Retail is all about relevance: right product, right place, right time, and right price. Of all these factors, it is location which is most fundamental to the success of a bricks and mortar retail business and the use of location intelligence to drive decision making can be the difference between retail success and failure.
Product mixes can be adjusted and evolved, price-value equations can be revised through promotional strategies and inventory can be optimised to reduce out-of-stocks, wastage and markdowns. However, if you locate your business in the wrong place, relocate for the wrong reasons, or miss an opportunity to capitalise on a trending concentration of your target demographic as a result of housing development and infrastructure changes, then you are running a real risk of compromising your retail business future.
This is especially important as new stores represent a significant investment for any organisation. Bunnings Warehouse for example, announced a 3 year investment of $1.5bn in 78 new stores across New Zealand and Australia in 2012. Such an investment carries a huge risk and there are a number of location based decisions that need to be considered.
So what are some of the key questions that need to be answered in deciding on retail network changes?
- Am I correctly analysing my trade areas?
- What infrastructure issues have to be considered in the decision-making process?
- How can potentially profitable locations and growing areas be identified for opening new stores?
- How can we optimise our network and avoid cannibalisation?
Making successful decisions relies on having good data. Sources of data are exploding and the complexity increases exponentially. The use of technology is now mandatory to interpret such large amounts of data. The use of Location Intelligence enables a business to significantly reduce overall risks associated with making location decisions. Bringing together all relevant data on customers and markets so it can be analysed collectively takes the guess work out of making a right location decision.To understand how using location intelligence is vital in answering the key questions in retail decision making and retail site analysis download the white paper: New Location Perspective in Retail: In the Zone