Market Strategy Study

The situation: Our client, a major retail chain operating stores in four western markets, wanted to develop a strategy to maximize profitability in one of these markets.

The issue: To accomplish this strategy, the company had to maximize store penetration and at the same time limit sales transfers between sister stores.

The problem: The company had neither the systems tools nor the staff experience to identify sites that would help them achieve their goals.

The solution: DeForest & Company created a map and a detailed report that allowed the client to take a proactive approach to site selection. Instead of waiting for brokers to bring the company site suggestions, our client directed brokers on where to concentrate their search efforts. This saved time and money, and it prevented brokers from driving the process by offering available listings and trying to make them fit the client’s needs.

To create our report and map, we did the following:

• Established accurate information on sales penetrations per census tract (achieved through customer source surveys).
• Used the information to establish existing store primary trade areas.
• Segmented the market into existing and estimated trade areas.
• Identified preferred retail corridors in estimated trade areas.
• Identified all census tracts that had the highest potential for sales.
• Identified existing and proposed competition in the market.

Within 18 months, the client was able to locate four new sites, open one new store, relocate two stores, and close one store.