IHL Group, a global retail research firm, predicted that North American retailers will open 12,663 stores and close 8,828 stores in 2018, for a net increase of 3,835 store locations. The president, Greg Buzek, commented that restaurant retailers are experiencing some of the greatest growth.
This sector is not without its challenges however, a more exacting consumer coupled with an evolving retail landscape means companies are turning to technology to gain that competitive edge. We have looked at a few well-known franchises to see how LI is helping them to access market data on demand, predict sales performance, measure convenience and manage territories and trading areas more efficiently.
Yum! Brands is an American fast food giant operating several global fast food chains such as KFC, Taco Bell and Pizza Hut. With over 1.5 million employees and more than 48,000 stores in over 140 countries, they are one of the world’s leading franchises.
Prior to adopting location intelligence (LI) software, Yum! Brands managed their store analytics and reporting in disparate systems and Excel files. Each region licensed its own project management solution and data sets. The implementation of a powerful LI solution supported the growth of their franchise network. The company now uses LI to visualise its network across different geographies. It has one system that can produce in-depth demographic reports across 140 countries. LI software has given senior management a single view of its network, allowing for greater consistency and more informed insights. These days, they open, on average, eight new stores per day and LI software plays a pivotal role in this process.
Founded in 1950, Dunkin’ Donuts (now known as just Dunkin’) is an iconic US brand and one of America’s favourite coffee and donut shops. The brand has more than 12,600 restaurants in 46 countries worldwide. According to a recent case study carried out by leading US influencer marketing agency Mediakix, 70 million Dunkin’ Donuts were consumed in the US last year, and over $300 million was generated in revenue through coffee sales.
This kind of success did not come without challenges. Continued growth and an evolving retail landscape gave the company reason to re-evaluate their store development processes. Like Yum! Brands, Dunkin’ Donuts were juggling numerous systems and processes across several geographical locations. They also had issues around sales forecasting. As such, it was important that they found a better solution to manage their franchise network.
When Dunkin’ Donuts began this work with LI provider Tango Analytics, they were opening, on average, 500 stores per year. They utilised LI software to make better-informed decisions while saving 17,000 hours annually by investing in more efficient site analysis and sales forecasting software. They also noticed that some of their store trading areas had changed dramatically over the past 50 years, and, in some cases, what was once considered a good location was not any longer. With the use of location intelligent tools, they now had the capabilities to react to these changes, whether that meant refurbishing existing locations or relocating stores altogether.
With Dunkin’ planning to open approximately 1000 net new locations in the US by 2020, LI software is sure to play a vital role in getting these new stores open faster, cheaper and with lower investment risk.
Domino’s delivers more than 2 million pizzas a day worldwide and has over 15,900 stores across more than 80 international markets. It is up there with the franchise powerhouses!
Like many fast food franchises, one major challenge they faced was outlining store territories for its respective franchisees. Unbalanced sales territories can negatively impact a franchise’s brand, leading to disputes and poor customer service. Domino’s highlighted this as a major risk when optimising their geographical footprint. Previously, their territory management was carried out in spreadsheets, which meant that it could take weeks to complete, not to mention the data was rarely updated.
Domino’s decided LI software was the best way to manage this process going forward. Having access to the most up-to-date market data such as local area demographics, drive time information and competitor locations meant they no longer had to spend hours messing around with spreadsheets. All this data is now managed and updated by the software vendor, so senior management can concentrate on expansion. This was only half the solution. When customers placed an order, they still needed to be directed to their nearest store. A geocoding API was used to solve this issue. When the customer enters an address into the Domino’s ordering system (in the app or online) the order now gets directed to the store within that territory. This may seem like a trivial process, but the structured address data that they now collect can be used for customer analysis and targetted geo-marketing.
@ 2019 Gamma.ie by Chris Davies
Gamma has over 20 years’ experience delivering LI solutions to organisations of all sizes. We understand that in retail, the cost of one bad store decision can be huge on your bottom line.
Most real estate professionals can find you a good location, but when you find yourself choosing between several locations that look the same, LI software is the fastest, safest and most cost-effective solution for you. When those perfect sites become harder to find, Storecast™ can find you the next best sites, which could potentially have lower rents and a better chance of succeeding. Whether you are looking to grow from one store to 10, or from 10 stores to 1000, Gamma has a solution for you. Whether you want to measure the impact that competition is having on your store network, analyse customer sales, forecast revenues or optimise territories, our team of LI specialists can support you.