"Our client is happy with the analysis by MarketAnalyzer and Tactician technology that results in effective marketing investment and cost reduction." -- GSI

Giken Shoji's client, a clothing retailer that has 500 stores across Japan, launched a new brand and planned to open 500 new stores in 5 years time.

Obviously, it was necessary for this project to access the potential of the market. The company also needed to proceed with the project carefully without cannibalizing existing stores.

However, the company felt insecure about the existing trade rules based on distance and travel time as well as possible impact of new stores on existing stores. The company tried to sort out by checking the customer list with the trade areas and marking locations on the map, but could not even find a clue.

First, GSI suggested the company to clarify the actual trade areas by leveraging the rich features of MarketAnalyzer powered by Tactician One.

According to this suggestion and the following advices, the company generated a report using their customer data, which had been complexly-mixed and remained untouched. The report includes:

• Pie chart showing the customer ratio of neighboring stores in each area.
• Classified map by color based on the demographic data to show the potential of each area.
• List of areas with population, potential and number of customers.

Blue mesh shows the area where the majority of customers belong to the own store. Red mesh shows the area where customers coexist with plural stores.

The visualized actual trade areas were compelling and relieved the concern about the trade area definition. The company could see the territory of each store at one view. Using the data on the actual trade areas and the potential of each area based on population and consumption cycle, the Store Development department figured out the differences between the actual and expected numbers of visitors to existing stores. It gave them ideas of whether the company should open new stores or just enhance sales promotions to attract more visitors in areas not having enough customers. It was helpful to avoid cannibalization* and identify locations with high potential for new stores.

In addition, the Sales department provided the report to the manager of each store to share the valuable data. It is a useful tool for them to give appropriate advices to store managers.

The company updates the report with the latest data on a regular basis to know changes in the trade areas timely. It helps them to know effects of competitors and other factors and leads to effective decision-making. The company can smoothly fine-tune sales promotions by adjusting target areas to focus.

* Cannibalization: Refers to a decrease of sales as a result of the introduction of a new product or store by the same vendor.

By: Makoto Arai, GIS Marketing Group, Giken Shoji International Co., Ltd.