Marketing

Why retail customer pattern recognition is key to retail site selection

Daniel Dutton, co-managing principal with Lee & Associates, shares insight on the value of applying customer pattern recognition to store site selection and how it proves invaluable in choosing the next retail store location.

Photo: Courtesy of Daniel Dutton

September 1, 2026 by Judy Mottl — Editor: RetailCustomerExperience.com & DigitalSignageToday.com, Connect Media

Summarize with

When talk turns to retail customer experience typically it's either about the customer service level, the point of sale process and the technologies in place to engage and interact with the consumer.

Oftentimes one of the biggest factors in retail CX isn't part of the conversation – the chosen physical store location and what it provides when it comes to the retail customer experience.

Why location decision is key to CX

In fact, the retail CX journey starts with store site selection and location design. Think cramped aisles, small try-on rooms, the inability to use digital displays or place mirrors in strategic locations. Think of poor or weak Wi-Fi and its impact on the retail shopper who shops on the device while in the store.

On the retailer business side a poor location decision can be a multi-million dollar loss. Foot traffic, neighboring stores in the shopping center, parking – they all factor in driving business, driving shoppers into a store.

The need for real estate expertise

Choosing the best location requires expert real estate brokers and agencies that know everything location wise.

At Lee & Associates, when representing retail property owner or brand, the goal is to identify the transaction that makes the most sense when it comes to the specific customer's daily, weekly or quarterly route.

An example: When locating a supermarket, which is a consumer weekly routine, the goal is finding the shopping center that allows for parking and offers other retail amenities a consumer may patronize such as a cleaners or hardware store. For a Starbucks the location strategy is to grab consumers' attention while at the train station or a gym.

The value of customer pattern recognition

To help retailers and brands make the most successful site location decision Retail Customer Experience reached out to Daniel Dutton, co-managing principal with Lee & Associates, a full-service commercial real estate firm specializing in local market expertise.

Dutton joined Lee & Associates in February 2022 as co-managing principal and founding member of the Omaha office. He is a veteran of the real estate industry having been licensed in Nebraska since 2003 and Iowa since 2007. He has worked extensively in the retail real estate working with tenants/buyers & landlords/sellers throughout Nebraska, Iowa, Kansas, Missouri, Oklahoma, the Dakotas and Texas.

Dutton offered insight, via an email interview, on the value of applying customer pattern recognition when choosing a retail store location.

Q: Why is projecting retail customer 'transaction patterns' a prime consideration for site selection and can you provide an example or two?

Dutton: Humans by nature are creatures of habit. We develop routines in our daily lives, and it's the job of retail marketers and real estate experts to find entry points into those cycles.

Transaction patterns mean developing an understanding of not only when a consumer goes to lunch but what they most likely will buy to eat and where they will look to shop.

Most patterns we project for clients fall into daily, weekly or quarterly transaction runs. A simple way to look at this is to consider strategy for leasing up a grocery-anchored shopping center: we use tenant, demographic and economic data to identify incoming retailers that serve consumers weekly and at similar price points, who should be most successful at this location — hairdressers, quick service restaurants, laundromats etc.

We can inverse the analysis when handling site selection for occupiers by identifying available real estate at locations with nearby tenants serving similar transaction patterns.

Taking the concept a little further, we know based on transaction data that soft good retailers are often most successful when in proximity to other apparel stores. This makes sense when considering if you want to go out and shop for clothes without a specific item in mind, you are more likely to go to a destination with a few different stores in close proximity to compare inventory. We find people will shop and eat but won't eat and shop, meaning retailers are a good co-tenant for restaurants but restaurants are not necessarily a good co-tenant for retailers.

Q: How much value do retailers place on nearby businesses when assessing a potential location?

Dutton: I recently did a poll on my LinkedIn asking retailers, restauranters and brokers what is the number one factor when choosing your next location? Co-tenants won in a landslide. It's a priority widely understood by retail real estate professionals and sophisticated retailers often have thoughts on this built into their retail strategy before beginning work with us.

Q: Where does the 'competition' location play in these considerations? Years ago, there were rules with some brands that franchise locations shouldn't be within X miles of another franchise location. Is that still in play?

Dutton: Some retailers want exclusivity to a sub-market but it varies business to business. As mentioned before, some soft retailers often benefit with competition nearby because it draws consumers to a location to compare inventory and ultimately purchase in person rather than shop online. On the other hand, two burger restaurants at the same corner may cannibalize the market. You'd still have to game out other factors like parking, population and physical traffic patterns to determine how much of a challenge this competition could be.

Q: Are there any big current design trends among brands/retailers impacting site selection? Do they want more space for inventory these days, or a pickup aspect in the parking lot?

Dutton: Obviously a big trend is dedicated parking and store design to support online order pickup and returns. Retailers are increasingly becoming part warehousing and distribution center. Space needs to be identified that can support this intake without losing elements of the physical brand identity and experience. Considering this omnichannel marketing into retail customer experience is key to maximizing the opportunity to sell to customers coming back to your space for returns.

Q: What are the top one or two missteps you've seen retailers/brands make in location decisions?

Dutton: Making site selection decisions without a large enough sample size of data and analysis on traffic patterns. Retailers sometimes also prioritize visibility and what is new over where your customer is and what is proven to work. For example, the shiny new stand-alone development on the outskirts of town may not perform as strongly for your business as the second generation space at a popular local corner with co-tenants serving similar transaction runs.

Real Estate Marketing

About Judy Mottl

Judy Mottl is the editor of RetailCustomerExperience.com and DigitalSignageToday.com at Connect Media. She is an award-winning editor, reporter and blogger who has worked for top media for nearly four decades, including AOL, InformationWeek and Internet News, as well as for leading technology providers including HP. She’s written everything from breaking news to in-depth industry trends and reported on technology long before the internet arrived, including the debut of the first smartphone. When she's not sharing insights on digital signage deployments and trends in retail customer experience she's on the beach or watching the latest live murder trial.

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