Strategic Retail Location
1—Executive Overview
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CLEO boxes in the
competition's superstore in this scenario, closing 101, 108 and 112 in
favour of
three new sites.
Hypothetical data; real recommendations. You may not want to be quite
so predatory. This merely illustrates how CLEO can
be programmed.
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You have multiple stores in a city. There are competing chains. How do
you measure a good location—one that works well on
its own, and complements your existing network against the
competition?
This is not just about site features such as
parking
spaces, visibility and signage. It's also about location value. Not
just being near a freeway, but freeways from where, carrying whom,
when? Taking advantage of which complementary services, playing against
which allied and competitive stores, of what size? There are road
networks, store attraction measures, congestion and cannibalization to
consider. It's about teamwork in a spatial game. This is more than even
the most experienced eye can analyze. It's the
realm of numerical geospatial analysis
and modeling. Specifically, strategic
retail location.
And it is
precisely why we developed our modeling software and analytical
service: Competitive
Location
Evaluation and Optimization (CLEO). High-stakes property
investments and store fortunes ride on assessments of location value.
CLEO is not a retail
application built on a GIS. It is a GIS built from the ground up for
strategic retail site selection. Going well beyond simple mapping and
gravity
modeling,
CLEO incorporates operations research, financial modeling and
decision support.
CLEO's geospatial models consider the distribution
of
demand, the street configuration, drive time and the attractiveness of
shopping alternatives, including the competition. Another set of
models lets you look at a myriad of options by shuffling stores
around thousands of times and picking the best configuration. The
decision
support
system helps you manage the options and formulate an investment
strategy.
You focus on the management questions. We're
buying this other chain; how do we rationalize the
combined network?
Which of the older generation stores are most dispensable? Should they
be upgraded? Assess the
competition and play what-if games. Protect franchisees
against
cannibalization.
CLEO does the math and generates the reports. It
can even come
up with aggressive encircling
maneuvers of its own (illustration).
To our knowledge CLEO is the most advanced retail
location software
available. This is consistent with our record. We were the first to
develop
location-allocation models for portable computers (1982). The first
to model impulsive shopping (1983). We couple expertise in modeling
with
careful and knowledgeable geographic analysis.
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