Cannibalization Analysis -

Cannibalization Analysis

The presence of nearby establishments of the same brand can have negative effects on the results of the store. In addition, the existence of other sales channels, such as e-commerce, can also reduce sales figures. Analyse all these effects to avoid losing losses due to omnichannel cannibalization.

General Description of this use case

Companies must be particularly careful when considering a strategy to expand their establishments or when opening new sales channels in order to avoid the undesirable effects of cannibalization. Therefore, the main challenge that they face, is to know how to correctly place the physical points of sale and define their product catalogues, so that they do not compete with each other.

In these cases, when we talk about cannibalization, we are traditionally referring to a fairly common phenomenon whereby the sales of one establishment drop due to the influence of another nearby with the same brand. Therefore, the same business is competing against itself.

Today, the concept of cannibalization must be extended to the dominant omnichannel scenario. Not only is it possible for physical stores to cannibalize each other, but there are also chances that, for instance, an online store will subtract customers from a local store, or just the opposite.

Similarly, it is essential that the location and offer of each establishment does not conflict with other sales channels, such as e-commerce, preventing the physical store from losing revenue to the digital store or vice versa.

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Tell us the particularities and needs your project needs to be able to implement a plan specially designed for you.

What solutions do you need?

With the appropriate geospatial data and location intelligence tools, we will have the keys to an efficient omni-channel strategy.

This geolocated information includes information on consumer behaviour in each establishment, pedestrian and road traffic in each area to be studied, demographic variables, proximity to places of interest (workplaces, public transport, shopping centres, etc.) and many other types of information.

In this way, managers will know with certainty how many establishments to locate in the same market and where, the characteristics and products to offer in each of them and, in general, make decisions that increase the return on investment, avoiding cannibalisation and achieving the much-desired halo effect between the different channels.

OMNICHANNEL RETAIL NETWORK OPTIMIZATION

The retail sector is clearly marked by the influence of different sales channels, such as physical and online stores. Therefore, it is essential to know the geospatial data that explain the dynamics of these channels, as well as the cause-effect relationships between them. With Locatium, you will be able to choose the best locations for new stores, predict results in new locations, mitigate the influence of competitors considering cannibalization, and optimize the right online-Vs-offline mix in each location.

Do you want to see how
many industries this use case applies to?

Cannibalisation is a problem that is very present in the vast majority of business scenarios. At Locatium, we want to help you identify the main industries where we can lend a hand to prevent it from occurring.

Retail

Geographic data is a high-value resource for analyzing the effects of the industry's own omnichannel and for customer segmentation. With them, the locations of the establishments and their particular characteristics can be set more accurately, avoiding cannibalization and the influence of competitors.

Telco

With such a wide offer, telecommunications companies are forced to offer excellent service to their customers to be truly competitive. To achieve this it is necessary to design an infrastructure capable of meeting the needs of the user, as well as doing it with the greatest efficiency. Geolocated information is key to your site selection and deployment.

fmcg

Geospatial technology greatly speeds up the supply of fast consumer goods, facilitating their access for all buyers through an adequate choice of the locations of the establishments, as well as the types of products that these really demand.

Restaurants

Choosing the most valuable location for hospitality businesses involves analyzing useful geospatial data to attract customers who come to the physical establishment and for those who request home delivery (OoH marketing). It is also important to know the degree of saturation of each market, in order to know the ideal number of restaurants for each one of them.

Healthcare

Geographical data to know precisely and without risk the best situation for the performance of clinics of various medical specialties. These greatly increase the planning capacity of the various brands in the sector in specific markets.

Banking

The banking sector faces a challenge when it has to design a network of branches that satisfy the demand of its clients, as well as optimize its portfolio of financial products based on the characteristics of its target audience, both current and potential.

Automotive

The geolocated information allows you to decide in a documented way where it will be most beneficial to locate dealers and workshops. For this, areas of influence, prediction of demand, levels of cannibalization, and those establishments that are more and less profitable are taken into account, among other variables.

Want to know more about this use case?

If we have caught your interest or if you have any questions, we will be happy to help you without any obligation so that you are really clear about how Locatium can contribute to the success of your project with our datasets and advanced solutions.