We’ve updated this blog to reflect today’s climate in 2025.
Step #3 in our Site Selection Checklist for making smart site selection decisions is study your competition.
Too often, we see companies do a lot of homework on their customers and carefully a define trade area and launch right into an expansion plan. Understanding your customer is vital to your success as you grow. But in today’s 2025 retail landscape, understanding your customer isn’t enough–you must also know who your business is going up against (read: competitive analysis).
Where are your potential customers buying/shopping/dining?
The days of building a business and assuming the customers will come are long gone. Today’s market is competitive and fast moving.
Even if you have a fairly unique offering and you’re lucky enough to stand out for it, it’s dangerous to assume that your future customers aren’t shopping, buying or dining anywhere else and are just waiting for a business like yours to come along.
Do any of the below sound a little like your business?
- You are not sure who your competitors are or why buyers might choose them over you.
- You don’t know how to go about assessing who your competitors are and how strong they are.
- You assume that a great location and product/service mean you don’t need to worry about competition.
- You’ve done a good job with site selection, so you figure that matters most.
Reality check: everyone has competition
No matter your business, you have competition. It’s essential that you perform thorough competitive analysis to learn more. If you don’t, you risk overestimating your market potential. There might be plenty of potential buyers/customers for your business concept in a trade area and sufficient demand. But what business(es) in your space are currently meeting that demand?
Four steps for smart competitive analysis and research
What should you do to get a good handle on your customers? This four-step process is a great way to start:
Step 1: Define your customer.
SiteSeer’s team shares some valuable insights on the blog about how to get to know your customer before choosing a location, but the gist is this: you need to know who is likely to shop at your store or buy your services or products (and how they find you). Generally, the best ways to start are to:
- Run surveys to gather qualitative data (if you have other locations already).
- Develop a loyalty program (if you’re an existing business).
- Collect third-party data: demographic data, consumer mobile activity data, cross shopping data, employment data, etc.
- Study businesses like yours, including those in other areas of the country, to determine who you aspire to be like, to be different from, and where your customers might also be shopping or buying.
All of this will help you create a customer profile for your competitors. You can use that information to draw trade areas around some of their locations and gather intel on the trade area’s characteristics. Then, you can answer the question of who their best customers are and why.
Step 2: Don’t skip the field work.
In the world of retail site selection, field work should involve the following:
- Drive around the area that is close to the site you’re considering and/or do some research on Google Maps and ChatGPT. In today’s landscape, that’s a vital part of retail site selection research. Pay attention to which parking lots in the area are busy at different times of the day (e.g. during lunch hours at various restaurants). You will want to capture these elsewhere trips and drive them to your business.
- Attempt to understand trip patterns. If many of your customers are traveling down a busy street to reach your location, do they encounter you or your competitors first? If the answer is your competitors, you’ll need to give them a compelling reason to keep on driving to arrive at YOUR location. Restaurants tend to perform better when located near other restaurants, but if you are in the middle of the pack and customers from all directions need to drive by 15 other restaurants to reach yours, this will likely to hurt your performance.
- Start to build a competitor profile. In your competitor field work research, you should attempt to answer questions like:
- What businesses are most similar to yours in the area?
- What businesses are most similar to yours but in other markets?
- In the area you’re considering opening a store or location, what other retail and shopping centers are nearby?
- In the area you’re considering opening a store or location, where might your potential customers shop today?
- What are those businesses where your potential customer shops today like? How are they similar to your concept and how are they different?
- What are they doing right and what are they doing wrong (in your opinion)?
- How does their offering compare to yours?
- How does their atmosphere compare to yours?
- What are their prices compared to yours?
Step 3: Rate the competitors by strength.
The challenge with studying your competition is that you don’t always consider certain businesses your competition until you discover that they are! For example, if you re a fast-casual pizza restaurant chain, you might expect that other pizza chains are your primary competition But what about casual dining pizza or Italian restaurants? Other fast-casual restaurants? Take and bake pizza chains? Fast food?
If you are considering a trade area where you can capture a large dinner crowd, keep in mind: some diners might choose cooking at home or takeout instead. Check published sources for information about consumer dining and shopping habits and market share. That kind of data isn’t available for every industry, but while you’re ranking your competitors by strength, it is worth checking.
Of course, you should also leverage tools (like SiteSeer!) to step up your competitive analysis and store network optimization. It’s critical to benchmark your performance against other similar brands and refine forecasts based on that intel.
Step 4: Pay attention to what your competitors are planning.
You can do a whole lot of homework on a retail chain or restaurant competitor but inadvertently ignore the fact that they’re doing the same thing! There are always going to be unknowns about what your competitors are up to. You can’t predict them, but at least be aware of them.
Keep an eye on the news sections of your competitors’ websites. Watch for industry articles and press releases that might give you information about their upcoming plans. Perhaps a competitor is known for dropping their prices or advertising heavily in reaction to a new competitive opening. If you are that new competitive opening, you’ll want to be prepared.
And don’t forget to use the power of AI. You can analyze competitors using AI-powered alerts and use ChatGPT to analyze public information about how competitors select sites and summarize what’s publicly known about competitor expansion plans. Although it doesn’t access real-time location data, it’s a big time saver for pulling together information that you can research further.
Putting competitive intelligence to work
You’ve gathered a lot of competitive intelligence. Now what? Ideally, all this information will help you in a few key ways:
- You’ll know where you need to make improvements to be more competitive.
- You’ll be better able to make decisions about advertising/marketing or pricing.
- You’ll have lots of information to help you decide whether you’re zeroing in on the right location or should look elsewhere.
SiteSeer can help
It is not easy to study your competition. You have to work hard to do it and it seems like the time would be better spent studying potential customer demand.
However, if you want to create accurate sales forecasts and open high-performing stores in an ever-changing retail landscape, it is important that you study both supply (competitors) and demand (customers).
Anticipating the competitive threats to your business can mean the difference between an underperformer and a winning retail store or restaurant location.
SiteSeer powers competitive intelligence with mapping, benchmarking analytics, forecasting, and much more. You can use the platform to
- Study your competitors
- Assign strength values to their various locations based on how stores typically perform around competitor brands and types.
- Create models.
- …And much more!
We have many excellent data partners, and tools like Competitive Assessment will help you visualize the competition around your site and develop a strategy for success. Between that and our other location intelligence and customer intelligence tools, you can get a well-rounded picture of each site you want to open and make the best possible location decisions.
Contact us for a a demo today!
