The Evolving Role of Foot Traffic Studies

Foot traffic has long been an important metric in determining the number of potential customers, and thereby value, of a particular real estate location. Although that data is still tracked, technology has been able to uncover valuable customer information and give greater insight into the value of a property.

The first method of tracking a building or property's foot traffic was through manual counting. The results could be unreliable and expensive, so there was a shift to turnstiles to track visitor traffic. Innovations such as pressure mats and beam sensors were used to count visitors and automatically open doors. There are now more sophisticated ways to count traffic and gain important customer data.

Turnstiles remain a popular tool, particularly in offices, to monitor how many people are in a building and their activities while there. With a shift to hybrid work, turnstiles and building sensors can show owners and tenants how their buildings are being utilized. This data may provide more important information about a building's utilization rather than occupation with the greater number of remote workers.

Computer vision is now being used to gain additional information, from tracking people's entrance and monitoring their movements within a building. Retailers can see how customers interact with certain signage or merchandise displays. This technology can help tenants and landlords optimize space usage and have greater control in areas such as staffing, layout, and scheduling.

Data from computer vision can provide greater insight on how retailers complement each other. One example is in shopping centers, where retailers can see how many customers frequent multiple stores per visit. Cameras can also be used outside the property, as external facing cameras can track where customers shop before and after visiting an establishment. Through the use of this data, retailers can test the impact of events, pop-up shops, and changes to a store's layout.

Cell phone data has provided those in real estate with additional information for property research. In addition to sharing data about how many people visit a particular location, mobile apps can give demographic information about the customer. Placing visitors into certain categories such as the time of day they shop will help uncover consumer habits and trends.

The advances in technology and the data that comes from it has given landlords and tenants valuable information they can use to their advantage in lease negotiations. While they used to rely almost exclusively on foot traffic, the new information about customer trends and demographics provide a more nuanced view in defining the actual value of a property.

Foot traffic has always been and will continue to be an important metric in determining a building's real estate value. The new demographic information gives additional insights to better define this value. Previously, only landlords had this information and could use it to their advantage when negotiating leases. That data is now available (for a price) to retailers, investors, or competitors, which can level the playing field. Either way, this new information on consumer insights is extremely valuable to all parties when determining the value of a building or property.

The full article about new innovations and insights that come through foot traffic counts can be found here.