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Measure Market Share At The Neighbourhood Level
Measuring just the sales of your locations is only looking at half the story. Retail sales ultimately come from the product demand of customers who surround your locations. The customer demand in every neighbourhood is the key to analyzing sales potential. Comparing sales to demand and calculating market share gives much better metrics for location performance and forms the foundation of our analysis to find growth opportunities.
Calculate Market Share
Market Share is simply your sales divided by the product demand in every customer neighbourhood. Calculating market share starts with your customer sales data collected at your stores. From this data you can calculate your store sales in every customer neighbourhood and compare that to the estimated demand for your products. With your market share calculated, you can begin to measure your performance and grow strategically.
Measure Performance with Market Share
The key advantage to using the market share metric for performance evaluation is that you can compare the sales of a location or region against the size of the demand. If the location sales are low and the demand is low, the location is not necessarily under performing. If the location sales are low and the demand is high, not only is the location under performing but it has more sales potential available. With the market share metric, your focus will shift from the locations with low sales to locations with low market share. In addition, locations that are high performers with high market share can set the benchmark for performance for the rest of your retail network.
Find Growth Opportunities
With your market share calculated for every neighbourhood and every market, you can identify growth opportunities as areas of low market share but high demand. Improve sales of your under performing stores by targeting high opportunity customer neighbourhoods in marketing campaigns to increase sales. The customer profiles for these neighbourhoods can also be identified to tailor your messaging and increase engagement with your brand.
In addition, analyzing market share can form the basis of you retail network growth plan. Focus your growth in areas where the opportunity to increase market share is high. Add locations strategically to tap into customer demand and minimize cannibalization.
Where to start?
Talk to us and we’ll help you analyze your customer sales data and provide the tools and support to increase your market share.