Client situation
A U.S. based retailer operates more than 2,000 stores in the Americas and Europe. Kalibrate has assisted them in the past to develop an optimized real estate portfolio in the US, by prioritizing store redeployment opportunities and identifying store expansion opportunities. The retailer needs assistance in developing an expansion plan for their European operations.
They asked:
- What factors drive successful store performance in Europe? How does that differ by country?
- What types of locations are optimal for expansion – enclosed shopping centers? High streets? Outlet malls?
- How many stores can be supported in each country, and where should they optimally be deployed?
The Kalibrate approach
Kalibrate leveraged massive mobile data (enhanced cell phone location data) to determine how far shoppers are travelling to patronize individual stores and to define a trade area for each store. Kalibrate also licensed demographic data, psychographic data, and competitive location data to quantify the factors that impact store performance. Kalibrate then developed a sales forecasting model to forecast sales for each store, including the impact of each of the aforementioned factors and location type on store sales performance.
Kalibrate was asked to conduct a supportable store analysis, or whitespace analysis, for each country. Kalibrate identified over 7,000 potential store deployment opportunities in each country, and defined a trade area and generated a sales forecast for each. Kalibrate then identified those opportunities that concurrently exceeded the minimum sales level specified by the retailer for a profitable store, and did not exert an undue cannibalization, or sales transfer, impact on existing locations. Kalibrate developed a recommended store deployment strategy for each country.
The output
The initial analysis was conducted in two countries – one with a mature store deployment, and one that the retailer had recently entered. Kalibrate conducted the analysis and presented the results to the European operations and real estate teams.
The retailer is using the results to reposition and expand their location strategies in both countries and is in discussions with Kalibrate to expand this analysis elsewhere in Europe.
