Every industry has challenges surrounding the scale and scope of its brick and mortar presence.
Whether they’re evaluating the performance of retail stores, healthcare clinics or bank branches, determining how to maximize foot-traffic and brand presence is an ongoing challenge and a moving target for most organizations. Despite disruption, foot traffic still drives a significant share of business for retail with 71% of shoppers spending more than $50 in a store, compared to 54% spending as much shopping online. In banking, more than 73% of Gen Y visited a branch to open an account, and despite the expansion of telemedicine, most patients will still visit some type of clinic for their care.
Regardless of industry, most organizations today are struggling to keep up with an evolving landscape of innovation and competition. To be sure, there is digital disruption to contend with, but customer demographics are also shifting, along with changes within geographic areas, making where to keep and put stores and how to maximize their performance some of the most pressing challenges facing brands with any sort of physical presence. Complicating matters even further, every organization has numerous stakeholders. In banking, for example, those stakeholders extend from the board to branch, all with differing ideas about how to make the most of the retail banking experience.
To help decision-makers understand what’s involved in optimizing their physical network of retail locations, we’ve developed an ROI [return-on-investment] roadmap with four key categories for consideration. This guide will help managers begin the process for creating and customizing their own strategic plan for assessing and augmenting their brand’s physical footprint.
1) Evaluating Experience
The objective for any physical location – be it a retail store, bank branch or healthcare clinic – is balancing experience with efficiency. Brands want a space to be a harmonious marriage of form and function where shoppers can browse and buy, customers can get advice and access their money, and patients can have their health concerns addressed. But that doesn’t just happen all by itself. Assessing current conditions allows for prioritization and categorization of desired experiences in order to deploy an intentional customer journey. With our financial industry clients, for example, we use a method that incorporates physical branch surveys and qualitative analysis to develop a branch health index score.
2) Feasible Formats
Once brands have assessed what they have, next they look at types of delivery, some of which may expand or enhance current modes. For retail, that includes looking at what transactions are moving online versus those kept in-store, along with new delivery models like pop-up shops. For healthcare, that may include looking at quick clinics inside drugstores, multi-specialty facilities or optimizing traditional healthcare campuses to operate more efficiently. In financial services, the focus will be on right-sizing branches to determine where to put them – whether it’s full service, smaller format or only ITMs and ATMs. No matter the industry, each brand is looking for maximum impact with minimum spend.
3) Market Opportunity
Most brands have a deep understanding of who their current customers are, but may not know how to expand their reach to attract and engage more of their target demographic, both within their current service areas but also expanding into additional target markets. Many brands use consulting services for a deeper dive into market analysis to uncover where there are gaps and opportunities. What these brands are looking for is how to earn a fair share of business by store or branch. They may be lagging by $2 million of potential revenue in one market but $20 million up in another. What they need help with is prioritizing markets based on their own fair share market opportunity.
4) Needed Investment
After understanding the first key input – what is their fair share – brands now want to know how to take advantage of that opportunity. What is the lift or effort needed financially and otherwise to seize their fair share? While it’s often a significant investment, if there is enough ROI, now and in the long run, brands may find it’s worth it. It’s important to note that while much of what we have discussed about guided decision-making are quantifiable, metric models, building a roadmap for investment is as much based on qualitative measures like industry knowledge and proprietary expertise. Decisions of this scope should be driven by objective research informed by subjective experience.
To speak with one of our market consulting experts or to learn more about how to build an investment roadmap, contact us at firstname.lastname@example.org.