Joshua Roberts

Creative Director

June 17, 2013

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Case Study – A Global CVS Brand

A major convenience store chain works with getchee to increase its market share in China.

 

Struggling with difficult market challenges, this convenience store chain was looking to better their business process in order to be more competitive, and ultimately increase market share in China.

getchee’s principle role was to help facilitate this CVS brand’s goal by empowering them with better spatial data, tools, and services to help them make better decisions, faster.

The Challenge

Increase total market share by expanding store coverage, while minimizing the risk of bad investments.

The brand owner represented a very low share of the CVS market in China. With a strong regional presence in other Asian markets, and a clear rise in convenience potential, the need to increase coverage to gain brand visibility and market share was the number one priority.

The chain’s internal development team had a loose process for finding new sites, but a lack of standardization, and a deficit of tools and data led to many hurdles.

Using Google or Baidu maps, the team would add point of interest data to get an idea about different areas. With a lack of analysis, visualization, and reporting functionality, decision making became a huge challenge.

After finding locations that matched physical site requirements, they conducted basic trade area analyses. These would help in understanding a bit more about the location in terms of its potential (based on nearby competitors and demographics).

Working with tools meant for the consumer market, and coupled with a lack of data, the development team was wasting a lot of time. It turned out to be a very single-filed approach to site selection. The time lost, it turned out, was critical for securing real estate in promising areas.

Using a slow, inefficient approach to site finding lead to real losses. By the time the development team found locations suitable for new stores, they had often been taken by competitors.

The lack of qualified sites in the development team’s pipeline lead to a very slow store rollout plan. With a need to continue expansion, the brand owner was forced to make less-than-optimal choices on 2nd or 3rd tier locations.

Greatly increasing the site selection speed, accuracy, and efficiency was the ultimate challenge for this CVS chain to overcome.

The Solution

A new site selection and approval process based on standardized market data to increase the speed and accuracy of decision making.

A full-fledged solution was delivered that included standardized market data, a customized model for market potential, area scorecards, and a spatial tool to quickly evaluate areas and generate reports.

The first step was to determine areas in the market that represented high CVS potential.

Working closely with the CVS brand owner, getchee identified the criteria needed to model market potential. Key competitors, synergistic brands, and target consumer segments were factors in the model.

Once the new model was created, getchee’s consulting team worked with the brand owner to identify market gaps; these being areas with high potential, but having a lack of brand presence.

This first step was critical in laying the framework necessary for a better expansion strategy based on targeting areas first, rather than sites first.

By targeting areas, rather than individual sites, the number of potential site candidates that enter the development team’s pipeline are greatly increased. This is a funnel approach, rather than a single-file approach; it’s a matter of filtering out areas that have little to no market potential, and focusing on the ones that do.

Working with the development team, getchee provided area scorecards for to help provide a more objective layer of information needed to determine the potential of different areas.

As a final phase to this solution, getchee introduced the development team to a powerful spatial tool called KiwiTM. The tool enabled the development team to explore new areas, generate trade zone and service area reports, and provide objective insight to help validate local knowledge.

Output from the tool could be used for further decision making.

Final Results

In a competitive market filled with challenges, this brand owner was able to use a getchee solution, powered by spatial data, to better their expansion planning capabilities in China.

After the solution deliverables were in the hands of the client, the development team began using the output to screen new areas and generate reports. Using KiwiTM as a tool in their process, they were able to increase the speed of filling their development pipeline.

The initial tool use was extremely high and was used nearly every day. In less than a year, over 1000 new site candidates were entered in KiwiTM as part of their expansion planning efforts.

About 60 to 70 percent of actual new store openings occurred within getchee recommended areas. The client felt that the spatial data getchee provided, especially for tier 2 cities, was quite good and very helpful to their planning activities.

Overall, given the fact that this brand is operating in one of the most challenging markets in the world, they felt happy with the output as its business benefit seemed to be obvious to the entire team.

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