High AADT but Low Sales? How to avoid mistakes in retail site selection

    Successful site selection is fundamentally about ROI, which in turn, depends on sales, customer count, and daily visits.

    Many real estate specialists use Annual Average Daily Traffic (AADT) as a key metric to predict visitor counts and measure future success of a new location. However, relying solely on AADT can result in common pitfalls.

    Have you ever encountered significantly different sales volumes with comparatively similar AADT numbers? This happens frequently, and the issue may be not only due to the level of service or product availability but also to the specifics of traffic behavior.

    A High AADT Does Not Guarantee a High Customer Count

    It is important to evaluate whether the traffic flow generates enough visitors. For this purpose Ticon recommends ordering a comprehensive analysis of AADT, traffic behavior, and traffic fluctuation together with relevant demographic patterns.

    1. How to Translate Traffic Behavior into Visit Numbers

    Let's examine traffic behavior in more detail. It can be characterized by speed distribution within the traffic flow, meaning what percentage of cars are traveling at what speeds. What does this tell us?

    First, the willingness, readiness, and ability of a driver to stop are influenced by numerous external factors analyzed by Ticon. These factors, among others, include acceleration, lane distribution, terrain and roadway features, weather, traffic lights, road signs, and more..

    For example, at low speeds, it is much easier to maneuver and drive into a parking lot. Conversely, when you see that most drivers in the traffic flow are moving at the same high speed, it gives us reason to characterize drivers behavior as "transit", meaning they are passing through without stopping by and spending their time on shopping.

    2. Traffic Fluctuations Shaping Visitor Numbers

    Additionally, it is important to pay attention to seasonal traffic fluctuation (Fig.1). It is not only the number of passing vehicles but also the visitor rate that can vary from month to month. Often, when choosing a site, specialists consider this but use only a limited range of information, such as weather fluctuations, holiday seasons, etc.

    traffic report
    Fig.1 Annual traffic fluctuations for two sites in the same state and region, located 30 miles apart

    The same is true for intraday fluctuation (Fig.2). There is substantial evidence indicating that not only visitor rates but also the average check amount varies between AM and PM peaks, even with a similar number of passing vehicles.

    traffic report
    Fig.2 Intraday traffic fluctuations for two sites in the same state and region, located 30 miles apart

    In reality, temporal traffic fluctuations can either cut or add a significant portion of revenue. As we have noticed, these fluctuations are often quite surprising. They vary in timing, duration, intraweek and intraday peaks - and even in terms of primary and secondary streets.

    In summary, successful site selection is always a comprehensive process even if we touch “only” one aspect – traffic. Contact us at info@ticon.co for more details.


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