FSP Retail Business Consultants Helping retailers make informed decisions
FSP RETAIL BUSINESS CONSULTANTS
Retailer Services The FSP approach is not simply about analysis. At its heart, FSP Directors are retailers and over 100 years of retailing experience is directed into every project to test, challenge and provide advice, before it is offered to clients. We share your passion for retailing.
Location Selection
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Brand & Consumer Research
October 26, 2015
Expansion Strategy
In addition FSP provides: Market Intelligence Competitor/ Cannibalisation Impact Analysis Customer Demand Forecasting Customer Profiling Concept Development
Turnover Estimation
FSP RETAIL BUSINESS CONSULTANTS
Retailer Clients FSP and sister company Pragma advise a variety of retailers including:
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FSP RETAIL BUSINESS CONSULTANTS
Example Retailer Case Studies
FSP RETAIL BUSINESS CONSULTANTS
Case Study: Global Sports Footwear Retailer Service : Location Strategy & Brand Awareness FSP was commissioned to assist with the search for an optimal location for a new flagship store, by providing insight into suitable London sub-markets.
The Challenge In order to strengthen its retail presence and grow brand-awareness in the UK, the client sought to establish a network of company stores, including a flagship ‘Experience’ store in London. The aim of this Experience store was to promote the brand’s wider range of lifestyle footwear and apparel, as well as celebrate its heritage of producing quality shoes for sport.
What We Did Customer Insight: FSP segmented and quantified customer demand using our unique FISH categorisation system. We gave detailed insight into key performance influencing factors including catchment populations and customer demographics. Understanding the catchment profiles and consumer Lifestages was imperative for pinpointing ideal store locations Location Selection: FSP identified key trading streets including competitor locations, existing channels of distribution and sub markets. FSP provided street summaries identifying important KPIs suited specifically for the client
Business Context The client is one of the world’s leading sports footwear brands. The brand has a strong reputation among serious sports enthusiasts, as well as those seeking a blend of performance and fashionability. Although the company has been manufacturing in Cumbria for 30 years, current UK distribution is primarily through specialist sports operators such as Sweatshop and generalists such as Schuh. 5
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Benchmarking: FSP identified, by location, areas of competition from sports retailers and footwear retailers and provided turnover and density estimations to help grade the opportunity for the client. Other data provided included: number or stores, FISH and price positioning, Zone A rental levels, estimated floor space, nearby tube stations, and breakdown of residents, workers and tourists
Result FSP submitted a list of recommendations based on the insights provided. The client was keen to follow and apply our insight into their roadmap strategy prior to instruction on a new store in London.
Case Study: Example Location Trading Report KPIs for Seven Dials, London 135,000
Total Selling Area (ft²) Estimated Retail Sales (£m) Average Sales Density (£/ft²)*
Neal Street
Urban Outfitters
Diesel
162 1,200
Average Selling Area (ft²)*
971
Assured Individual Retailers
12
Sports Retailers
6
Footwear Retailers
17
*Excluding Department Stores
Source: FSP/CES/GOAD
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FSP RETAIL BUSINESS CONSULTANTS
Case Study: Example Segmentation Analysis 70 60 Number of Retailers
Seven Dials is located to the north of Long Acre in London and includes brands such as Urban Outfitters, Nike, American Apparel and Superdry The area is home to Neal St, a specialist footwear destination which includes Offspring, Josef Siebel, Toms, Superga, Office and Size? The FISH mix is favourable, with high proportions of both Young and Assured retailers, however footfall is relatively low compared with other central London locations
50 40 30 20 10 0 Clothing & Footwear
C&F FISH Key Location Information 450
Footfall Index
26
Footwear Market Size (£m)
8
% Residents
46
% Tourists
50
% Workers
4 Covent Garden (11)
Nearby Tube Stations (Annual Exits, millions)
Household Goods
Leisure Goods
Department Stores
C&F Price
Classic 7% Family 14%
Zone A Rent (£/ft²)
Personal Goods
Food & Beverage
Others
Premium Lower 4% Middle / Value 2%
Young 34%
Middle 53%
Upper Middle 41%
Assured 45%
Leicester Square (20) Holborn (17) Source: FSP/CES/Nash Bond/Transport for London/NWEC
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FSP RETAIL BUSINESS CONSULTANTS
Case Study: Major Swedish Hardware Chain Service: UK Expansion Support FSP was commissioned to provide insight and direction as the client sought to expand their UK presence. They required an understanding of their UK shoppers and assistance in prioritising new locations.
The Challenge The client had developed a mature business in Scandinavia where their “shopper� was readily identified and successfully targeted. The challenge was translating this shopper into other markets, including the UK, and then ensuring that chosen locations were suitable. Expected turnovers were also reviewed, to check they fell in line with board expectations.
What We Did FSP delivered a suite of reports and supporting evidence to the clients UK team that could then be incorporated into their recommendations to the main board in Sweden. Shopper Profile: Using demographic profiling, FSP closely classified the pre identified client shopper and used this to create a demand surface. This allowed FSP to classify locations with high numbers of key shoppers
Business Context The client, a Swedish hardware store chain and mail-order firm that specialises in hardware, home, leisure, electrical and multimedia products. It is one of the biggest of its type in Scandinavia, with a total of approximately 180 stores. In 2008, the company opened its first UK retail store in Croydon, South London. It later opened 13 further stores across the country. 8
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Turnover Estimation: With detailed knowledge on catchment dynamics and market penetration, FSP was able to estimate site turnovers for the identified locations Benchmarking: FSP ranked identified locations against existing portfolio stores and competitors in terms of turnovers, catchment sizes and key customer profiles
Result FSP’s analysis highlighted how trading performance relates to factors such as competitor provision, catchment size and lifestyle preference for the brand offer. The top 250 sites, in terms of estimated turnover, were delivered to form their expansion strategy targets. The data was also used by marketing teams to assist activity and to build interest in their stores.
Case Study: Reporting Outputs
Modelled Customer Potential (k)
FSP supplied the client with a deck of supporting evidence for the UK expansion team to incorporate into recommendations for their Corporate Board. £450 £400 £350 £300 £250 £200 £150 £100 £50 £0
FSP identified specific location retail catchment potential
FSP ranked benchmark towns by expenditure
We constructed a scorecard methodology to help rank identified target locations. Client specific indicators were used to identify the optimum mix of attributes for any location.
Location
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Total Key Client % Key Client Shoppers Shoppers
No of % of Complimentary Complimentary Retailers Stores
% Multiple Total Client Ranking Client Ranking vs Clothing & Weighted (based upon Shopper Pop Footwear Client Score Ranking weights) Representations
Location A
3
6
28
8
1
201
1
12
Location B
23
2
10
9
23
283
2
34
Location C
7
7
16
20
48
334
3
16
Location D
24
32
18
7
1
379
4
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Case Study: A Leading Linen and Homeware Retailer Service : Concept Testing FSP was commissioned to help the client gain valuable insight into customer feedback on their new store concepts, packaging and product ranges.
The Challenge The client’s primary channels of distribution for the UK were department store and concession led. The challenge was to create a flagship stand alone store that would represent the brand to its full capacity whilst testing new concepts and products for future store roll out. Using qualitative research, FSP advised on the key requirements of consumers that would give the store the best chance of success. It was essential that the concept was in tune with the behaviour, merchandise expectation and locational requirements of key customer groups.
What We Did FSP worked closely with the client to identify the areas where qualitative research could support with detailed feedback. This was used in conjunction with desk- based analysis to provide a fully informed set of results.
Business Context The client specialises at retailing towels, bathrobes and bedlinen in stores throughout the UK. The company sells online and in Europe, the U.S. and Australia. The company has a long-term relationship with tennis, producing the towels used by players on court at Wimbledon since 1987. Their UK business is predominantly via department stores and concession stores and a small number of outlet centres.
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Qualitative research: FSP ran a series of focus group split by geographical location and family composition. Participants were hand picked, utilising a careful screening process to represent the brands true customers in key trading locations. Questions were closely in line with the required aspirations from the clients internal teams Customer profiling: FSP analysed existing customer postcode data by demographic profile, allowing an estimate of penetration by shopper type to be made. The ideal shopper could then be evaluated and was used to identify ideal benchmark locations for future store expansion, in light of current concession footprint and complementary retailers
Result The feedback was evaluated and presented with recommendations to the client’s board, where it was used to shape the location, look and feel of the brand throughout all its consumer touchpoints.
Case Study: Focus Group Output FSP was able to respond to and advise the client on the full range of aspects listed in their initial requirements . Recommendations not only related to the type of customer or location but went into greater depth to address key topics for them relating to product, packaging, customer service and store format.
FSP communicated the major motivators that influence the shopping behaviour and spending patterns of customers within client stores. The analysis helped the client to enhance not only the look and feel of the stores but to also address customer service improvements.
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Case Study: A British, Lifestyle Retailer Service : Location Selection, Turnover Estimation FSP was commissioned to provide insight and direction as the client sought to expand across the UK. They required assistance to prioritise a list of target locations. FSP constructed a bespoke and robust model to help identify potential new locations and to predict gross sales.
The Challenge The client had developed a portfolio with a diverse and varied mix of store locations. The model generated by FSP had to provide strong indicators of potential new store performance and comparable analysis for locations as varied as regional flagships to seaside towns.
What we did A robust and tangible model had to be developed by FSP to assist the selection process. Elements of this model are outlined below. Shopper Profile: Using demographic profiling, FSP classified the clients existing shoppers, and used this to create a demand surface. This allowed FSP to identify towns with high numbers of key shoppers – a key factor in identifying potential new sites
Business Context The client, a British fashion and lifestyle brand that sells clothing, footwear, accessories and home products inspired by British country lifestyles. The company has 99 retail stores in the UK with a turnover of over £117m. The brand has since expanded overseas with particularly successful sales in Germany and USA.
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Key Revenue drivers: A number of factors were tested against existing stores’ gross sales. Several factors were identified as important drivers of gross sales, these included: Floor space provision relative to market size Whether or not the town was an NSLSP Top 200 location Number of key shoppers in the catchment Number of residents aged 25-44 in the NSLSP catchment
Result FSP delivered a model that had a high degree of accuracy in predicting gross sales. We worked closely with the clients internal teams in producing a prioritised list of locations to focus on.
Case Study: Recommended locations FSP supplied the client with an interactive web based portal (DELV – Data Enlivenment and Visualisation) to provide key data and further understanding for each of the FSP identified locations. Shown are current stores (as of 2012), and potential new sites, identified by FSP When new sites are selected, a text box with key demographic characteristics is shown, allowing the client to view sites at a glance and prioritise stores based on a range of specified characteristics
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Pragma & St. Ives Group – Global Expertise
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Trading Performance
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Space Supportable
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Footfall Forecasts
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Commercial Performance
International Strategy • Brand Positioning
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Concept Development
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Tenant Mix
Financial Analysis & Modelling
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Customer Attitudes
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Customer Segmentation
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Catchment Analysis
Customer Insight
Brand & Concept Development
Market Analysis
Space Configuration & Planning
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Space Allocation & Utilisation
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Space Configuration
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Concept Generation & Mix
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Market Segmentation
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Market Projections
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Competitor Mapping
FSP RETAIL BUSINESS CONSULTANTS
Testimonials “FSP's retail experience has given us knowledge of the trading potential of new sites, while their clear advice on local market strategy has had a direct impact on our approach.” Mark Gregory, Managing Director
“I am very pleased to have given the approval to the research as this really does appear to me to be money well spent.” Robert Wood, Fund Manager, Continental European Real Estate
“I think this is an extremely good piece of work. The amount of insight relating to what customers want is amazing. You all did an excellent job.” Alexandra Petit , Group Head of Insight, Hammerson Plc
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FSP RETAIL BUSINESS CONSULTANTS
Simon Rosenberg Senior Consultant
FSP RETAIL BUSINESS CONSULTANTS
T +44(0)1949 474740 M +44(0)7495 638285 F +44(0)1494 474262
19 Manor Courtyard Hughenden Avenue High Wycombe UK, HP13 5RE
Simon@fspretail.com
T +44(0)1494 474740 F +44(0)1494 474262 fspretail@fspretail.com www.fspretail.com www.snap-shop.co.uk