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White Space Analysis: How to Find New Location Opportunities?

Sometimes, growth opportunities are easy to spot through knowledge and intuition. For example, when customers are constantly requesting for a new store in an underserved area. Or when you find a great real estate opportunity right in front of you.

But sometimes, more in-depth research is required to find the areas where your business has the most growth potential, especially in highly competitive markets or when you already have several stores within your target area. This is where white space analysis comes in. White space analysis explores the gaps between your current products, services, or, in this case, locations to discover untapped opportunities.

“White space” refers to the opportunity itself – the area where a business can innovate, expand, invest, or acquire. It can be seen as an untapped potential with unexpressed customer needs and business opportunities. When you’re ready to grow your business, a white space analysis reveals your most promising chances for expansion. It’s all about filling in the gaps.

White space analysis using advanced data analytics

Different approaches to white space analysis exist, depending on your business needs and objectives. When discussing white space analysis for exploring new trade areas and implementing expansion strategies, using site selection tools based on GIS Mapping, foot traffic data, and Machine Learning can be the best option for a comprehensive market analysis.

white space analysis example
In this case, our client wanted to get insights like demographics, income, and age breakdown for each possible location.

The outcome of white space analysis, powered by advanced data analytics, is not just a rough estimate of untapped potential. It precisely identifies where this potential lies, from the number of locations a city, state, or country could support to the specific areas within these regions. This knowledge equips you with a deeper understanding of your business landscape, fostering confident decision-making and strategic planning.

How do we find new locations with high potential using advanced white space analysis? At PREDIK Data-Driven, we have developed white space analysis solutions based on Big Data and Predictive Analytics that can help you find high-potential locations in their target market more precisely.

Start visualizing everything on a map

The initial step in conducting a thorough white space analysis is understanding the overall market landscape, including details about your existing stores and competitors (In other words, having the “big picture”).

Moreover, it is essential to gather information about the sociodemographics of your target customers, as well as their mobility patterns and commuting times. These insights can offer valuable information about market behavior.

white space analysis map example

For example, you can start crossing different variables using heat mapping to spot valuable data, such as how mobility patterns affect the visitation volumes of your stores compared to your competitors.

Find locations where your potential users are

It’s important to note that any location you are not currently in can be considered a white space for your brand. However, it’s crucial to choose which opportunities to pursue strategically. Focusing on already-covered areas or examining unexplored new regions can make sense, depending on your business strategy.

You may also like to read: How to Increase Foot Traffic to Your Retail Store Using Data Analytics?

As you analyze these possibilities, focusing on trade areas and locations with the highest demand is essential. One way to identify new “sweet spots” is by analyzing demographic and behavioral data to compare how your target audiences behave in different areas.

Using our interactive visualizations, you will be able to identify trade areas that are highly concentrated with your target audience’s demographics. Additionally, we combined mobile data to track foot and vehicle traffic and target store visitation patterns within these areas.

Understand and forecast the potential of each opportunity

Having market insights to identify potential opportunities is a good start, and that’s what most white space analyses aim for. But wouldn’t it be nice to take things further and forecast your possible choices to ensure you make the best decision?

Predictive analytics uses all this data to start modeling hundreds (sometimes thousands) of possible scenarios with different locations.

Use case example

In this case, our client already had some stores in its target city, so they wanted to understand how many locations they should add to get more aggressive coverage and where to place those locations.

For this project, our machine learning model analyzed over 200 thousand scenarios to evaluate the effect of adding new locations. We measured feasibility based on parameters set by the client to 1) maximize potential reach and 2) minimize the impact on existing locations.

White analysis predictive model chart

After identifying seven thousand possible scenarios, the model detected that the risk of failing increased with each new location after opening a fourth location.

white space analysis map example

Considering that our client’s expansion potential was to open two to three new stores, the model started testing every possible scenario, considering each location’s serviceable area to avoid the risk of cannibalization.

Start making the best decisions for your expansion strategy

It is essential to conduct white space analysis to identify business growth opportunities. However, advanced tools and processes are crucial for making accurate real estate decisions, including creating site models, sales forecasts, and selecting the best locations.

You will need a robust predictive analytics solution to take your real estate decisions to the next level. Our data methodology combines GIS mapping capabilities with advanced foot traffic tools and comprehensive site selection criteria, providing the confidence to make reliable real estate decisions.

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