Optilox Presentation

Store Location Optimizer

‘There are three things that matter in a site selection: location, location, location.’

- Lord Harold Samuel

A Product of DATAWISE

PTILOX

DATAWISEconnecting information and expertise

PTILOX

9.94

1.8

3.5

1.074.11

19.25

Mall space distribution in top 7 cities (in million sq.

ft. )

MumbaiPuneKolkataHyderabadBangaloreChennaiNCR

Changing Retai l Landscape

Modern retail is expected to increase its share in the total retail market to 22% by 2010.Organized retail segment is expected to grow from 5% to about 14-18% by 2015.Penetration of organized retail is projected to increase to 9.52% in 2009-2010, with revenues from organized retail touching US $43,829 million in 2009-2010.Retailers trying to get a share of the market will need to ensure that they are more careful in their planning for expansion.

Source: www.ibef.org


PTILOX

Retai l Stores: Chal lenges

Retailing

Consumer Management

Store ManagementBrand Management

Store Management: Stores require active and intelligent management of resources and inventory to ensure viability. This requires capabilities in logistics, warehousing and inventory planning and management.

Brand Management: In order to distinguish your product or service from the competition and create a lasting impression, including POS branding.

Consumer Behavior Management: Consumer Management becomes the most important and often neglected aspect of retail business. The more the knowledge and ability to attract the right number of type of consumers, more is the stores’ capability to increase its revenues.


PTILOX

While the last few years has witnessed a rapid growth of retail outlets, the early movers have realized a number of challenges of the business:

Lack of TrafficUnder developed supply chainPoor warehousingHigh real estate costShortage of retail space

The industry has been concentrating on the supply side issues, with little attention to the demand side problems. One major issue giving rise to all these challenges:

Selection of right location for the store set up

Retai l Stores: Chal lenges…

Selection of a retail store requires time and careful consideration. At the same time identification of correct parameters is equally important.


PTILOX

A poorly selected location for a retail store will mean all of the following:Additional efforts in acquiring customers.Additional advertising spend to compensate for inappropriate location.Potential risks of failure to attract the right kind of customers and therefore unwanted customer costs.Additional costs for loyalty programs.Risk of potentially requiring to relocate the business.

Impact of Locati on

Loyalty program costs Additional advertising efforts Unwanted customer costs Customer acquisition costs0%

5%

10%

15%

20%

25%

30% Additional costs arising out of inappropriate location*

* Indicative. Actual savings will vary


PTILOX

Traditional parametersExposure and visibilitySignageAccessZoningUtilitiesCompliments and competitionResponsiveness of landlordIntestinal tactility

Analytics driven parametersFootfall measurementsCustomer demographicsCustomer behaviorAgglomeration characteristicsCustomer preferences and perceptionsDemographic analysis

Locati on Selecti on Parameters

Consumer behavior is the least addressed parameter while it is most important to ensure footfalls.


PTILOX

Increased data based decis ion making

Tech

nolo

gy a

nd d

ata

inpu

ts

Experience/ Experimenta

l

Checklist

Ratio

Analogues

Analytics

Rule of thumb procedures often employed on site where the benefits of experience, observation and intuition drive decision-making.

Procedure to systematically evaluate the value of (and between) site(s) on the basis of a number of established variables

Assumes that if a retailer has a given share of competing floorspace in an area it will achieve a proportionate share of total available sales

Existing store (or stores) similar to the site are compared to it to tailor turnover expectations

Attempts to define a correlation between store sales and variables within the catchment area that influence performance

There is a growing trend world over towards the use of data based decision making for location selection. Some of the common methods of site selection include:


PTILOX

OPTILOX is a behavioral analytics model developed by DATAWISE designed and conceptualized by Arthur D. Little to serve the retail industry. OPTILOX is designed to help retail chain owners select the right location for expansion of its retail stores in order to maximize customer footfalls.Retailers can help in making the right decision in selecting the location of a retail store, faster and with greater assurance of success.OPTILOX addresses the following:

Influence of location on demand.Influence of the agglomeration on demand.Mapping the selected location demographics to consumer preferences and perceptions.Forecasting the potential customer base at each alternative location.

Our Model: OPTILOX

1 2 3 4 5 6 7 8 9 10 11 12 -

10 20 30 40 50 60 70 80 90

100

With sustained advertising With Optilox

Months

Footf

alls

per D

ay


PTILOX

Based on Consumers’ perceptions of the stores’ product and brand image: The study of the current location of the running stores’ of consumers’ perception visiting the stores. This helps in defining the key demographic and psychographic components of the consumers.Supplements the location selection criteria set up by site acquisition teams of firms. We provide a proper blend of demographic and psychographic, information for site selection.Increases the potential for success of selected retail locations. Our approach helps in the maximizing number of footfalls which gives opportunity to a store to improve customer conversion ratio.Assists in selection of ideal location among alternative agglomerates. Our approach is designed to enable selection between numerous sites retailers take effective site acquisition decisions.Involves data analysis based on existing information, field data collection, and analytics engine developed by DATAWISE.

Our Approach


PTILOX

Methodology

Identification of customer profile based on existing store data, or field survey.Confirmation of key parameters defining customer profile.Field survey of customer profile at all alternative locations being proposed.Analysis of data:

Determining ideal consumer profile based on hierarchical clustering methodology.Estimating the proportion of ideal customers at each alternative location.Forecasting the largest comparable cluster size at each alternative location.Evaluating alternative locations’ fitness to client selected ideal profile.


PTILOX

It is a customized service addressing all kind of retailers.OPTILOX is flexible enough to accommodate parameters according to the varied needs of the retailers.It can be used for comparative analysis of any number of locations.It is customizable to suit the requirements of new entrants as well as existing retailers.It helps in studying all the important aspects of site selection.It helps in increasing the number of footfalls.

Benefi ts


PTILOX

Grocery chainsJewelry outletsPremium showroomsCompany outletsFranchiseesBanks/ ATMsRestaurantsPharmacy outletsShop-in-ShopsCoffee shopsKiosksPetroleum outlets

Entertainment houseHealth and Beauty outletsConsumer durables outletsLeisure retailDepartment storesValue retailFootwearFashion retailersAccessories outletsApparel brandsConcept retailMulti-format retail

Potenti al Benefi ciaries

OPTILOX is applicable for all retailers whether big or small.

Thank You

Store Location Optimizer

A Product of DATAWISE

PTILOX

Optilox Presentation

Documents

Transcript of Optilox Presentation