As its name suggests, a unified market knowledge system is designed to aggregate all of this information. Everything a retailer might use to make a site selection decision -- all the data, market research and competitive intelligence -- is loaded onto a server, which can be accessed by anyone involved in the site selection process. Of course, servers have been around forever, and companies like Trade Area Systems and the GIS services provider ESRI have long offered technical solutions to help retailers manage their data. So why is UMKS catching on now?
Eighty thousand is a magic number for national pharmacies -- it's the bare minimum required before entering a market.
According to Mary Lou Fiala, former Chairman of the International Council of Shopping Centers, the advent of mobile technologies, especially the iPad, has been a major catalyst. "It's just changing everything," she says.
Using an iPad, individuals out in the field can not only access information, they can also update incorrect data, add notes about properties or competitor locations and use the iPad's built-in camera and GPS to upload geo-tagged images to the system. The combination of better, more accessible data allows companies to speed up the site selection process. Peter Patnaude says that analysts at SRS are completing research projects that once took days in a matter of hours.
Mapping is another key feature of UMKS. Companies have long used mashups of maps and data to help inform their decisions. One of the most enduring examples of this idea is something known as a ring study. To make a ring study, you start by dropping a pin at a point where you might like to build. Using the pin as your center, you then plot data in relation to the pin. A basic ring study, for instance, might show the number of potential customers living within five, 10 and 15 miles of a potential site. Instead of miles, drive times can be used similarly.
Ring studies are useful tools, but they're only as good as the data upon which they are built. UMKS, in turn, helps companies produce far more accurate and dynamic maps, providing a better picture of the world from the retailer's point of view.
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One thing becomes clear when you look at all the maps and data associated with a site selection: commercial real estate is all about perspective. The same factors that make an area poisonous to one retailer make it ideal for another. Discount retailers, for instance, have been among the few to aggressively expand following the recent recession. These businesses sometimes see opportunity in surprising data, such as low credit scores and high household debt rates.
In this way, it's possible to see retail locations as representations of the communities in which they are built. They're visualizations of demand, manifestations of data. In the case of Dumont, my hometown, the glut of pharmacies paints a certain kind of picture: With an annual prescription demand of 16 per capita, Dumont residents fill far more prescriptions than the average American (11.9). Is this because of an aging population, high rates of access to insurance and medical coverage or simply the fact that people in the area are ... not well? I do know this: there are no retail health clubs in Dumont.
In helping retailers manage data and map demand, UMKS has significant implications for how the business of commercial real estate is conducted. Decisions can be made faster, new markets can be revealed. The question, then, is what do these decisions and markets say about us?
Images: 1. A screenshot of the software shows a ring study; 2. Desire lines, which show where a store has the strongest pull, for Walmarts in the Las Vegas area.