Unlocking Successful Retail Network Growth

Retail network growth isn’t just about opening more stores. With the right insights, you can grow strategically, reduce risk, and drive better performance. GapMaps has helped clients across the Asia Pacific and Middle East achieve this through effective market planning and growth strategies. While every network is unique, there are key steps to follow when developing a growth plan or market planning strategy:

1. Benchmark Your Network

Understand how your network performs. Categorise your stores by location types (e.g., shopping malls, commercial worker precincts, shopping strips) and format types across major geographies. Create performance insights such as average sales and transactions for each grouping. Identify outliers and ask, “Why?” These insights reveal how your network performs at different levels across the market. 

2. Identify Catchment Factors that are Driving Performance

What catchment factors help explain sales performance across each network grouping? Set aside operational factors and focus on the catchment factors. Tools like correlation analysis, multivariable regression, and multivariate analysis can be very helpful for larger networks, though they are not essential for smaller ones. Consider factors such as catchment population size and demographics, local consumer spending power, surrounding retail intensity, nearby competitors (more competition isn’t always bad), foot traffic activity, retail spending data, and for B2B businesses the number and size of target-profile businesses. Importantly, profile your top-performing and bottom-performing store catchments and articulate the differences. 

3. Identify and Prioritise Optimal Locations

Use the catchment profiles of high-performing stores to identify new catchments that share similar attributes but don’t yet have one of your stores. Prioritise location options based on these important catchment variables. Ideally, develop a simple ranking algorithm that considers all relevant catchment characteristics and weights them according to their importance. Focus your real estate efforts on the top-ranked options—these are where you’ll find the highest revenue and lowest risk opportunities. 

4. Get the Real Estate Basics Right

Access, visibility, car parking, retail adjacencies, building size, and floor plan are all key influencers of store performance. Even in a strong catchment, a store will underperform if these basics aren’t right. 

5. Identify and Fix Poor Performers

Poor-performing stores in strong catchments need attention. Ask: what’s causing the performance gap? If it’s operational or local area marketing, it can be improved. If it’s access, visibility, or parking, relocation may be necessary. A poor-performing store in a low-quality catchment, closure is likely the best option. Focus your time and investment on opening new stores in great locations and making good stores great. Avoid investing heavily in underperforming stores in poor catchments Poor-performing stores in strong catchments need attention.

For small, medium or large retail networks there’s enormous value to be gained through the development of an effective and insightful network plan. Ready to unlock growth in the right locations? Get in touch and let’s explore how GapMaps can support you.