The optimal point of sale network

What is the best network configuration for achieving the strategic objectives?

For many companies, the point of sale network is the result of their history and development. The network grows gradually over the years as opportunities arise. Consequently, a point of sale network is never “optimal”. In other words, the points of sale are not placed in such a way as to maximise market share or service quality with a minimum number of points of sale.

When an optimal network is desired, SIRIUS Insight takes care to get close to the “optimal frontier” that gives, for example, the best market share for each size of a point of sale network.

The recommended optimal network takes account of the company’s strategic objectives:

  • Restructuring: maintaining the market share or service quality while decreasing the number of points of sale.
  • Update: increasing the market share by relocating and slightly decreasing the number of points of sale.
  • Relocation: maintaining the market share or service quality with the same number of points of sale.
  • Expansion: increasing the number of points of sale and the market share.

Creation of a development strategy for your optimal network

The method used for finding the optimal network determines the number and location of points of sale that allow you to achieve your company’s strategic objectives. In addition, the techniques used make it possible to develop multiple ideal configuration scenarios for your network in the market.

The optimisation model also takes different types of constraints into account: points of sale that cannot move, footfall thresholds, a minimum turnover per point of sale, the company’s expertise and its knowledge of its current network, etc.

At every stage, the model is capable of re-examining all the proposals made. This makes it possible to actually construct an optimal network, even when the number of points of sale or the constraints change.

The culmination of the geomarketing study is a master plan with clear recommendations for the optimal deployment of your point of sale network.

How to read these illustrations?

The first graph shows how a point of sale network can approach the “optimal frontier” represented by a red curve. The horizontal axis represents the size of the point of sale network, while the vertical axis represents its result, for example the market share or the service quality.

An optimal network sees its market share increase according to the number of points of sale until it levels off.

The company’s strategic objectives will determine how the network will approach this optimal curve or “frontier”.

Why develop an optimal point of sale network?

  1. Have the best development strategy for your point of sale network.
  2. Obtain a quantified and objective assessment of the results of each envisaged reorganisation.
  3. Minimise the costs associated with your point of sale network.
  4. Reduce cannibalisation.
  5. Roll out the good point of sale formats to the most favourable places.
  6. Increase your market share.
  7. Obtain better coverage of the market potential.
  8. Increase the return on investment of your point of sale network.

Would you like more information about this study?

Movie: what is an optimal point of sale network?