The Leader - November/December 2007 - (Page 50)

u s I N G locat I oN IN tellIG eNce to reIN ve N t fraNch I ses: Da I ry quee N t astes sI te select Io N s u c c e s s Utilizing a location intelligent solution such as AnySite® from Pitney Bowes MapInfo, an easy-use, customizable Internet-based mapping and site reporting application, retail and restaurant organizations can analyze the relationship between store performance and market trade area demographic characteristics. The Concept Evolution team uses this analysis to recommend a move or expansion for a Dairy Queen franchise – or simply to stay put. For example, one franchise owner was considering bulldozing his existing restaurant and building a new, updated facility nearby. The Concept Evolution team examined population distribution, income levels and traffic patterns in the area and saw that the existing restaurant was already ideally located. Rebuilding elsewhere would not likely improve sales – and might actually hurt so the team determined that the best solution was to remodel. eNsurING each store matches NeIGhborhooD tastes In evaluating Dairy Queen franchises, the Concept Evolution team distinguishes between “destination” restaurants and “impulse” locations. To capture the customer who will stop on an impulse while driving by, a franchise should have high visibility in a welltrafficked area. But there are also Dairy Queen locations in many communities and neighborhoods that become regular destinations for the people living nearby, so the visibility and specific location of these restaurants isn’t quite as important. The Concept Evolution team helps franchise owners determine the right concepts for their locations. Should a restaurant be a classic Dairy Queen walk-up, focusing on Blizzards, Peanut Buster Parfaits and other frozen treats? Or can the location support a full Dairy Queen Grill & Chill® restaurant, with its extensive menu of burgers, hot dogs, fries, salads and more? The answer often lies in comparing the area’s population and traffic with how well served the area already is with other competitive restaurants, which location intelligence enables real estate professionals to do. Recently the Concept Evolution team advised a franchise owner concerned with results from his current restaurant’s lunch time food sales. The franchisee’s initial inclination was to step up marketing, which meant running more ads with more coupons, to help drive traffic. However, an AnySite analysis showed that the trade area matched the behavior of a traditional “bedroom community,” with limited lunchtime demand or other significant retail activity during the day. As a result of this knowledge, the franchisee is working to tweak his location’s offerings to focus more on satisfying after-work, afterschool and after-dinner crowds. By being more location intelligent, IDQ’s Concept Evolution team can gain a quick grasp of population distribution and traffic patterns for a specific Dairy Queen location’s trade area. With this insight in hand, IDQ can advise the franchise owner on how to optimize sales performance – whether it involves expanding or remodeling, moving or rebuilding, modifying the menu or keeping the restaurant as is. IDQ is also exploring the use of predictive analytics to develop a custom model for advanced site selection and sales forecasting. If $500,000 is generated in annual sales from a particular location, but the forecasting model finds there is potential for $1 million in annual sales within the trade area, the Concept Evolution team, the operations team, and the franchisee can work together to both recognize the opportunity and implement strategies to optimize the restaurant’s sales performance without adversely impacting other DQ restaurants. beING locatIoN INtellIGeNt: mIxING Data, softWare aND research Major retailers and restaurants, such as DQ, face the need to attain constant year-over-year, quarter-over-quarter growth, which requires establishing and opening new stores, sometimes dozens of them a year. Each new store site must be assessed in terms of market potential, competition and the potential for cannibalization of sales from other stores in the chain. In order to accomplish these requirements in an efficient, scientific and repeatable manner, businesses need to be more location intelligent with their site selection and overall business planning process. Often, the best approach is a mixture of strategy (the need to open new stores) and tactics (where and when to open them) into one overall process. For this analysis, organizations need to have very powerful mapping, modeling and data management capability – but number crunching and software aren’t enough by themselves. To be successful, businesses also need practitioners, people who really understand the retail industry and its unique demands. These experts enable businesses to identify, capture and research the neighborhood characteristics and market trends that define buying behavior and what consumers purchase Ultimately, a retailer or restaurant 2 0 0 7 the le aDe r 50 November / December

Table of Contents Feed for the Digital Edition of The Leader - November/December 2007

The Leader - November/December 2007 Leadership Contents Message from the CEO Real Estate in the News Investing in India 110 to One Smaller Workspaces, Better Workspaces Innovating the Workplace Through Design Sustainability and Energy Efficiency Getting It Right Using Location Intelligence to Reinvent Franchises Philips International’s Ron Blanken CB Richard Ellis’ Karen Ellzey The State of Louisiana’s Mike Olivier Industry Tracker Economic Developer Directory Discovery Forum Findings Career Development Emerging Leader Economic Development in the News A Look Ahead Executive Development Spotlight

The Leader - November/December 2007

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