want to leave CRE leaders with three critical takeaways that can transform how they approach store impact analysis:

1. Quantify the full impact of store decisions Every store opening or closure affects more than just four walls—it influences in-store and online performance across your network. Understanding this total impact is critical to protecting revenue and market share. The retailers who recognize this interconnected reality are the ones making smarter, more strategic location decisions.
2. Eliminate the noise for accurate insights Traditional year-over-year comparisons can mislead. A data-driven, noise-free analytical approach is essential to isolate the true performance shifts caused by location changes. This means moving beyond surface-level metrics to methodologies that can separate genuine impact from market-wide trends and seasonal variations.
3. Use insights in financial proformas Leverage these findings to build a forward-looking location strategy – one that integrates these insights into financial models for more accurate forecasting and better capital allocation. The goal isn’t just to measure what happened, but to use those insights to optimize future decisions.

Why this matters: Retailers who master this process make faster, more confident real estate decisions, reduce risk, and unlock hidden growth opportunities.

The panel reinforced that while the complexity of impact measurement has increased dramatically, so have our capabilities to generate meaningful insights. The retailers and commercial real estate professionals who embrace these comprehensive measurement approaches will be best positioned to drive sustainable growth and value creation in our interconnected, omnichannel world.