In commercial real estate, foot traffic indicates the number of people that visit a property location during specific times, how often they visit, and how long they typically stay.
If you’re a commercial real estate property owner or developer, analyzing footfall data can help you understand who visits your business and when.
It can also reveal patterns such as the most popular times of day, and days of the week that customers visit, where else they are likely to visit, and more.
Analysis of these patterns can help you to make informed decisions in a competitive market.
Read on to find out:
- Why foot traffic data is useful in commercial real estate
- Where foot traffic data comes from
- How to find good quality foot traffic data and test it
Who Uses Foot Traffic Data and Why?
Foot traffic analytics are used by retailers, commercial real estate firms, retail analysts and investors, and marketing agencies to better understand customer behavior. The resulting data helps to identify trends and patterns which inform important decision-making.
Some Potential Use Cases for Foot Traffic Data in Commercial Real Estate
- Understanding how well an existing retail store location is performing
- Determining the best time to open or close a business
- Making strategic decisions about where (and when) to open new stores
- Finding the best location for a retail business
- Identifying and analyzing retail trends
- Optimizing store layouts
- Planning marketing campaigns
- Organizing employee schedules
Where Does Foot Traffic Data Come From?
There are many ways to collect foot data, but the most common is through mobile GPS tracking devices like smartphones.
The location data collected can then be combined with other information (such as demographic data) to produce insights into foot traffic patterns and trends.
Of course, collecting this amount of data with such ease would not have been possible before the smartphone era and retail researchers and analysts would have done most of their research manually.
This might have involved sitting for hours at a store entrance counting people, using a counting mat to track the people walking in and out, and/or creating customer surveys to find out who visits the store and where they live. All very time-consuming and onerous.
Thanks to modern technology, this process is much easier (and quicker). Today, geographic information systems (GIS) analytics tools allow retailers to access detailed foot traffic counts for a specific location at the click of a button.
According to Statista, in 2022, an estimated 307 million Americans are using smartphones. AlphaMap’s GIS analytics tool, for example, taps into over 130 million of those smartphones to estimate foot traffic trends and rankings.
This is an incredible potential resource of customer data but only if the mobility data is accurate.
Common Problems Using Foot Traffic Data
There are a few potential problems that can occur when using old-school methods of manually tracking foot data and also when collecting mobility data from mobile phone providers.
Data Collected Manually May Be Inaccurate and Therefore Not Useful
Inaccurate data collection can be an issue when foot traffic data is collected using a sensor. For example, sometimes the foot traffic sensor is placed in the wrong location or it’s not working properly.
Too Little Data is Collected
In order to analyze trends over time, you need a lot of data. It’s simply not enough to track footfall into your shop on only one day of the week, or for only one hour.
You need a consistent amount of data from a large sample size. This is where mobile data by far outperforms anything you can collect yourself.
Location Data Collected by Mobile Phones May be Inaccurate Because the Sample Size is Too Small
Until recently, a major unresolved problem with foot traffic data collected from smartphones was that businesses were relying on a single mobile service provider.
The problem is that data from one mobile provider can be wildly different to another because of key differences in their data-collection methodologies – differences which make one provider stronger in certain situations and weaker in others.
To solve that problem, AlphaMap has partnered with three of the leading mobile data companies and uses the results from each provider to create a smarter ‘combined’ estimation, accounting for the unique strengths of each provider.
This means a much larger sample size, and much more accurate foot traffic analysis.
Data Collected Can be Affected by Weather Conditions
For example, if it rains, people may be less likely to go outside and walk around, which would lead to lower foot traffic numbers. This is a problem that can affect both manual and mobile data collection methods.
How to Access Foot Traffic Data and Trends
In today’s technologically driven world, brokers and retailers can throw away their clipboards and counting mats!
There are several GIS tools on the market today which allow you to input a chosen location and get foot traffic data which relates to the site or the area surrounding it.
You can view hourly and daily foot traffic statistics and analyze trends over time.
Cross Visitation
A smart feature which today’s GIS tools provide is the ability to see where else the people who visit your business go in the same visit.
This is sometimes called ‘cross visitation’. You can access detailed demographic data for those people which makes the data more meaningful.
For example, do they visit a few others stores in the same area, and what can these visits tell you about this specific buyer’s behavior?
You can usually break down the other visits by venue, retail brand, and type of retail (such as gas stations, fitness centers, restaurants, and more).
Cross visitation helps you to find synergistic properties near your specific location, which can be particularly useful for commercial real estate investors who are choosing an ideal location for a new store and are wondering about the viability of their specific brand in that area.
Customer Retention
Another useful feature for retailers shows customer retention. That is, the number of recurring visits (from the same people) over a period. Variations in this information could yield many clues to store owners such as:
Drop in customer visits – a new competitor opening down the road?
Increase in customer visits – a highly successful marketing campaign which could be repeated?
Of course, these are simplified extrapolations, and analysts should be careful of making wild guesses without having reviewed all the information at hand.
Fortunately, GIS tools can help you see much of this data side-by-side, which makes resulting extrapolations more accurate.
Ranking
Real estate brokers find it useful to compare the performance of a specific location against key benchmarks such as:
- Other locations of the same retail brand
- Other locations in the same business category
- Across levels of geography (city, metro, county, state, and national)
- Trends over time
Foot traffic data is usually the basis by which these comparisons are made, and how retail brands and locations are ranked against each other.
There are many other retail decisions that a ranking tool can assist with, providing that much-needed competitive edge.
How to Test the Quality of Foot Traffic Data
Since we know that footfall data can sometimes be inaccurate depending on the source and collection methods, it’s essential to have a way to test its quality. Some useful questions to ask are:
1. How Many Data Points are Available in the Sample?
The number of data points can give you an idea of how reliable the data is. A large sample size is more likely to be accurate than a small one.
This is the primary reason mobile phone data is the most accurate. Some online GIS platforms track millions of mobile phones across the country.
2. How Well Does the Data Match Up With Other Data Sources?
If you have access to other sources of foot data, you can compare them to see how well they match up. This can help you identify any potential issues with the data.
This is also why it’s important to have mobile phone data from more than one service provider. Having access to data from three providers allows an aggregated sample to be created, which is more likely to be reflective of reality.
3. How Often is the Data Updated?
Foot traffic data changes over time, so it’s important to know how often the data is updated. This will help you know how current the data is. Most online GIS analytics tools update their data in real-time.
4. What Methods are Used to Collect the Data?
Mobile location data is by far the most accurate method used today, so make sure you’re accessing it from a tool that sources foot traffic statistics from mobile data (preferably from more than one provider).
Final Thoughts on Foot Traffic Data
Foot data is the cornerstone of retail analytics and well-informed decision making, but accessing good-quality, reliable data is not always easy.
Today’s GIS analytics tools make it infinitely easier for real estate professionals to view and analyze up-to-date and accurate footfall statistics and trends.
In a competitive industry like retail, where one wrong decision can sometimes mean success or failure, it’s important to interrogate the source of foot data.
A user-friendly analytics tool, such as AlphaMap, gives you access to some of the most accurate and reliable foot traffic data available.
Find Foot Traffic Data Using AlphaMap
If you’re using AlphaMap as your analytics tool, you can follow these simple steps:
- Select your property location on the map
- Scroll down the list on the left-hand side of the screen
- Click ‘Location Visits’
- View foot traffic data and trends
- Utilize the filters to refine your search based on time duration
Foot traffic data, sometimes called footfall data, is a measure of the number of people passing through a place over a period of time.
