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Four ways footfall data can power investment strategy

18 April 2018 by Clara Molin

LDC’s SmartStreetSensor footfall tracking network now comprises over 1,000 allocated devices, ranging from Aberdeen down to Plymouth and a huge range of locations in between. As our network continues to grow in size, it also grows in value each week as more sensors age and start to yield comparable year-on-year insights. With many in the retail and investment market acknowledging a challenging environment, the need to use data as evidence to intelligently discover where opportunities lie has become more critical than ever. LDC has been tracking the retail and leisure market for over 10 years now, and through our powerful combination of field and desk research, we have built a rich database of historical trend information which can help us to predict where this market will go next. However, we believe that the next frontier in understanding how our retail locations are used is being able to track footfall, not just coming into stores and assets, but also the pavement opportunity outside.

With this in mind, I have collated a list of four ways we are working with some of our investment, private equity and landlord clients, helping them to support and drive forwards their investment activity in the market.

1. Understand investment potential

Investment banks, Private Equity firms and landlords can use footfall data to add another layer of insight to investment decisions when looking at the potential of a location. In this way, we can help these organisations to gauge how healthy specific streets are tracking footfall density at different times of the day and understand long-term potential by using historical footfall data to extrapolate future trends. By using long-term footfall data, you can evaluate of the trajectory of that location. For example - is footfall in this location increasing, decreasing or remaining stable? What impact will this have on the health or vitality of a location? If I make changes to this asset or portfolio of stores, will there be enough footfall to support long-term profitability long-term?

Organisations can also use footfall data to benchmark an existing portfolio to understand which perform better than others in terms of footfall. This supports prioritisation of expenditure and can support investment planning. 

Screen Shot 2018-04-18 at 11.26.22Screenshot from LDC’s footfall heatmap platform.(Source: LDC).

2. Build and support and assess investment cases

Companies looking to make investments can predict the likely impact on footfall by using benchmark or example locations to understand what could be replicated in another location through activity. This can include the refurbishment of a shopping centre or the building of a new asset. You can also use footfall data to either create or support a business case when making recommendations to an investment board or committee by showcasing current and likely footfall levels around the area. Alternatively, this information can be used to assess the risk or strength of a proposed investment case when presented to an investment board or committee.

3. Measure the impact of investment

After major investments have been completed, footfall data can be used by these organisations to provide a key metric to quantify the impact of capital expenditure. Understand and evidence uplifts in footfall due to investment projects, the data from which can be used to support future investments and predict likely returns. Footfall data can be used alongside other data sources to fully understand the return on investment in a comparable and data-driven way.

4. Predict trends around assets

We can also use the data to benchmark across sites and understand the fluctuations in footfall trends in line with other assets in a variety of locations. Using footfall data in conjunction with other contextual data can enable agents to justify rental costs and help them to understand whether rates should be increasing in line with increased footfall opportunity. Similar to the above points, historical footfall data can be used to predict future trends and levels, supporting assets at key trading seasons, such as Christmas or during sales periods.

LDC footfall data is available in a variety of formats; available through our location insight platform LDO or available as a raw data file, which can be easily integrated with other internal and external data sets to provide a comprehensive picture.

For more information on any part of our footfall capabilities, download our footfall product sheet by following this link or contact us on sales@localdatacompany.com

 

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