If you want success with retail clients, you need to understand supply and demand conditions for the markets those retailers are interested in. This type of research is typically referred to as a retail gap analysis, and it’s easy to do with RPR Commercial.

What can a client learn from the RPR retail gap analysis report?

A report includes the Leakage/Surplus Factor, which presents a snapshot of the opportunity for each sector. This factor measures the relationship between supply and demand and ranges from +100 (total leakage) to -100 (total surplus). This factor is a result of Esri (geographic information system software) examining the dollar value of consumer expenditures made by local area residents to determine demand and then measuring the retail sales of the businesses in that same area to measure supply.

A positive value represents “leakage” of opportunity to retailers outside the area. A negative value represents a surplus of retail sales, indicating a market where customers are drawn in from outside the area.

Gaps are created when retailers are not meeting the demand of consumers based on attributes such as price or product service or quality. Another issue for a gap may be that there aren’t enough retailers in the area to meet the overall demand from the community.

Closing the gaps

As a commercial practitioner, your job is to guide clients and attract retailers to fill those gaps across the communities you serve. Just knowing where the leakages are isn’t enough.

Once you have identified areas and sectors with opportunities, you need to ascertain whether current retailers can meet the demands of potential consumers in the area.

For example, if there are discount stores currently serving clients in an area transitioning to a more affluent consumer base, are these stores sustainable? Or will the gap grow? If a retailer says it caters to young, educated adults with high disposable income, can a community maintain the longevity of this targeted client base?

The quickest way to do an assessment for these types of questions is to create the geographical boundary that holds the consumer base and run a custom Trade Area Report in RPR. This report combines economic, demographic, tapestry segments, and even the retail gap analysis providing the insights to support your clients’ decisions to lease to a potential tenant, invest in a property, or operate out of a space.

Visit narrpr.com/commercial to learn more about how RPR, a members-only benefit, can help your commercial real estate business thrive.