Key results
CHALLENGE
Need to expand store network
Tokmanni and Houston Analytics, part of Unikie, have partnered to support Tokmanni’s strategy to expand its existing store network.
To make informed decisions, the company needed to analyze the market potential for expansion strategy and pinpoint the most profitable locations, effective store sizes and recommended local assortment to support profitable growth.
The project aimed at supporting the planning process of new sites, generating detailed information basis for individual locations and enhancing the understanding of current store network performance and their drivers.
SOLUTION
AI & Advanced analytics to identify new locations
Houston Analytics, part of Unikie, created a detailed data model as a basis of the work, including current store network data on locations and concept, current network historical sales data by store with break-down to product sub-categories, survey data for estimating store catchment areas, competitor data with locations, detailed demographics data and external data such as Statistic Finland’s grid database.
Advanced analytics was applied to Tokmanni’s existing store network and how their performance is affected by demographic data and nearby competition.
To help identify prominent new locations, relevant nearby competitor presence as well as detailed population demographics within the estimated catchment area was analyzed and put on 250×250 meter map grid covering the entire country. As another variable, credible sales forecasts were generated for each map grip. This information was to be used for evaluation site profitability calculations.
All results were visualized using virtual maps as an easy-to-use user interface.
RESULTS
Optimized network & Improved performance
The modelling produced a clear view of Tokmanni’s potential expansion to new locations and of the alternative concepts most suitable for them.
Based on predictive analytics, 55 most prominent new store locations and their recommended sizes and assortment were pinpointed.
Validated sales potential accuracy for new-store opening was 98%.
With a better understanding of current store network performance and its drivers, each locations’ performance potential and both current as well as potential category and subcategory performance by location, as well as the assortment of each store was optimized.
Thanks to the new store locations and improved performance of existing stores, Tokmanni is on profitable growth trajectory.
