Case Study: Network Development for a Leading Retailer

Client Profile

Our client is a leading national retailer with over $5 billion in sales and a store network of over 200 locations.

Client Need

After building the first forty stores in their retail network using only the advice of real estate brokers, our client was disappointed with sales results from new locations. They were looking for more insight into the site selection process, and wanted to develop a method for picking the best locations in the right markets. The goal was to achieve a high return on investment while minimizing sales cannibalization.

Our Approach

After advising our client to collect customer address information at the point of sale, Archerra analyzed the store network using this geo-coded customer information. Individual store trade areas were then calculated based on customer location. With the trade area network defined, Archerra measured store performance by monitoring market share per neighbourhood.

Armed with this information, Archerra identified geographic pockets of high household spending but low sales penetration. These regions became candidates for new store locations. Consequently, we identified trade area boundaries and sales projections for each new site.

Client Impact

From the original forty stores, our client has successfully grown to over 200 locations in the last fifteen years. Archerra has been with the client every step of the way, working hand-in-hand to optimize new site selection. Based on a study conducted by our client, Archerra’s sales projections have been accurate within 5% of actual numbers. We at Archerra are extremely proud of these results, and believe that they will continue to strengthen our relationship for the next fifteen years.