Stories of our impact
Location, location, location
Location, location, location. It’s the number one rule in residential property, and today it reaches far beyond housing as it’s become a powerful driver in any business with a physical presence. At Deloitte, we’ve developed an innovative tool to help retailers maximise the value of their estate. Find out below how it works and how it has helped one of our clients to plan its location strategy.
Clients are always asking us about how they can maximise the value of their physical estate. Are we operating in the right market? Are our shops in the right locations? Where are our competitors or complementary retailers? We wanted to help them understand the power of location through location analytics – an offering that helps advise organisations on where to open and close branches. This is how L3 (standing for ‘Location, Location, Location’) was born.
By combining multiple data sources on supply and demand, we’ve created an automated, visual analytics solution that gives clients insight at their fingertips. It allows high street retailers to look at their estate, their competitors’ estates, and the demographics each of their branches is serving, to identify where to open, where to close, and where to alter their offering. So far, we’ve used the product to advise pubs, restaurants, gyms, banks, opticians and even a London borough on their location strategy.
Give me an example
Last year, we demonstrated L3 to PureGym, a rapidly expanding fitness chain in the UK, to show it how it could benefit from relevant location analysis for its industry – think comparisons with competitors’ estates, consumer demographics and micromarkets around gym locations. We then built a bespoke location strategy solution for the client, carrying out initial regression analysis (a way of sorting out which variables have the biggest impact) to understand the factors that impact revenue for the group’s existing gym sites.
Then, it was time to extrapolate this model across the UK to forecast revenue for around 50,000 potential new gym locations. The solution continuously informs PureGym’s location strategy by recommending the locations that are likely to deliver the highest revenue.
After a strong first year, we’ve got some exciting developments planned for L3 in the near future, including international expansion across our North West Europe markets. We’re also always on the lookout for new data sources that can enhance the insight we provide to our clients through L3. One of our most exciting new projects is working with a large payments provider to build in anonymised transactional data that will help us to understand online and offline customer spend across all retail industries in any given location. This will provide us with a new level of insight on market headroom, competitor benchmarking and customer behaviour.