8 ESSENTIAL QUESTIONS FOR SUCCESSFUL OUTLET PLANNING

Understanding market share is important – are we keeping pace with how fast the market is growing? Which competitors are we losing out to? The executive team wants a high level view; it needs to know if the organisation’s strategic direction is working. At the same time, the people involved with executing on strategy need to know more so they can continue to make great decisions. It seems that people delay making these decisions because the potential risk of making the wrong one is too great.

This conundrum is highlighted when it comes to your bricks and mortar presence – a massive cost to the business, whether you’re a retailer or a service organisation. Depending on the size, product and nature of your business, these decisions can be complex. The skill is to work out the right level of complexity for your given situation and avoid paralysis by analysis whenever possible.

 Suffice to say, outlet planning no longer needs to be done by:

  • Going with gut feelings
  • Producing a map of outlets and looking for white space
  • Drawing a circle around existing outlets and viewing that as the catchment
  • Only considering some market segments and some channels, rather than all of them

For brands with a national presence, here are some questions that help ensure your bricks and mortar outlets are in the right place, thus improving business performance:

  1. Is market share consistent across the country? If not, why not?
  2. Does market share correlate with physical presence? This is especially relevant for service businesses.
  3. For retail, are you getting your expected level of turnover for each outlet? This can be calculated by understanding the local market and its potential to spend in your category. There’s nothing like benchmarking to get focus!
  4. If we open a new outlet or close an existing one, what will be the impact on turnover and profit?
  5. What are the population and business changes that are occurring and the opportunities presented by green field sites?
  6. What opportunity exists for automating processes and servicing?
  7. Can front-end activities be migrated to digital and self-serve?
  8. Which customers can we migrate to self-serve?

When dealing with a complex national review, results from multiple studies (qualitative and quantitative) need to be combined into a cohesive view to make the discrete pieces of analysis useful. This is a challenge – one that typically cannot be tackled by a single person alone. Luckily, a scientific approach or algorithm can be developed to aid this complex decision making.

Swooping back to the start of this ramble, market share measurement is a critical factor, as it puts turnover figures into the context of the market. However, operations need to go beyond this and consider outlet benchmarking and identifying gaps / over-supply in physical presence. These are critical decisions, all of which can be underpinned by data.

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