the power of simulating buying flows
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by Dieter Debels, Managing Director, Geo Intelligence, BelgiumTRANSCRIPT
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www.geointelligence.be
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Simulation of buying flowsApproach and Possibilities
[email protected] (0495/44 24 01)
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Introduction Geo Intelligence
Introduction ‘Simulation of buying flows’
Possibilities with the Point-Of-Sales Planner
Agenda
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About us
Geo Intelligence is…
…an innovating and flexible partner for all parties that get involved with analyses of retail real estates. By combining geographical data, methodology, automation and business knowledge in an appropriate way, we succeed in giving well-founded answers on fundamental questions.
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Our history
2008
Development of a new vision on geomarketing
Market exploration and development of
methodology and software
2009
2010
2011
2012
2013
Research funding (Baekeland) received
to improve our methodologies
Transition to a professional organisation with ten highly educated geomarketing experts
Proof of concept with retailers and project developers
Development of a web based
environment & customer base
expansion
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Retail
Our references
Government
Real Estate
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Introduction Geo Intelligence
Introduction ‘Simulation of buying flows’
Possibilities with the Point-Of-Sales Planner
Agenda
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Simulation of buying flows
Modelling buying flows
Estimating spending…
…for a market segment… Groceries, sports, low or high fashion, …
€, nr of people, nr of contracts, % of total spending
… from each district …19.700 blocks, 5.500 BD-zones or 1.148 zipcodes
… to all competing shops surrounding
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Example: Estimated monetary spending for Electronics in the BD-zone “ZELE 03B”
Simulation and modelling of buying flows
Suppose that we can estimate this spending with high precision, then…
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… we can benchmark store performance
… optimize regional marketing
… accurately assess the impact of a new store opening/a closure/ a surface modification on the existing network.
… optimize an entire network
Suppose that we can estimate this spending with high precision, then…
… But first we have to get there!
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Click icon to add picture Note: We hold a 90% accuracy guarantee (on shoplevel) in all our contracts (which is better than 100%!)
Definition of an accurate buying flow model
An accurate model produces buying flows …
…that highly correspond to real buying flows…
…by means of clear and logical decision parameters.
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Define your market segment(s)Step 1
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Steps towards an accurate buying flow model
Define your market segment(s)Step 1
Build up your market segment(s) from the supply sideStep 2
Witgoed Inbouwelektro Bruingoed Multimedia
Dagelijkse aankopen
Periodieke aankopen
Uitzonderlijke aankopen
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– Contains all shops that are fully or partly competitive with your own business
How to construct an accurate buying flow model
Build up your market segment(s) from the supply sideStep 2
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Define your market segment(s)Step 1
Click icon to add picture
Steps towards an accurate buying flow model
Define your market segment(s)Step 1
Build up your market segment(s) from the supply sideStep 2
Add as much real sales information as possibleStep 3
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For your own segments to a test-environment
– For own shops: Turnover per shop and origin of customers– For competitors: Global turnover per competitor
How to construct an accurate buying flow model
Real sales per own shop Real sales per competitor
Add as much real sales information as possibleStep 3
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Define your market segment(s)Step 1
Click icon to add picture
Steps towards an accurate buying flow model
Define your market segment(s)Step 1
Build up you market segment(s) from the supply sideStep 2
Add as much real sales information as possibleStep 3
Calculate the sales potential per zone (= Demand side)Step 4
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How to construct an accurate buying flow model
Calculate the sales potential per zone (= Demand side)Step 4
Real sales for owner XModeled sales for owner X
Poor districts in Belgium Rich districts in Belgium
Sale
s vo
lum
e fo
r ow
ner X
Modeled and real sales related to Wealth Indeces for owner X
Market reports/business knowledge
Potential formula per district: €300/yr*#families*…
Top
dow
n ap
proa
chBo
ttom
up
appr
oach
+ substitution! (non-allocated market)- non-triggered demand - non-modeled alternatives
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Define your market segment(s)Step 1
Click icon to add picture
Steps towards an accurate buying flow model
Define your market segment(s)Step 1
Build up you market segment(s) from the supply sideStep 2
Add as much real sales information as possibleStep 3
Calculate the sales potential per zone (= Demand side)Step 4
Allocate market potential per district to shops aroundStep 5
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How to construct an accurate buying flow model
Allocate market potential per district to shops aroundStep 5
Distance to the shops
• Real driving times
• Micro accessibility of the shops
• Penalties for crossing cultural barriers
Store attraction
• Shop characteristics (surface, visibility, …)
• Competive strength per owner
• Shopping area strength
Other important elements
• Management
• Temporary situations
• Geographical differences
• Cannibalization strength
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What’s the magic trick? Thanks to a transparant test environment we can • Monitor the accuracy of the model in 9 different views by comparing the model results with the
real sales information• Optimize the customer behaviour parameters• Promise a 90% accurate model with an incredible added value
How to construct an accurate buying flow model
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Introduction Geo Intelligence
Introduction ‘Simulation of buying flows’
Possibilities with the Point-Of-Sales Planner
Agenda
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Added value: Continuous monitoring proces– Measure management power, franchising power, regional power, shopconcept power,
location type power, … Return-On-Investment:
– Relevant for each customer– Depends on management power to take action!
Benchmark store performance
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Added value:– Challenge low hanging fruit in 2 directions
Return-On-Investment– For leaflet distributing retailers: 10% - 20% switches (start/stop), leading to
5%-10% increased efficiency
Optimize regional marketing
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Sales impact after opening/closing/relocating one or more shops– Own or competitors– Including cannibalisation on own shops and competition
Added value:– Cost savings: Own studywork = 3d work, 3rd party analysis = 3k€/case– Risk reduction: If it can save you from 1 wrong decision…– Communication power: Towards shareholders, investors, …
Return-On-Investment: In function of – #cases/year– cost/wrong decision
Impact analyses for case studies
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Calculate the future optimal network (in terms of ROI)
Added value– Best possible answer to one of the most important questions for retailers– Creates “out-of-the-box” ideas (e.g. 2vs1 scenarios, …)– Transparant view in all details
Return-On-Investment: Calculated into detail
Strategic optimal network
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How we work
Strategic Walk Case
Phase 1: Assessment
Strategic studies
Phase 2: Flexible partnership
Decision platform
Case studies
In-house platform
At your service
- Identify critical success factors- Benchmark shops/shopconcepts- Validate model
- Automate procedures - 2 case studies for potential locations
- OR …
- Unlimited use for case studies, benchmarking, internal communication, …
- Extend platform to answer in depth questions about impact of marketing, optimal split of every shop in departments,, optimal long term network, …
- On demand- 48hrs delivery time
- You will see opportunities
Strategic studies
Case studies
Case studies