The client – a leading Australian department store chain – came to us with two key questions: What is the optimal allocation of department and category space by store (on current or future store space)? And, to guide space handback negotiations, what total size for each store should be targeted for optimal profitability?
Our first step was to group stores into clusters that reflected distinct customer groups, markets and store types, each with differing category demand patterns.
We built a category space optimisation model, which identified significant opportunities to move space from lower to higher productivity areas across and within departments.
We assessed the relationship between space costs and margin improvement opportunity for each store, which identified potential for double-digit percentage space handbacks.
Lastly, we modelled optimal use of space for a five-year future scenario to account for margin forecasts and rental projections.
We identified profit opportunity totaling more than AU$50m through space-related cost reductions and gross profit optimisation from category resets.
We identified a 4-5% sales and margin growth opportunity for beauty retailer through ensuring the best available brands are selected for each store.
With Covid-19 upending shopping patterns, we helped a UK food retailer adapt its macro space to adapt to increased online sales
We identified short term opportunities worth AU$3m, or 1% of the client’s current margin, and longer-term potential to deliver up to +25% sales growth.
We optimised floorplan flows and adjacencies to deliver a c.2% stronger sales and margin growth
We identified financial opportunities totaling HK$190m for a health and beauty retailer based in Hong Kong and Macau.
We helped a leading UK news, stationery and book retailer implement aggressive pricing to gain market share in heavily competed departments.
We developed store clusters for a leading Australian beauty retailer to optimise store space based on demand drivers and performance.