Case Studies & Testimonials
Evaluating the potential sales around a given retailer site
A large Bakery Company
BACKGROUND
This well-known Bakery Company operates 350 hot bread stores across Australia. To ensure the success of their planned expansion and to determine the performance of their existing sites, they needed to find a method for evaluating the potential sales around a given site. Determining a likely turnover figure for each store is a key issue for them due to the differing characteristics of the trading area of each outlet.
The Bakery Company has previously located sites based on their being a certain number of households within a given area. Since the majority of ‘obvious’ sites now has a bakery store, it was realised a more strategic approach was required.
"Pacific Micromarketing helped us to evaluate the potential sales around a given site prior to our expansion."
ACTION
The common information the Bakery Company holds for each is the store location and store turnover figures. Using these resources and external data from Pacific Micromarketing, a three-stage solution was developed:
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Building catchments around each store
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Allocating a spend figure per Mosaic Type
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Using the spend per Mosaic Type to estimate turnover for each site
As opposed to using basic catchment definitions of a specified size – for example, a 5 minute drivetime, the catchments were built by growing each catchment area from the store location.
The expansion of the catchment area was halted when the desired quantity of households was reached, or the maximum distance exceeded.
This approach had the benefit of keeping the catchment areas as compact as possible, identifying unallocated areas as potential new sites.
RESULTS
Confidence was given to the results through the comparison of predicted store turnover to actual store turnover, with the majority of sales being close to actual sales. The over and under performance of certain outlets proved most revealing, allowing the Bakery Company to take appropriate action to address the issues identified.
The Bakery Company now has a basis for the assessment of both existing and new sites. This process allows for each site to be evaluated and prioritised to ensure the available resources are allocated to the locations offering the highest returns, prior to committing the required time and resources to securing the site.
An added benefit of this analysis is in identifying the different customer types within each catchment area, allowing appropriate local area marketing to be undertaken to elicit the required action from each customer type.