The restaurant chain planned to remodel its older locations, and wanted to determine the impact of this considerable investment before rolling out the program nationwide. The chain’s previous experience with testing, however, led to inconclusive results.
Management turned to APT’s Test & Learn™ software to ensure that their testing would produce statistically significant results. Test & Learn™ helped the client modify their group of test sites to represent an average group of restaurant locations. Then, by leveraging the company’s sales data, Test & Learn™ identified the profitability of each aspect of the remodel. Using this data, management eliminated the least profitable components of the remodel program, while making sure to retain those that generated the greatest return. APT’s predictive analytics were able to significantly reduce the cost of each store remodel, while maintaining the lift in sales associated with the program.
Management’s use of Test & Learn™ to target their remodel strategy allowed them to reduce their rollout costs by nearly half. This tailored remodel program improved NPV by $20MM.
A national restaurant chain embarked on a significant remodel of its older locations.
The client had a history of testing but generally found results unsatisfactory.
APT updated test design to ensure proper representative test and control groups.
The most effective elements of the remodel were identified and costs were cut by half, resulting in an estimated $20MM NPV lift.
A leading national restaurant company
A leading national restaurant chain was planning a significant remodel of its older locations. Due to the high cost per remodel, the chain had begun conducting a test on a predetermined number of stores with the expectation of expanding the test in the coming months. Testing had been used previously by this chain with unsatisfactory results. Determined not to repeat the mistakes of the past, the client was focused on choosing an appropriate test group to ensure that they would be able to obtain a statistically significant read of the sales lift.
The client used APT’s proprietary software to assist in designing the appropriate test, including selecting the initial remodels that would provide the understanding of program effectiveness and the business case for continuing the program.
Using APT's Test & Learn™ solution, the restaurant chain found that their current test design was insufficient, but that only minor modifications were needed to ensure workable results. In particular, the chosen sites were not representative of an average group of locations. APT identified a small number of additional stores to be added to the test group, thereby ensuring an accurate read on performance. A significant increase in test size was determined to be unnecessary, allowing the client to minimize investment before understanding the impact of the program.
Following the completion of the first remodels, APT examined the results and found which elements of the remodel were most effective. By identifying particular components of the remodel that weren’t generating lift, APT was able to significantly reduce the cost of each store remodel while maintaining the lift in sales associated with the refresh. In addition, APT was able to determine which types of locations had the greatest upside—those with certain demographics and a high degree of competition. APT software used these learnings to build a predictive model to target and prioritize future remodels.
Management used this targeted remodel strategy to generate millions of dollars in NPV. Using APT's Test & Learn™ approach, the client was able to nearly halve their rollout costs without significantly reducing sales lift, resulting in an estimated $20MM impact.