By Hannah Davis, Development Manager, City of Florence
Our historic Main Streets aren’t simply gathering places for special events — they are vital centers of commerce, culture and quality of life for our communities. But successful downtown revitalization doesn’t happen by chance. It requires vision, strategy and data, specifically understanding local market conditions. One of the most powerful tools small towns and cities can use to help guide transformation efforts is a market analysis. This research-based tool becomes a road map for economic vitality efforts, helping local leaders understand existing customers, the types of businesses a district could support, and how to position downtown as a thriving business ecosystem.
A market analysis is a comprehensive study that examines a community’s existing economic, demographic, psychographic and retail conditions. In the context of Main Street revitalization, this tool helps identify the types of businesses that are in demand, how much consumers are spending, and where there might be opportunities for growth. Rather than relying solely on assumptions or qualitative data from community surveys, a market analysis provides hard data and actionable insights to inform decisions about business recruitment, property development and investment.
For Main Street programs, local governments and economic developers, a market analysis is more than just purchased research to sit on a shelf. It’s a decision-making tool that can help communities identify strategies that target the right-fit businesses to fill retail or service gaps and vacant buildings, support entrepreneurs with real data on customer segments, strengthen grant applications with evidence of need, align district stakeholders around a shared understanding of local conditions, and make smart investments in infrastructure and incentives.
A well-executed market analysis typically includes a few key components:
- Demographic and psychographic data – Who lives, works and shops in the defined area already? What are their lifestyles and spending habits?
- Trade area definition – Where do customers come from and who makes up the consumer base?
- Consumer spending patterns – Where does money spent go? Are residents spending outside of the community to meet their needs? Does the community have dispensable income?
- Community input – Feedback from the community through surveys is helpful for validating hard data and identifying any niche opportunities for small businesses.
- Real estate and existing business assessment – Beyond a building inventory, what spaces are currently available and what is their suitability for new uses? What businesses already exist and what products or services do they offer?
- Retail gap analysis – What types of businesses are in demand, but not currently available? What is the supportable square footage for missing business types?
Together, these components provide a comprehensive scope of a downtown’s current market and its future potential.
Recently, the Downtown Florence Main Street Program engaged a firm to study hard-to-fill spaces in our Downtown Redevelopment District and deliver a market analysis and sample pro formas to share with developer teams and real estate partners. This process included third-party data analysis, a community tour, property tours and a community visioning session leading to the creation of a Real Estate Development Strategy, which prioritizes properties for redevelopment and identifies targets of opportunity for future uses. Since starting the process, one of the studied properties has been slated for redevelopment.
In Dillon, Main Street South Carolina recently held a quarterly training focused on identifying Transformation Strategies, utilizing market data and community surveys as inputs for economic strategy development. Attendees at the training explored market data shared about Dillon, examined community survey results deployed prior to the meeting, and participated in community engagement exercises with Dillon’s downtown stakeholders and users. They explored the district’s assets, and practiced utilizing market research to develop sample strategies to move Downtown Dillon’s revitalization efforts forward. This training, a first-time offering from Main Street SC, provided more than 40 attendees with the skills needed to deploy these tools in their own communities.
Market analysis is more than a report. It’s a strategic tool that can help unlock the full potential of Main Street efforts. Whether you’re working in a small rural town like Dillon, or a growing regional hub like Florence, understanding local market conditions is a meaningful step in comprehensive downtown revitalization. Communities that invest in this process are better equipped to attract businesses, support local entrepreneurs, and create vibrant places for all.
Main Street South Carolina is a technical assistance program for communities seeking to revitalize their historic downtown commercial districts. Main Street SC offers several community membership levels ranging in cost and requirements. Downtown Florence is an Accredited-level Main Street Community, meeting the accreditation standards of the National Main Street Center.