Agenda► Introductions► Purpose of Retail Studies - Benefits► Retail Analysis Methodology► Retail Analysis for Investment► Retail Analysis and Customer Profiling► Community Impacts – Retail Spending► Questions
Venturus Ltd.► Founded as Nuguru in 2007► Name change in 2012► Staff-Christopher Doll, Eunice Washkowsky, and Thai Hoang► What we do - Facilitation, Strategic Planning, Investment Attraction, Corporate Finance, Feasibility Studies, Economic Studies, Marketing and Branding, Major Projects Planning, and Public Speaking
Clients► Clients – Cameco, PCS, University of Saskatchewan and Winnipeg, Municipalities including Saskatoon, North Battleford, Warman, and Dalmeny, Economic Development Agencies, Westcap Management/Golden Opportunities, Private Companies, First Nations, National Hotel Developers, and Value Added Processors
Retail Study Purpose► Three target markets: Entrepreneurs looking to identify new opportunities Existing business considering expansion Potential outside investors/companies through targeted investment attraction
Retail Analysis Methodology► Retail Analysis uses statistics, surveys, comparative spending analysis, gravitational models, and population models (local, regional and tourism behaviour) to provide information on how consumers behave in a particular area.
Retail Analysis Methodology► Statistics and Surveys► Acquisition of good statistical information is difficult as data availability for smaller populations is challenging due to privacy issues and rapid evolution of the retail market► Surveys are time consuming, expensive, and often incomplete. Usually based on retail sales dollars or square footage.
Retail Analysis Methodology► Statistics are most accurate at regional or city levels► Retail behaves on a regional basis in most markets anyway► Data for spending can be acquired on a household or per capita basis, but what information does that provide?
Retail Analysis Methodology► The existing data examines spending overall in a retail category, but we don’t at this point understand where the spending occurs or if it provides retail opportunities.► In order to better understand spending we use gravitational models like Reilly’s Law of Retail Gravitation
Reilly’s Law► Ok so what does it mean?► Basically a larger population has more retail “pull” than a smaller one so it determines the point at which a consumer will go to destination A or B based on the size of the market or population base► Can also be used (inverse equation) to determine where retail leakage in spending and percentage is most likely to occur
Reilly’s ExampleRegional Impact - North Battleford Population Spending by Retail CentreRetail Centre Retail $MM Effort Formula % of sales Total MMNorth Battleford 408.8 1 408.8 83.36 $408.80Lloydminster 928.2 9 11.45926 2.34 $9.55Saskatoon 4471 10 44.71 9.12 $37.27Edmonton 20452 35 16.69551 3.40 $13.92Calgary 21,776 70 4.444082 0.91 $3.70Regina 3,665 40 2.290471 0.47 $1.91Prince Albert 801 20 2.00125 0.41 $1.67 Total 490.4006 476.8226
Comparative Analysis► Data in each retail sector can be acquired for a given population and compared to other areas. Reduced to a per capita basis spending levels can be compared.► Spending can then be normalized based on income► Opportunities can be determined by under spending in a specific retail category and the market size
Comparative Analysis► So once the data has been filtered by Reilly’s Law, and comparative analysis and normalized spending specific opportunities in a market can be identified► The key is to ensure the market size is large enough to support the opportunity
Population Models► In some markets population models become more important and spending cannot be explained by Reilly’s alone► Markets with substantial regional and tourism populations may not behave typically► Las Vegas has a significantly outsized retail sector given its population base► Outlet malls are single largest tourism driver
Retail Analysis for Investment► Large retailers are interested in Saskatchewan but the market is difficult for them to assess.► Markets typically based on population blocks – one store per 500,000 etc.► Retailers need compelling proof of market size to enter Saskatchewan markets
Drivers of Success► There are two keys to investment attraction:► Potential investors are looking for a tailored package that addresses an opportunity specific to their industry.► Effective investm ent attraction requires identification of targets and direct contact w ith decision m akers.
Why Strategic Business Attraction► Past approaches: Incentive Competition Website - Passive Marketing Devine Intervention Government Handout
Not Just Retail► Targeted investment attraction works based on competitive and comparative advantages that can be determined through comparative analysis and direct contact with potential investors
Retail Analysis and Customer Profiling► Retail Analysis determines where consumers are spending their money and what they are buying► It determines how a market may behave differently from the norm► Kindersley for example has far too many hotels on a per capita basis but the market and consumers are behaving differently
Retail Analysis and Customer Profiling► Provides more ammunition for opportunity identification► Where would you expect to find this car?
Community Impacts► Retail Spending Analysis is used to determine the flow of spending► Leakage to other markets and online can be determined► Can show how many dollars are leaving a community and what percentage of spending occurs inside and outside the region
The Process - Summary► Process>Data Collection>Comparative Analysis>Spending Normalization>Reilly’s Law>Aggregation of total spending to determine opportunities► Other information Dollars spent or percentage spent in other communities Behaviour of spending in your region or community and how it differs from others
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