Retail White Space Analysis Cheat Sheet: 5 Real-World Examples

The retail industry is no stranger to change. In the last five years alone, retailers large and small have seen many market shifts, and they’ve had to adapt quickly (or risk getting left behind). From the disruptions brought on by the COVID-19 pandemic to the surprising surge in consumer confidence and spending to a reshaped supply chain, the retail industry is in a new phase of innovation.

Today, consumers expect retailers to deliver a seamless shopping experience. Omnichannel is the baseline, and shoppers want the ability to research purchases online, check real-time inventory, buy online, and pickup curbside.

Challenges and Opportunities

For retail chains, this new reality presents challenges in an ever-shifting environment. However, there are many big opportunities to capitalize on as well, such as:

• Opening locations in markets with strong e-commerce business but no (or limited) physical presence
• Growing into markets that have seen population growth/housing development and now have increased demand for retail and other services
• Right-sizing a store network based on customer behavior and changing demand
• Expanding into markets with retail gaps due to store closures/bankruptcies

If your retail chain is looking to grow beyond your current footprint, it’s important that you use reliable data and retail analytics to decide where to go next. There’s much more to this than engaging a commercial real estate broker to find available space in a market where you already operate or one that you have a hunch you’ll be successful in. You must identify where unmet demand for your retail offering exists. And that requires a data-driven process.

White Space Analysis Helps You Assess the Big Picture

When we say you need a data-driven process to determine where to open your next store or location, you might think, “Of course! You mean site selection.” Site selection is essential, but there’s actually a step before site selection that’s just as vital: white space analysis.

White space analysis involves narrowing a retail chain’s focus to markets with the most potential for success. It helps you identify gaps in your market coverage OR possible new markets where your retail concept is likely to thrive. By zeroing in on geographic markets with strong viability and avoiding those that don’t have sufficient demand for your offering (or enough of your target customers), you’ll avoid costly location mistakes and maximize your potential.

Another way to think about retail white space analysis is a big picture strategy to mapping out (literally) your retail chain’s expansion blueprint.

Using a range of data sources—customer demographics, market demand, competitor presence, existing store performance (if applicable), etc.—a white space analysis tool like SiteSeer helps you answer questions like:

• Are there markets with high growth we have overlooked and should be considered?
• What cities are underserved?
• Where can we expand without cannibalizing our existing stores?

This is different than site selection, which is the process of choosing the best specific property/parcel to open a store/restaurant/other service business. Site selection involves:

• Analyzing a site to assess whether it meets a retailer’s criteria, such as traffic counts, distance to nearby competitors, visibility and access, co-tenancy with certain business types, etc.
• Analyzing whether a site has enough of the retail chain’s target customer in the trade area, which requires analyzing demographic, behavioral, workplace, and other household data.

5 Examples of How to Use White Space Analysis in Retail Expansion

Even if this process makes sense in concept, it’s useful to have tangible examples of how your team could utilize a tool like White Space by SiteSeer. Here are several scenarios where retail and restaurant chains (and other multi-site service businesses) can use our White Space tool to grow smarter:

1. To evaluate a new market

Let’s assume you’re a regional coffee chain with five small stores in the Boise market, and you’re ready to try your luck in another mid-sized metropolitan area that has also experienced rapid growth. You settle on Colorado Springs, Colorado, which you’ve heard is “hot” and perfect for a business like yours. SiteSeer’s White Space tool can help you:

• Assess market fit and establish whether the residents/consumers in a market match your ideal customer profile.
• Identify opportunity zones where there is strong demand for coffee/the coffeehouse experience and low/manageable competition.
• Predict store performance to gauge whether a new store here would perform similarly to your overall store average (or outperform/underperform).

2. To find gaps in a market where you’re already operating and thriving

White Space helps you identify where you could be missing out in markets where you’ve already had strong performance. Say you’re a family-owned carwash/auto spa chain with 10 locations in Raleigh, North Carolina. You know there are areas in the metro area that are ripe with opportunity…but where? Our White Space tool will help you figure out:

• Where the customer-dense neighborhoods are.
• Which trade areas are most similar to your best-performing car wash locations and also don’t yet have other competitor car washes within them.
• Where in Raleigh you will find the closest match to your target demographic.

3. To develop a build-out plan for a market

If you’re a pizza and pasta restaurant with 15 locations in Minneapolis, Minnesota, that wants to franchise your concept, you must expand strategically—not just as aggressively and quickly as possible. White Space by SiteSeer lets you model and compare different expansion scenarios (e.g., a 25-store market vs. a 35-store market) to figure out the optimal network density based on factors like:

• Customer demand
• Competitor saturation
• Drive times/overlap/cannibalization impact

To develop a build-out plan for a market.

4. To decide whether to relocate an existing store

What about a situation where a retail chain has one underperforming location that is dragging down overall profitability? Example: a boutique clothing store with four locations that seeks to grow to eight…but there’s one problem. The ABC City store is in the red, despite you choosing what you expected to be a strong location. Our White Space analysis tool can help you get to the bottom of things and use store performance history to:

• Compare your weakest and highest-performing locations’ trade areas.
• Find better areas in the same market that have stronger demand for a clothing retailer like yours and is within ideal proximity to complementary businesses (and far enough away from competitors).
• Plan a relocation of the underperforming store to a different area that matches your ideal customer profile for spending power, behavior, etc.

5. To prioritize markets

You’re dreaming big as a small-but-growing chain of walk-in healthcare clinics in the Austin, Texas, market, and you’ve got your sights set on three other metro areas in Texas. White Space will help you do this the right way by scoring and ranking markets under consideration based on factors like:

• Demographic alignment with your core customer
• Competitive landscape
• Availability of real estate for leasing (or building)

Grow Smarter with SiteSeer

SiteSeer’s powerful platform has both a White Space tool and a suite of site selection features to support retail chains as they determine where to grow and where to open stores. Together, these steps help you focus on markets that have promising outlooks and choose sites that fit your parameters for success.

Avoid guesswork and grow with confidence. Want to see how White Space works—and how it enhances your site selection process? Contact us for a demo of the SiteSeer platform today!