A data framework ensures a holistic approach to retail network optimization in South Africa

Over many years of research in the retail sector, the concept of the Diamond of Spatial Network Analysis was developed. The Diamond consists of four main data components - demand, supply, access and consumer behavior.

Demand looks at who the target market is for a particular retail sector and requires in many instances, the development of unique geospatial datasets. A key parameter of demand is capacity, which is the number of people required in the target market for retail outlets of different sizes and types to be financially viable. Another key parameter is travel time, which is the shortest possible distance that customers can travel to get access to a retail outlet.

Supply is about understanding where a brand’s existing retail outlets are located as well as the location of competitive outlets. Another aspect of supply is understanding where preferred sites are located. Preferred sites are places where retail outlets should be located to access the maximum number of customers from the target market (eg major road intersections, motor hubs and near mall).

Access or accessibility is the connecting of supply and demand across a transport network using different modes of transport. Consumer behavior is about understanding brand preferences within the target market in different geographic areas.

This data framework provides a more holistic approach to identifying the optimum number and location of outlets in the retail network. This approach far surpasses methods that are presently being used in the retail sector in South Africa, such as gap analysis or profiling.

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