Sales Impact Analysis

We collect customer location data at existing stores that may be impacted by proposed stores. Using a methodology that incorporates both computer applications and experience elements, we accurately predict customer migration and revenue lost if the proposed stores open. Our method of collecting and geocoding customer addresses substantially increases the number of respondents per store, lowers the risk of outside influences on the data and eliminates map pin study inaccuracies. Our success in predicting sales impact has earned us a reputation unsurpassed in the industry.

Frequently Asked Questions

What is the purpose of a Sales Impact Analysis (Impact Study)?
An Impact Study predicts the loss in sales that will occur at an existing store (retail, restaurant or service) if a proposed sister store opens in or near the trade area of that store.

Why is a Deforest & Company Impact Study so accurate in predicting sales loss?
The Deforest & Company Sales Impact Study, also known as an Encroachment  Study, incorporates a methodology that includes four days of in-store customer data collection, data input, geocoding (locating the Latitude and Longitude) of customer addresses, the use of a proprietary model incorporating various computer applications (including drive time calculations), and a subjective analysis by an experienced real estate professional.

Why is the DeForest & Company methodology superior to others?
Unlike other methods that require customers to pinpoint locations on a map (a big challenge for many who can’t read maps), the DeForest methodology incorporates the collection and geocoding of customer location data at the existing store, measuring the distance from every customer location to the proposed and existing store and an accurate calculation of which customers are closer to each of the two locations. Along with improved accuracy through geocoding, the DeForest method improves accuracy statistically by collecting more customer responses, an average of over 650 customer responses per study, an increase of more than 50% over the industry standard of 400. Additionally, collecting more data has proven to be of value when faced with individuals who try to influence study results by sending friends or relatives to the study store during the data collection process.

What do you I receive when the study is complete?
Upon completion, an 18 page report will be provided. The report is available in PDF format or in a bound, hard copy. The report will include a sales loss prediction that is presented as a percentage of sales the existing store will lose if the new store opens. It also includes a written summary of the findings that support the prediction, along with valuable marketing information and a series of easy-to-read tables and charts.

How soon will I receive the study report?
Under normal circumstances a report will be sent by e-mail or overnight delivery, approximately ten business days after in-store data collection is completed.

Why do major Franchise organizations feel it is necessary to conduct an Impact Study?
Many of the national chains, including most of our clients, have internal methods for assessing sales impact. They choose to hire Deforest & Company to 1) get a second opinion from a professional organization that conducts these studies with consistency, a high degree of accuracy and on a regular basis, and 2) show due diligence, that is, protect themselves in the event of legal action after a decision is made on a new store. This has become an important factor in recent years because it proves beyond a reasonable doubt that every effort is made to insure fair and equal treatment and that approvals for all new stores go through the same rigorous analysis for all parties.

Who usually pays for an Impact Study?
Almost all the major franchise chains have devised a way to minimize the number of objections by concerned franchisees that believe they will be negatively affected by any new store, even if it is many miles away. They require all dissenting franchisees, along with the proposed store franchisee, prepay for the Impact Study within a set time period. A time period is set because good real estate locations do not last long and dissenting parties can eliminate a proposed new store simply by delaying their response. When the franchiser receives the money from all parties, Deforest & Company is hired to conduct the study. In many cases, an acceptable sales impact percentage is established by both parties before the study is conducted. If the impact prediction is the same, or lower than the agreed upon percentage, approval is granted to build the store and the new store franchisee is reimbursed the cost of the study. If the sales transfer prediction is higher, the opposing franchisee(s) are reimbursed for the cost of the study. This policy drastically reduces frivolous oppositions to new store development, and it is widely accepted by the franchise community.

For what other reasons do Franchisers choose DeForest & Company when it comes to Impact Studies?
The Deforest & Company Impact Report is loaded with valuable information in an easy to understand reader friendly format. Franchisees are made to feel comfortable with the entire process because a Deforest & Company representative will contact them to explain the methodology and answer questions about the study before and after it is completed.

How long has Deforest & Company conducted Impact Studies and what companies do they work with?
Deforest & Company has been successfully conducting these studies over 15 years for chains like Denny’s, Churches Chicken, Dunkin Donuts, Mrs. Fields Famous Brands, Baskin Robbins, and Popeye’s Chicken & Biscuits, to name a few.