Where Should We Grow Next? Using Data to Drive Decisions

Many retailers today are faced with the daunting task of international store expansion, but for many looking to grow, the notion of expansion outside of the U.S. is a complex challenge.  How are they to know, with confidence, which country they should expand into next?

To appropriately develop and expand across a global platform of new/existing stores and for the retailer to be successful in the international theatre, one key factor is to mitigate risk. To mitigate risk the retailer must have a clear market understanding. They must understand not only who the customer is today, but how many customers exist in the marketplace, their share of wallet (how much disposable income they have to spend on non-essentials) and how many potential locations can realistically be opened.

Following a Global Retail Road Map is critical to measuring true market potential of a given country. First, an International Market Assessment is conducted at the macro, “30,000 foot level” which would provide a retailer with a sound understanding of the countrywide store network opportunity. As the retailer moves down the road to market understanding, acquiring country wide analytics allows the retailer to sequence market opportunities at a more granular level of analysis. (Mapping Books of the country are based on key market metrics such as purchasing power and business demand generators.) With limited capital investment available in any given year, tying market expectation (City Store Network Expansion) with capital investment provides the key to developing the most optimal plan.

City Skyline Studies captures market metrics at a level which “opens up” a city market understanding which would provide them with two key cornerstones: Store Capacity (how many locations the market can sustain), and Market Capacity (how many look-a-like customers exist). Quantifying the Store Capacity and Market Capacity across multiple countries/markets is critical to establishing a strategic plan of sequence; what is the preferred order of market entry. Identification of desirable trade areas across the city allows the retailer to dive down into individual store markets to gain a measure of true potential. Market Maker is a combination of the customer potential, with competition, purchase power and immediate business demand generators.

It is also very important to go beyond the measurement of store and market capacity to capture and understand the less “tangible” but equally important factors such as infrastructure, invisible or “un-bankable” markets and crime index.  Working at the individual store level, building local knowledge of individual trade areas and their opportunity is a critical last step before “boots are put on the ground.”

Developing and following a global road map serves as a market analytics compass which guides retailers on the journey to retail success.  Think Macro but plan Micro!

4CGeoWorks understands the unique challenges and pressure you face as you consider your operational effectiveness and future growth. We also understand how to develop strategies and tactics to get you where you are going. That’s why we have developed a comprehensive platform of consultative offerings to meet your company’s needs, based on technology from cutting-edge Esri software like Business Analyst and ArcGIS Online.

Our Market Analytics Platform Solutions (MAPS™) allows you to select one or several of our proven and time-tested modules. MAPS™ provides your company with a roadmap for success. It is structured to help you translate available data and interpret information into business value, as well as real, actionable recommendations. 

This post was originally contributed by former 4CGeoWorks Managing Consultant of Global Services, George Anderson

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