In today's climate, it's hard to find a firm that can brag about growing. But SRC, an Orange, Calif.-based provider of geographic business intelligence, says that in 2008 it posted a 20 percent year-over-year increase in total revenue. Part of this phenomenon might be due to the fact that in a downturn as severe as this one, successful site selection gains in importance.
"We've seen more activity from [retailers] in this downturn than we did in the upturn," says Dean Stoecker, SRC's president and CEO. "When business is bad, they need business intelligence tools more, so we've actually seen a big uptick in our business."
Part of it might be due to SRC's unique business model—the firm offers many of its customers a free-of-charge demographic intelligence service in the hope that they will eventually pay for its more sophisticated products. freedemographics.com, dubbed by SRC as software-as-a service solution, allows visitors to the site to use demographic data from the 2000 Census to perform free site analysis.
"Many of our customers started with freedemographics.com," Stoecker says. "If they don't have budgets [for site selection services], we provide value. And there is a logical migration to lots of other software capabilities that we offer as a company."
The site offers information on population growth patterns, average household incomes, the ratio of females to males in a given trade area and similar data, complete with maps and graphs. Stoecker cautions the information might be a bit old if a client plans a project in a market that's been hard hit by the downturn like Florida, but for many areas of the country it can still be very helpful, he notes.
This month, the firm announced improvements to the site that will help customers navigate and interact with it with increased ease. Today, the site functions more like an online application than a traditional Web site, cutting down the amount of time users need to perform basic functions. The end result is that customers can often figure out where to put a new store in less than 10 minutes, according to Stoecker.
One of SRC's most popular paid services currently is DemographicsNow.com. Retailers and developers have less need for straight site selection services because there is little expansion or new construction occurring, notes Stoecker. But retailers still need help with effective store space management and marketing campaigns and landlords want to shorten the time it takes to get new tenants into vacant spaces. That's where the DemographicsNow subscription service comes in. The service, which the firm has offered for the past 10 years, can compare current demographic information, which is updated on a quarterly basis, to the information a retailer has collected about its best, most frequent customers using surveys, mailing lists and loyalty cards. The program can then identify where those customers are located, either to aid with new store selection or help create an especially effective marketing campaign.
For example, one of SRC's clients is a franchise retailer that offers healthcare services. The retailer uses DemographicsNow to perform an analysis of its best stores to create profiles of primary, secondary and tertiary customers based on how frequently they use the store's services. It has recently applied these findings to create a mailing list for its worst-performing stores that would attract the best potential customers and help improve the stores' profitability.
And when it comes to retail developers, DemographicsNow can help them perform what Stoecker describes as void analysis—identifying retailers that could benefit from a new location in their center, but don't have a store in the immediate trade area. The analysis is often used to fill existing vacancies and can be presented to the retailer to prove that opening a new store would be good idea. "Many of the large mall management firms, like Jones Lang LaSalle and Weingarten Realty, do that religiously, almost daily," Stoecker notes.
Jones Lang LaSalle and Weingarten are among SRC's current clients on the real estate development side. Its retailer clients today include Best Buy, CVS, Publix Supermarkets, Yum Brands and Arby's, among others. The price for using DemographicsNow varies, however—some clients pay as little as $1,295 per year. But those who would like to use various add-on options, such as chain store data, can spend up to $15,000 on the service.