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Expensive & Scarce Real Estate — One of the biggest problems is the fact that quality real estate meeting your business needs is often very difficult to find or very costly. This is due to the fact that rapid growth has lead to an increase in competition, which has inflated prices. For prime real estate, you’ll often end up in a bidding war with competitors, driving prices up further. Good sites get snatched up very quickly, so your time to validate new sites needs to be fast to prevent a lost opportunity.
Urgency to move quickly on real estate creates a rushed approval process, without the proper analysis to support. It also sabotages the success of a viable development pipeline.
Complicated Assortment Planning — The root of many of the problems faced by retailers is the lack of quality market data to make more informed decisions. Without a good understanding of an area in terms of its population (daytime population, household number, wealth segmentation, etc), it’s hard to determine the right products for the area. Planners use a guess and check system based on what is doing well, and what is not. This creates wasted time and resources used to tune product mixes based on the performance over time.
Difficult Strategic Expansion Planning — Without readily available market data, it’s difficult for development teams use a macro-perspective and strategically create a plan to gain more market share. Without market data (demographic segmentation of populations, along with business points of interest), it’s very difficult to determine the size of a market and estimate potential.
Tracking competition adds an additional layer of complexity, since competing brands open/move/close retail locations frequently. Solving these challenges requires market data at macro and micro-levels to gain insight. Tools and services that consume this data are needed to provide meaningful output to gain additional clarity, and help expansion teams make better decisions.