Case Study 3:
Rebooting an Underperforming Market
A shoe retailer’s performance in a particular metro area had been a disappointment. Executives had tried remedies like increasing local advertising and transferring proven store managers from other regions, but nothing seemed to work. This situation was especially perplexing because the client’s same store sales had grown steadily in almost every other market.
We looked at this metro as if the retailer was entirely new to it. We considered the geographic patterns of demographics, competition, complementary retail, and other inputs to answer the question, “If they were to rebuild their store network over again, how many stores would they have and where would they be?”
The bad news was that the optimal store deployment was very different from their current reality. They had nearly the right number of stores, but many were in the wrong places. Many stores were in trade areas with weak demographics. Some units were too close together and cannibalized one another and many of the highest potential trade areas had no stores at all.
The good news was that they now knew the problem in this metro was not promotion or personnel but place. Our optimized network became their plan of action. Now that they knew which stores needed to be where, they methodically rebuilt their inefficient store network into one which could realize the full potential of this metro.