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"PiinPoint has become an integral part of my role as Retail Analyst at Cushman & Wakefield Waterloo Region. The platform allows me to put together professional looking reports and provide clients with the insights they need to make real estate decisions.

I honestly don’t know how I would do my job effectively without PiinPoint."

Jessica McCabe, M.Ed.
Retail Analyst

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 Predicting Success in New Markets Part II: PiinPoint’s Marketmatch Methodology

Predicting Success in New Markets Part II: PiinPoint’s Marketmatch Methodology

Tom Peters, CRO

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March 17, 2022

Retail businesses are facing long-lasting impacts on their physical store performance due to changing consumer preferences, channel choice behaviours, and where consumers choose to live. This has accelerated e-commerce and digital transformation investments, and has forced retailers and restaurateurs to reimagine store formats and experiences. Successful brands are planning their real estate growth roadmap with a different lens. 

Developing a sound network expansion and optimization strategy and then executing that plan with speed and precision is critical for gaining or maintaining a competitive advantage while accessing the most desirable markets and real estate listings. 

There are many ways that speed to market benefits an organization: 

  • Increases the likelihood of identifying successful locations and achieving the desired ROI on real estate moves;
  • Provides access to markets and site listings before competitors, providing “first mover advantages”;
  • Attracts top tier operators by reducing risk and focusing on support systems for increased profit; 
  • Allows an organization to sell more multi-unit agreements by providing best in class location selection support; 
  • Increases real estate team productivity to get to quicker approval; and,
  • Increases negotiating power on highly desirable sites with a deeper knowledge of potential new sites. 

Capitalizing on these benefits through data-driven location intelligence allows the progressive organization to win in their market and drive return on investment!

Predicting White Space Market Performance

We provided an overview on how to predict success in new markets as Part I of this series. 

Making an uninformed decision on whether a city is a single or multi-unit market can leave money on the table if more than one opportunity exists. Knowing which markets are growing for an established brand and which factors are the key determinants to a successful expansion or infill decision requires a data-driven approach rather than a “gut-instinct” or experience-based approach. Using a data-driven approach promotes consistency in decision making, bias reduction, and speed to market. 

The factors that drive success

As we mentioned in Part I of this series, the factors that influence the value of a new market fall into one of four areas:

  1. Trade area profiles;
  2. Urban-rural profile of the trade area; 
  3. Consumer/customer preferences; and, 
  4. Competition and other retail profiles. 

PiinPoint’s’ Marketmatch Methodology 

The Marketmatch modelling process brings these four factors together to understand their direct and independent influence on store performance. 

A Marketmatch implementation uses multivariate statistical methods to identify the factors from each of the four categories of data mentioned above that statistically align with store performance of the existing store network. Specifically, PiinPoint identifies the attributes that have a positive relationship with the top performing stores in the network, as well as those that are related to the bottom performing stores in the network. The relationships are then built into a scoring algorithm (scorecard) that allows us to produce a score for trade areas of interest in Canada or the US. The score from the algorithm predicts the likelihood that a trade area will be in a market that is more likely to perform similarly to the “top performance cohort,” subject to factors outside of the real estate analyst’s control. The Marketmatch points become a data layer in the Piinpoint application that allow the analyst to “point and click” on any point in the layer or any combination of points and run a full analysis of multiple markets within minutes. 

This is a well designed process, and once complete, the scoring algorithm increases the speed and efficiency of the real estate analysis and the downstream approval process. 

Marketmatch Enables Speed to Market

What we hear from our clients and partners is that to be best in class, retail and franchise organizations turn to analytics-driven software planning solutions for real estate network planning to get a competitive advantage. Senior leaders are looking for these 5 key advantages over their competition in order to realize the benefits for their investment in their store network:

  1. Speed to decision: Helps real estate teams and executive level decision makers operate from the same playbook in order to make faster, more informed real estate decisions, and enables real estate teams to more quickly evaluate new site opportunities.
  2. Efficiency/Cost Reduction: Easily juggle multiple projects at once using an end-to-end process that makes the analyst and real estate team nimble and responsive.
  3. Data Driven: Get an unbiased view of what markets to prioritize and what sites to focus on and why. 
  4. Uncertainty and Bias Reduction: Eliminates guesswork and uncertainty, and promotes organizational consistency for the site approval process. Reduces bias/false narratives by eliminating sites that don't meet the minimum required data threshold.
  5. Internal & External Partners Collaboration: Gives real estate teams/franchisees/store operators a view into market opportunities to ensure that only quality site opportunities are submitted to the franchisor/retailer and provides broker partners a clear vision for how to best support the growth of their clients.

PiinPoint’s Marketmatch helps organizations identify new markets that improve speed to market, increase ROI, and de-risk the location choice.

Check out Marketmatch and our Keto Cafe case study to find out how we assist retailers and restaurant brands improve their real estate planning by helping them define their trade areas and produce a data-driven network roadmap.

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