BrandScore – A proprietary scoring technology from TheRetailPlanet.com
BrandScore is a powerful technology that combines local demographics, consumer preferences and retail synergies to produce a single numeric measure representing the business potential and location quality of specific retail locations for each of the 3,000+ chain store operations contained in our database.
Comprehensive retailer and shopping center information have not been available in an accessible format until TheRetailPlanet.com developed BrandScore. The current BrandScore system requires over 2,500,000,000,000 trade area analyses. Using this volume of data, BrandScore measures the degree to which a specific retail brand is likely to succeed in a given location, based on four components. The components, in turn, are based on the key factors that drive sales performance:
The anchor for BrandScore is the Neighborhood component. The core premise is that retailers will generally perform better in locations where the trade area contains many households that use or prefer a specific brand versus neighborhoods where those customers are infrequent or not present. To achieve a high score, the location must have a healthy proportion of potential brand users living in the surrounding trade area.
The BrandScore Neighborhood component comes from a number of sources:
- Brand profiles that tie to lifestyle segments
- Social media data that define brand usage patterns
- Credit card transaction or point-of-sale (POS) data that connect to customer profiles
- Geographic and market-based brand models
- Scaling models based on brand similarity, and brand factors that cluster similar brands based on location or behavioral data
Retail Synergy is a powerful, intuitive concept that was one of the core principles underlying the development of the modern shopping center. Instead of driving all over town to visit multiple retailers, the concept was to put them under a single roof or in close proximity.
Synergy between two retailers simply means they work together in ways that help one another (in other words, high synergy means there is a strong, supportive connection between the two concepts). This help comes in several forms:
- Increased draw power: a larger and more appealing retail presence attracts users from greater distances.
- Additional customers: customers shopping in a nearby store may now want to shop or dine in a neighboring store because it’s convenient.
- Linked errands: people purchasing groceries may also want gifts, dry-cleaning, sandwiches or flowers.
- Linked lifestyle behaviors: this is a more general version of synergy, based on linked errands. It comes from observing the behavior of people across the day and then connecting the key behaviors in one setting.
At the retailer level, many key brands are often strongly associated with one another. An analysis of 50,000 large centers from TheRetailPlanet.com’s database shows there are approximately 13 to 15 distinct patterns or associations of retailers that underlie most US shopping districts today. These patterns represent historical templates that have evolved into well-established patterns of retailers organized around lifestyles or functions.
The Retail Synergy component of our overall score is based on an evaluation of the brand being considered, as well as all other brands in the retail district and nearby centers. It also uses our extensive database of 3,000 major retail chains, 800,000+ Retail Districts and 200,000+ large and small shopping centers in the US for its calculations.
The Competitive Environment component refers to the general economic health of the retail environment where the property or center is located. Health is defined by supply and demand, as well as economic conditions in the market that offer positive or negative support for various retailers. The Competitive Environment component of the overall score first looks at relative supply and demand together with local or market level economic trends.
Supply measures the amount of competition coming from retailers with related concepts that compete with those who sell similar goods and services. The supply measure incorporates actual sales estimates for the retail category coming from local tax data, when available.
Demand is a measure of the spending potential of residents in the trade area for the specific retail category or products in that category. Demand in BrandScore comes from household level expenditure data aggregated for the trade area by retail product and category
Not all successful retail settings depend on having a large number of surrounding households. In fact, some of the best retail areas are surrounded by offices and other forms of commercial activity, with only a limited number of households. The term Commercial Environment describes all of the customer sources in the trade area or local retail district that are likely to bring a supply of people into contact with the retailers or restaurants in the area. These customer groups include:
- Shoppers and diners
- Traffic on local streets
- Entertainment facilities
- Public transportation hubs
- Special populations such as tourists, schools, military and others
The measurement of the Commercial Environment is based on:
- Employees within two miles of the location, organized by estimated spending power for each employment category
- Shoppers within a 1/2 mile of the retail district
- Nighttime and entertainment activity, which measures the extent to which the retail district is likely to be busy at night with visitors shopping, dining or at theaters and other recreation venues
- Hotels and motels located in the district
- Traffic counts on nearby streets and highways
The focus of the Commercial Environment component is on rating the retail environment for the retail brand based on the potential of the different customer sources to use that brand.
If you are interested in learning more about BrandScore we recommend you order a free copy of Dr. Richard Fenker’s latest book “How Retailers Find Their Place, Introducing BrandScore.”