Data Science & IA

Commercial location evaluation model

The challenge

Our client, a multi-brand holding company, was expanding its formats towards “stand-alone” stores and this decision implied a relevant change in the formats under which it had traditionally developed its business (e.g. shopping malls, subway stations, bus stations, etc.). Being a different business model, the need to incorporate analysis that considered several variables that could contribute to make the decision in a robust way was necessary. For this, the Brain Food team was asked to generate a model to evaluate the different locations and support the decision making for the choice of a new point of sale, evaluating the economic potential of different locations (SitePlanning).

New solution includes the same features as the previous tool but at half the original cost

The strategy

The Brain Food team generated a location attraction model based on Jensen’s Model, using available geo data and isochron analysis tools. A projection of future store sales was included, and a PowerBI report was implemented to make available the points consulted by the user.

An automated mathematical model was also developed that integrates multiple variables such as census data, commercial, macroeconomic, sectorial, etc. to evaluate the attractiveness of all available commercial locations.

Finally, a predictive sales model was generated to complement the first model, integrating all available information (e.g., similar local sales data, competition in the sector, per capita income, spending by category, etc.). Mapping and modeling applications were integrated into a visualization tool to dynamically evaluate the proposed locations.

Location model

delivers recommended locations for premises

Data model

integrates different data sources for location optimization

Prediction model

sales supplement information on locations

The achievements

Assisted by an attraction model developed with more than 70,000 stores distributed in the city of Santiago and a sales projection model for positions under evaluation, a report was delivered that assists in the consultation and exploration of dozens of new locations for the holding company. During the survey stage, the model was evaluated in 3 different cities (Temuco, Osorno, Viña del Mar), thus validating the possibilities of expanding the scope of the tool to evaluate locations in other regions of the country.