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Economic development centers and chambers of commerce deeply understand the importance of municipal tax revenues derived from local retail sales. They know it is paramount that their cities, towns and unincorporated areas continue to attract the right mix of retail establishments to set up shop locally.
In order to attract the right mix of retailers, you need to know specifically which ones are worth reaching out to in the first place. You also need to know what their needs are and whether your city can expect to attract them. To get these answers, you need to conduct research: usually by commissioning a retail gap analysis report.
A retail gap analysis report ? also known as a retail leakage/surplus report -compares the amount of local demand (in terms of annual revenue spent by residents) for retail goods and services ? by retail category or sector ? to the amount of local supply (expressed as a revenue figure) for those same retail goods and services. The report then details those retail sectors for which your city is losing money each year because your residents are going elsewhere to make certain purchases.
How Traditional Retail Gap Analyses Fall Short
While traditional retail gap analysis reports effectively reveal which retail sectors represent an opportunity for growth for your city, they have three main shortcomings, namely:
- the reports generally fail to establish a proper baseline of similar areas (i.e., cities, towns, regions) against which to compare the target area’s retail profile; therefore, the resulting retail sector recommendations are often skewed and inaccurate because they are not normalized for “cities like yours.”
- these reports lack key components that would make the results easy to put into action. While the reports are usually full of good data, the data is not presented in a way that EDCs and CoCs can use as a road map for taking effective retailer recruitment action.
- the report srarely extend into the recruitment of commercial-industrial and other B2B-focused companies, but instead are limited to targeting retailers (B2C) only.
Download Our Free Mini-Report Right Now
MindEcology has written a mini report to help you understand what you should expect from a complete retail gap analysis. Our FREE mini report, “Beyond the Gap: The 7 Essential Ingredients of an Actionable & Accurate Retail Gap Analysis,” describes the above-mentioned shortcomings of traditional reports in more detail. It then outlines in detail the 7 essential ingredients of an actionable and accurate retail gap analysis. Most of these ingredients are unfortunately missing from traditional reports, which are driven by old-school analytical techniques and methodologies.
At MindEcology, our philosophy on these reports is: if your economic development center or chamber of commerce is going to spend its precious resources on a retail gap analysis report, you deserve to acquire as much actionable, accurate intelligence as you can.
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