SCW: How long has desktop mapping technology existed?
Mapping technology started out in government over 20 years ago. It was used primarily to conduct various analyses on the location of utility lines and roads. It became apparent that this was something that also could be used in other industries. Today, telecommunications is probably one of the biggest industries to use mapping technology, but real estate is another important industry. It's only been in the past five years that it has really developed in the real estate field.
SCW: Is desktop mapping used primarily by retail clients?
Retail really is the most natural use of this kind of analysis. It is used to a lesser extent in office, industrial and land. There was all this data that existed out there, demographic data and road data, and people wanted to do demographic analysis in order to make sense of retail. That's why retail has probably been the one that has embraced it the most.
SCW: How has the technology advanced in terms of its capabilities?
In the beginning, what mapping technology did was take a flat database and apply it to items that go onto a map. So every road on the map was linked to a database record somewhere. Since then it has continued to evolve. Today, we're seeing more exciting developments, such as the ability to link other data to map objects, and also use various underlays. For example, digital aerial photography and digital satellite photography is something that will help the industry to blossom and grow.
SCW: What types of desktop mapping tools are available?
There are really only a handful of companies that provide most of the GIS (Geographic Information Systems) engines, the largest being MapInfo and ESRI. (Troy, NY-based MapInfo Corp. and Redlands, Calif.-based ESRI.) There are some other smaller companies that have engines that power these GIS mapping systems.
Companies like Microsoft also have dabbled in it. Obviously, you can go out and get something like Rand McNally's street program that allows you to do some point-to-point mapping. For the most part they are really not designed for the commercial real estate market. However, they do have some very interesting features.
SCW: Is desktop mapping software one-size-fits-all, or do the options vary?
Almost everything we do is customized. That's why a lot of mainstream players have not, and will not, ever get into it because you have to input data that makes sense for a particular client. One client may be interested in a lot of data that deals with children. Another client may have no interest in age information, but it may be interested in income information. Almost no two installations are the same. That's why it's difficult to shrink-wrap it, and provide it as a product sold at CompUSA or similar stores.
SCW: What are some of the advantages of desktop mapping?
Probably the biggest advantage is the time savings, and the technology's ability to help you set your priorities. People are able to save a great deal of time by going into a market and getting help zeroing in on specific areas. I was a real estate broker before coming into this business and starting the firm. It was common practice for us to drive retail representatives all around the city to show them various sites. If I had the technology then that exists today, we could have better utilized the time by focusing on the areas that made more sense rather than just driving all over town.
SCW: How is the retail industry using desktop mapping?
Early on, the technology was used primarily as a means to replace the task of placing dots on a map and for doing competition maps. The competition maps are still a very important part of mapping technology today. But in addition to that, we can now analyze the site by looking at the underlying demographics and actually highlighting the types of people who live within certain areas. That capability has extended beyond the typical one-, three- and five-mile radii to where people are defining their own trade areas.
Drive time also has become more important in the past couple of years. There are some neat computations that allow people to estimate how far people can travel without getting in their car. You can get a benchmark as to how far the real trade area is based on different barriers like road systems, mountain ranges, rivers and lakes. That kind of analysis helps retailers do a better job of analyzing sites before they make the huge investment of going into an area.
SCW: Do you have any success stories to share?
One involves a retailer that was considering a potentially favorable site. But after the real estate people went out and looked at the site, they didn't feel good about it. They ran it through the GIS system, which came back showing that the site seemed to have all the right ingredients. So the real estate people walked the site again. Armed with new data, they said, "Maybe we did miss some things here." The retailer eventually opened a store at that site, and it was successful.
SCW: What, if any, limitations exist on mapping software?
By far, the biggest limitation is good, accurate data. Not only is it difficult to get accurate initial data, but keeping it up to date also is probably the biggest limitation of GIS systems. Retailers are constantly building new stores, closing old stores or relocating stores.
Often, in fast-growing areas the demographic data doesn't keep pace with what's really happening in the market. I've encountered markets where you would never site a store at a particular location based on the standard demographic report. But when you actually observe all the new development firsthand, you reach a different conclusion: "Yes, this is going to be an area that makes sense."
Conversely, I've seen an area where they've developed 2 million sq. ft. of shopping space. But if you had looked at a demographic report two years ago, you would have said, "There aren't enough cows or anything to support this location."
One thing that is really important to remember about this entire industry is that the software is just a tool. It is not going to take the place of good local market knowledge and intelligence. It is just there to help validate your feelings, weed out locations that don't make sense, and help you focus on the areas that offer the highest and best return. There is nothing like being at ground zero, being at the site, being able to look at it, drive the neighborhoods and truly understand what the neighborhoods are.
SCW: How expensive is desktop mapping software?
It really depends on the data. You'll see packages from $1,500 up to as high as $100,000 or more. Typical packages range between $2,000 and $10,000.
SCW: What kind of platform does it require?
The vast majority of anything anymore is Windows-based: Windows '95, Windows '98 or Windows NT. Because many of the files are relatively large, it does take quite a bit of disk space. So in order to get some of the systems to accomplish what you want, sometimes you need a beefed-up system.
SCW: Do you offer training for your customers?
We do for those that want to step up what they're doing. Almost no one needs training on the basic elements, such as being able to produce a nice-looking demographic map. Those tasks are very straightforward. Part of the reason we offer training is to whet their creative juices and get them excited about some of the functions that help them conduct better site analysis.
SCW: Where is the industry headed?
As far as software goes, things will continually be added to make it better. But the real validation of the system will come with better data, which opens up opportunities for niche firms to provide more accurate information. And it's not just data, it's photographs and other methods of presenting a site.
SCW: What do your clients look for in the way of desktop mapping?
Being able to produce a demographic map, competition map, various reports, drive-time analysis - those are probably the most requested types of information. Beyond that, there are some subtle things we do to take desktop mapping to the next level, such as creating customized legends, doing more with the analysis itself, making maps that you can look at and say, "Wow, that's really a cool-looking map."
Clients also are interested in developing their own internal databases. Retailers want to be able to see where all of their stores are, and where all of their competitors' stores are. We have a number of retailers who are going out and taking photographs. This software allows you to link your digital images - photographs or video - into the objects on your map. If you're looking at a whole series of locations, it's a great way to be able to index them. You can click on the site and instantly have the visual image.
SCW: What advice do you have for potential users when it comes to selecting the best system for their needs?
Do your homework. If you have clear ideas of what you want to do with the software, make sure the software is going to fulfill your needs. Often that means getting a hands-on demonstration to get an idea of what the software can do.