Branch expansion with predictive analytics

Predictive location, and foot traffic analytics reveal valuable information that helps retailers to choose the right location when setting up geographic expansion strategies.

Thursday, March 24, 2022

How are predictive analytics models used to determine the optimal location for a new facility?

Predictive analytics is a type of statistical analysis that uses data mining, statistical modeling and machine learning to extrapolate trends from historical facts and current events and is often used for risk assessment and decision making.

Today, this tool within retail, encompasses loyalty metrics, store size, consumer demographics, inventory management, product assortment, to understand your target market, differentiate your products and services, and determine the ideal locations to expand in a way that maximizes sales and customer satisfaction.

You might be interested in: “How to create the best branch expansion strategy?

How do you get this data to train these models?

Retailers can find relevant data through location analytics, which uses GIS data to understand different geographic and spatial factors, while using statistical techniques to predict the best location for each store.

Other data used to train these models can include internal sales data, demographic details and population profiles. Other macroeconomic indicators are also used, such as the purchasing power of the population, the economic growth rate and the cost of opening new points of sale, among others. Read the complete article here

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Should I expand my stores to other cities in 2022?

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Retail store expansion strategies are one of the most fundamental issues for growing retailers. Opening a new store can be a game changer if you get the location right, or your new store could be doomed to failure if the location doesn’t attract enough customers.

In addition to geographical factors, such as transportation accessibility and real estate prices, demographic factors and mobility patterns in the areas of interest play a key role in decision making. These data on population, purchasing power and consumption habits are what generate an optimal expansion strategy.

How to create the best branch expansion strategy?

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To ensure the success of branch expansion strategies for site selection plans, it’s necessary to compare the business model with the the potential market needs and build the corresponding strategy, location and foot traffic analytics are the best tool to do so.

Foot traffic data gives retailers a competitive advantage in site selection by helping to visualize how local market dynamics have changed over a long period of time, uncovering new opportunities and insights in real time that would not necessarily have been evident through more traditional or one-dimensional data sources.

Foot traffic Analytics in Department Stores

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Location intelligence and foot traffic analytics are transforming the way retail strategies are defined, and department stores are no exception.

The correlation between foot traffic, sales, and the success of department stores have been studied and proven, so the development of this type of analysis has become a priority in the site selection process and expansion modeling.

POS Analytics based on Big Data

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When we talk about point of sale (POS), we refer to the place where a customer transacts payment for goods or services.