In all markets and geographic areas, there is a maximum number of establishments that can be installed. Beyond this, business results will suffer.
It makes it essential to know the degree of saturation of an area and its maximum capacity so that we do not make an effort that will not offer benefits in the future.
General Description of this use case
It is a challenge for retail managers to find the exact number of shops to locate in a given area. Not only this, but also that they are placed in the optimal locations to achieve the best sales results.
If more outlets are opened than necessary, a market will be saturated. As a consequence, the cannibalisation effect will appear. In other words, shops of the same brand will compete with each other and their sales will be negatively affected.
On the other hand, if we have fewer outlets than the ideal number, we are missing an important opportunity to make more profit in that particular market or area.
Therefore, we are not talking about a simple decision, as each market or area has its own peculiarities that make it very difficult to be accurate in this estimation.
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?
In order to accurately estimate the number and location of establishments in a given geographic area, it is key to have certain geolocated data under control.
In this way, we will have reliable information on how the presence of other shops in your vicinity, whether they belong to the same brand or to your competitors, influences your business. Depending on the response obtained, we will have a basis on which to make a decision on whether or not to continue expanding. If the answer is yes, the geospatial information will also serve to determine the locations with the greatest potential.
Other types of geographical data also come into play here, such as those related to the socio-demographic characteristics of the population and those that define their consumption and living habits, as these will adapt better or worse to the offer of our business.
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.
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many industries this use case applies to?
Capacity planning is a critical process for a number of industries. From Locatium would like to help you identify the main industries where we can lend a hand to prevent this from happening.
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.