Eyewear category in India is a 70% unbranded category. Brand X belongs to the remaining 30% i.e. the branded segment. A leader in the branded segment since its inception in 2007, Brand X had been growing steadily. The brand now faced the challenge of figuring out how to bring about the 2nd phase of growth.
Retail Expansion was the obvious solution. The client had initially planned to open at least 100 new stores which would mean an investment of Rs.60-70 crores. But there without no clear assurance on the ROI from it.
There was no clarity on the right markets for expansion, the number of new stores required and ways to maximise returns from the existing stores.
We analysed these challenges by looking at:
· Market Prioritization
· Market Segmentation
We used a combination of statistical techniques like factor analysis, BMA (Bayesian Model Average), Multivariate regression and Cluster analysis, to obtain robust results.
Our analysis pointed out to the client that the brand needs to focus only on 57 new stores / markets as the existing markets still had the potential to open 42 new stores. This helped in further reducing the client’s investment for the initial R&D and other basic costs of entering new markets. The study also gave the brand, a perspective on markets / stores to focus for a certain kind of product, effect of competition, role of types of stores and the localities to focus on.
This boosted client’s confidence in taking difficult decisions, opening up windows to future conversations on using Data effectively.