| Submitted by: | friscoheat |
| Date: | 11 / 10 / 2008 |
| Category: | Business and Marketing |
| Words | Pages: | 6153 | 25 |
| Views: | 193 |
Transparency In Retail Site Location Models Location Decisions: Science or Intuition?
When it comes to selecting retail locations, knowledge is power. Experience plus intuitionare the key drivers. The large majority of location decisions continue to be made on the basis of intuition and experience, not science. Why? Well, a large part of the reason is that this common sense decision process works pretty well in many situations. Good locations are good locations after all. Mom, my neighbor George, or even Aunt Sally can all tell the difference between good and bad locations --- to a point. The next step, however, that goes beyond good and bad to actually estimate a store’s performance in that location, does require special intuition and experience. This also works quite well --- to a point. The best decisions come when real estate expertise is complemented by objective, scientific knowledge that can come from demographics or other data --- and from predictive models. Because so many companies use models, or other kinds of intelligence, today to evaluate sites, it’s important to take our understanding one step further. Both intuitive predictions and model predictions tend to be used in ways that are not transparent. And, if a decision process is not transparent, it’s also not generally open to shared feedback and improvement. If you are on the receiving end of model predictions delivered as either mystery statistics or the oracle, as real estate or development personnel often are; then a lack of knowledge about how the model works may be beneficial. Usually, the normal “good” locations are not the ones people remember; it’s the dog sites. In the long run, however, everyone (especially your company) benefits when the basis for a decision is objective, understood and shared. This enables the criteria for current good locations to be extended into future “good locations”, and the problems with bad locations to be understood and avoided. Companies that have this...
Sign Up for a Free Account to View this Essay. Sign Up Now. It's Free!