Which approach is typically used by small chains for site selection?

The analog approach is commonly used by small retail chains for site selection because it allows them to leverage existing store locations as a reference point for identifying potential new sites. In this method, retailers analyze the characteristics and performance of their current stores that are in similar markets or have comparable consumer demographics. By examining what has worked well in these existing locations, small chains can make informed decisions about where to establish new stores. This approach requires less complex and resource-intensive analysis than data-driven or regression analyses, making it more accessible for smaller retailers with limited data or analytics capabilities.

While other methods like customer observation or data-driven analysis have their merits, the analog approach provides practical insights based on real-world performance, making it a preferable option for small chains looking to expand efficiently.