Weiwei Lai

Business Analyst

January 23, 2015

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Tesco completes CRE joint venture in China

Store network optimization is next big thing

China Resources Enterprise (CRE) has finalized acquisition with Tesco to create the largest food retailer in China by the end of May, 2014. The joint venture will combine Tesco’s 135 outlets in the country with CRE’s almost 1,000 stores, called Vanguard. Vanguard owns various business types such as hyper-marts, convenience stores, supermarkets and others. Among these outlets there are more than 250 hyper-marts. It is crucial for CRE to effectively carry out integration and store optimization plan after the acquisition.

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getchee Insights

To better execute store network optimization, brand owners need to fully understand market potential and penetration of targeted city. Reviewing performance of current stores and comparing actual performances against potential’s to get a clear picture.

Steps of SNO (Store Network Optimization)

  • Scorecard: to assess each branch and analyze competitor distribution
  • Cannibalization analysis
  • Channel optimization: overall planning of current stores (keep, improve, move or close)
  • Market expansion: site selection of new stores in terms of untapped high potential areas

 

Kenny Lee

VP, PMDO

December 1, 2014

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How Location Intelligence Benefits to Your Business?

You have heard that over than 80 percent of enterprise data has spatial components based on IDC market. But what is Location Intelligence got to do with it? and how can it transform your data from an underutilized asset into a source of competitive advantage?

By mapping locations, agencies and businesses can find new insights about business operations and processes, and improve services for customers. For organizations, the use of business location data and GIS increases collaboration across the agency, along with improving business functions. In many instances, GIS software can be layered on top of CRM or ERP systems, making implementation very easy, and leveraging resources in new ways.

Location analytics is a critical business asset that will provide a competitive advantage by adding geographic and location context to information enables organizations to understand more about their customers, whether they are other businesses or consumers. It provides critical business insights, enables better decisions and improves processes and performance. Location awareness can benefit efforts in marketing, sales, and customer acquisition and retention; logistics and supply chain management; and financial and operational decisions, not least among them where to place retail outlets, business assets and people in various functions. It also can increase the value of technological innovations such as business and social collaboration, and even mobile technology that is used by the business and customers along with the analysis of social media commentary and other expressions of customer sentiment that could be part of big data efforts.

Here are a few examples of how location intelligence is being used today in a variety of different industries.

  • Site Selection: The decision about where to locate a new store or facility, is probably the most common application of location intelligence today. When location data is combined with available real estate, demographic data, current customers characteristics, and information on the most likely prospective customers, the resulting Location Intelligence can help identify a site location with maximum revenue potential.
  • Store Performance Management: Detect and categorize poorly performing stores and assess the strategies to uncover the relationship between stores, products and customer types that affect sales performance. In addition, location intelligence can be used to forecast and develop store-specific budgets and expectations based on the size of surrounding demographics and other location specific information.

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  • Risk Assessment: Location is extremely important in the insurance industry, where customers and natural disasters are both tied to a location. When a natural disaster occurs, insurance companies have the capability to instantly understand their claims exposure by visually plotting their customer data and the affected area on a map. This also allows them to more accurately estimate the number of resources they will need to service claims in an affected area.
  • Customer Preference: Understand who your consumers are and where and when they want to engage with you. Optimize retail stores for maximum customer engagement increasing profits and brand loyalty.
  • Healthcare: a significant percentage of disease is caused by environment.  There is a tremendous amount of knowledge to be gained and disease to be reduced or eradicated by understanding these effects.  Health records tied to user home and work location can be a massive benefit for researchers.
  • Government Public Affairs: Monitor and identify pollution violators.  Determine deteriorating areas of a city and revitalize.  Gain more input from citizen reporters and be able to analyze and take action.  Create transparency to stimulate self-regulation at scale.

Also worth reading:
Why SNO Is The New SEO For Retailers
How Big Data & Social Media Are Changing Retail
5 New Technologies Boosting Retail Sales
 

 

 

Kenny Lee

VP, PMDO

November 17, 2014

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Future of brick-and-mortar stores

Retailers need to be focusing on optimizing store portfolios, while simultaneously improving their online presence.

Will online shopping squeezes brick-and-mortar stores?

Traditional retailers need to select the best sites for stores, determine the optimal number of locations for each market, keep up with consumer expectations of what the in-store experience should be. However, consumer aren’t coming to stores for the prices or the selection as they can usually find better alternatives to both online.

China’s online retail market, which has surpassed that of US as the world’s biggest, and will continue to grow rapidly  to a level threatening brick-and-mortar stores in next few years. According to the official government data, Chines consumer spent US$300 billion last year, 13% per cent more than the US. This figure makes China the biggest market for online retail in the world.

Based on getchee market research, online sales now accounts for approx. 10 per cent of total retail sales but anticipates it will grow 30-40 per cent a year in China market. However, that means that 90 per cent of retail sales are still happening where sales have taken place for hundreds of years: Physical stores, retailers have physical presence to engage with consumers.

Why personalized retails is the future of brick-and-mortar stores?

Consumers prefer to shop in physical stores as it allows them to have a sensory experience – they can touch and feel product, immerse brand experience, and interact with sales associate. Many retailers are taking a page from their traditional compositors by offering an in-person shopping experience that can’t be mimicked on a tablet or smartphone. This heightened focus on in-store experience could be a sign that the retail industry definition of successful store is changing.

Key benefits for retailers and customers

1. Discover customer preference to offer the right product mix, reduce inventory distortion and raise brand awareness.

2. Draw attention to products using catalysts, like mobile payment, phone apps, or special promotion program; increase retention of existing customer and get customers to try new products.

3. Give customer a reason to shop in-store by surpassing the online experience with more relevant product information, interactive self-service stations, and expert insights from sales staff – delivering an immersive brand experience.

4. Allow customer to shop the way they want, using a combined channels (in-store, online, mobile and self-serivce) accommodating their busy lifestyle.

5. Making personal connection by sending an email or SMS wishing them a happy birthday, congratulation on an anniversary, or gifting a beverage 0 making them feel special.

 

The future of retail stores

So instead of concentrating solely on one channel, retailers need to be focusing on optimizing store portfolios, while simultaneously improving their online presence.

Retailers also need to adjust the way they view the value of their physical stores. When online shopping exploded, retailers determined the impact to performance of a store based on its sales numbers. Brick-and-Mortar stores need to be viewed and help consumers discover new products and test ones they have seen online – regardless of where the actual transaction takes place.

Brick-and-Mortar stores capture sales, but they also create value by driving online sales. This means the value of a store for both consumers and retailers is greater then the sales captured within them.

 

 

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