7 Ways Retail Data Impacts CRE Investments

As e-commerce continues to grow, analyzing consumer and retail data is becoming even more vital for commercial real estate (CRE) professionals. Understanding retail data can help investors make informed decisions regarding property selection, tenant selection, asset management, and more.

In this guide, we explore seven ways leveraging retail data can influence CRE investments, focusing on using geographic information systems (GIS) analytics. Read on for actionable insights.  

Understanding the Value of Retail Data

Retail data covers a broad spectrum of demographic information, sales data, and consumer shopping patterns.  

The value of retail data lies in its ability to provide a well-rounded understanding of market dynamics and consumer behavior. Retail data can help with understanding consumer behavior, foot traffic patterns, and sales trends.

Comprehensive retail data helps investors to understand tenant performance, market stability, and the impact of economic factors, assisting with risk mitigation.

Accessing Retail Data

Today, there are many online GIS platforms, such as AlphaMap, you can use to gain access to and analyze important retail information. GIS-based platforms offer powerful frameworks for extracting actionable insights. They include features such as:

  • Location-based insights using GIS technology
  • Data aggregation from various sources for comprehensive analysis
  • Visualization tools to present data in visually accessible formats for better understanding
  • Predictive analytics using advanced algorithms to forecast market trends and consumer behavior
  • Integration with real estate data

The Significance of Retail Data for Commercial Real Estate Professionals

Using insights gleaned from retail data, CRE investors can adapt their investment strategies to suit the market environment. It can thus have a significant impact on investment decisions.

The significance of retail data for CRE professionals
The significance of retail data for CRE professionals

For CRE developers, retail data comes in handy when creating a new shopping precinct, for example. It can even help with choosing the perfect tenant mix. CRE brokers can use retail data to better serve their clients’ needs.  

Retail data is crucial for CRE professionals because it aids in:

  • Market analysis
  • Property valuation
  • Tenant selection and retention
  • Risk mitigation
  • Competitor analysis

Retail data, including demographic, sales, and consumer shopping behavior, is crucial for tailoring offerings and understanding financial performance. As online shopping becomes more prevalent, investors need to understand both online and offline sales data to stay competitive.

Omnichannel data offers a comprehensive view of a retailer's performance, and investors must evaluate the impact of online sales on traditional stores and foot traffic.  

7 Ways Retail Data Impacts Commercial Real Estate Investments  

Retail data is a compass that guides CRE professionals through the unknowns of e-commerce to stay ahead in the game. Let’s explore seven ways retail data impacts CRE investments.

1. Maximizing Property Value  

Retail data, alongside GIS analytics, becomes an invaluable ally in the mission to maximize property value. It helps investors understand past and present trends through descriptive and diagnostic analytics.

Descriptive analytics summarize historical data, benchmark performance, and identify root causes of trends. Diagnostic analytics attribute changes to variables and assess potential risks.  

A combination of these tools empowers stakeholders to make strategic decisions that enhance the desirability and profitability of their retail properties. Retail data guides investors toward actions that bolster property values.  

2. Enhancing Asset Management  

Asset managers can use sales data to predict future demand, identify high-performing tenants, and make informed decisions on lease renewals and tenant selections. Retail data reveals market intelligence, allowing for proactive adjustments to pricing, marketing strategies, and tenant offerings.  

One of the means used to improve asset management is prescriptive analytics. Prescriptive analytics is an important tool in budgeting, providing recommendations for the best course of action to achieve specific business objectives.

It goes beyond descriptive and diagnostic analytics, focusing on recommending optimal strategies for future scenarios, thus enhancing the efficiency and profitability of CRE assets. Prescriptive analytics are useful in a variety of ways:

  • Optimizing resource allocation
  • Scenario analysis
  • Risk mitigation
  • Performance improvement
  • Multi-objective optimization
  • Adaptive planning
  • Data-driven decision making

Prescriptive analytics makes use of retail data as its core source of information.

3. Personalizing Customer Experience  

In the modern world, personalization of the retail experience has become a necessity. Retail data plays a vital role in personalizing the shopping experience and boosting marketing efforts. Understanding consumer behavior through data allows investors to tailor the shopping experience and boost marketing efforts.  

Personalize your customer's experience
Personalize your customer's experience  

Personalized customer experiences establish a direct connection between the consumer and the commercial space, going beyond the transaction to build long-lasting relationships.

4. Sales Forecasting  

Sales forecasting is an essential part of any business planning process. Retail data can help to improve sales forecasting by revealing past trends, customer behavior, and market trends. With the help of data analytics tools, you can forecast future sales based on seasonal trends, customer preferences, and external factors. This helps you anticipate market changes, adjust inventory to demand, and fine tune your marketing plans.

In turn, sales forecasting reduces risk by anticipating future demand. You can plan and adjust your inventory and production schedules accordingly. It also improves profitability by aligning resources with expected sales. The benefits? More precise budgeting, price forecasting, and resource allocation.

Real-time retail data from your POS (point of sale) systems and online platforms can help you respond to market dynamics immediately. This helps you stay on top of trends and drive long-term profitability.

5. Demand Forecasting  

Demand forecasting is essential for investors because it gives them an idea of profitability and what the market will be like in the future. In CRE, it helps investors and brokers to understand the potential demand for a particular type of property.  

With demand forecasting, you can make better decisions to maximize returns and minimize risk. You can ensure that the assets you buy match the expected demand and trends in the market. You can align your strategies with expected market dynamics to improve overall investment performance.  

For retailers, demand forecasting can help to understand demand for specific products and services.

6. Optimizing Location Selection

The adage ‘location, location, location’ is a cliché for a reason. Retail data guides investors to optimal locations.  

Retail data empowers CRE investors and retailers to pick the best locations, ensuring their properties are strategically positioned to attract the right audience. By analyzing retail data, CRE professionals can identify areas with high foot traffic or sales volumes.

Optimizing location selection by using retail data
Optimizing location selection by using retail data

These analyses might look at:

  • Foot traffic patterns
  • Sales performance metrics
  • Demographic analysis
  • Competitor analysis
  • Seasonal trends

A data-driven approach minimizes the risks associated with picking the wrong location. By using retail data to identify high-traffic areas, you can maximize returns and align your investments with areas that have sustained high foot traffic and economic activity.  

7. Competitive Insight  

As in any business environment, it’s important to understand your competition in CRE. Retail data gives you a bird’s eye view into your competitors’ activities.

By looking at the data closely, you can get a better understanding of how competitors position themselves in the market, how they set prices, and how they engage with their customers.

This market intelligence allows you to fine-tune your strategies and predict market changes. Every advantage counts and helps you stay one step ahead of the competition.

Final Thoughts on the Role of Retail Data in CRE

Retail data is a valuable resource that commercial real estate professionals can use to make informed investment decisions. Using the power of GIS analytics, it provides insights into consumer behavior, market trends, and competitive dynamics. It also enables investors to identify opportunities and mitigate risks.

As retail continues to evolve, the role of retail data will become increasingly important. CRE professionals who can effectively use retail data will be able to stay ahead of the competition.  

If you’d like to explore GIS location insights and analytics, book a demo with AlphaMap today.

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