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Location is one of the most important factors influencing the sales performance of a retail business. To improve real estate decisions, Quantitative Analysis (QA) offers a range of analytical services:
- Site models
- Site sales forecasts
- Market potential analyses
- Cannibalization studies
A site model is the first step of these analyses, because a site model identifies and quantifies the numerous factors impacting store sales. The primary use of a model is to forecast sales of new sites, but it can also be used to identify geographic areas with high sales potential and to adddress cannibalization issues.
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Site Models: Your First Step Toward More Accurate Sales Forecasts
A site forecasting model can improve the accuracy of sales forecasts. Through comprehensive statistical analysis of your current locations and trade area data such as retail businesses, daytime population, demographics, and competition, a model identifies and quantifies the top sales drivers. With this knowledge, better site decisions are made immediately. By statistically weighting the factors impacting sales, the model formula provides objective, reliable sales forecasts for prospective sites.
In short, site models learn from current locations to forecast sales of new sites. With this site evaluation tool, you can achieve higher sales from your new stores.
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Market Potential Analyses
If sites are not yet identified, model results can be used to identify areas with high sales potential as a first step in site selection. Data for hundreds to thousands of geographies is analyzed to identify areas with the most strengths and fewest weaknesses. The areas identified are ranked and mapped in order of sales potential, providing a roadmap to the best opportunities.
Market analysis maps highlight all areas with high sales potential, which focuses the site selection process, improves market planning, and ensures no high potential areas are inadvertently overlooked.
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Site Sales Forecasts
If sites have already been identified, the model formula is used to provide objective, reliable sales forecasts for decision-making. Trade area and other data is extracted for each site, and the site is benchmarked against current locations. A sales forecast is provided that balances the site's strengths and weaknesses. You can then change the data and assumptions, such as adding a competitor or adjusting site attributes, to determine how the forecast would adjust.
In short, a site forecast provides a comprehensive assessment of site strengths and weaknesses on variables that impact sales the most.
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