Store network optimization of the Nordic's largest discount retailer

"Together with Houston Analytics we were able to model our 2020 store location network. Our co-operation was very smooth and the knowledge we gained thanks to analytics will be very useful for IPO and everyday decision-making."

Jari Laine

Director, Business Development, Tokmanni Group Oyj

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Validated sales potential accuracy for new- store opening

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Based on predictive analytics pinpointed most prominent new store locations,their recommended sizes and assortment

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weeks throughput time

Executive summary

Tokmanni Group Oyj is the largest discount retailer in the Nordics with over 150 stores in Finland. In preparations for its IPO it needed to establish the ideal store network for 2020, including the number of stores and their locations, and the concepts for each location.

With predictive analytics Houston Analytics pinpointed 55 new store locations, their recommended sizes and assortment. Validated sales potential accuracy for new-store opening was 98%

Challenge

Tokmanni’s strategy was to expand its existing store network.

To make informed decisions, they needed the ability to analyze the market potential for expansion strategy and pinpoint the most profitable locations, effective store sizes & recommended local assortment to support profitable growth.

Solution

Houston Analytics created detailed data model as a basis of the work, including demographics, purchase behavior, existing store network sales performance and competition data.

With advanced analytics analyzed Tokmanni’s existing store network and how their performance is affected by demographic data and nearby competition.

Pinpointed most prominent locations for new store openings, delivered recommendations for their assortment and forecasted sales.

Visualized results using virtual maps for easy-to-use, understandable presentations.

Results

The modelling produced a clear view of Tokmanni’s potential expansion to new locations and of the alternative concepts most suitable for them.
Based on predictive analytics, pinpointed 55 most prominent new store locations and their recommended sizes and assortment.

Validated sales potential accuracy for new-store opening was 98%.
In addition, a comparison of the over- and underperformers of the current store network with the potential of their catchment areas was generated.