Network Planner is a complete tool for managing and developing a capital strategy and execution plan for the entire retail store base. From new site planning and existing site modification through full market planning, Network Planner assists real estate professionals and planners in assessing individual investment opportunities and managing network growth. Designed to provide analysis and process support for a comprehensive capital strategy, the software marries individual site level decisions to overall market strategies, factoring in historical experience with each recommendation.
APT Value Creation
Network Planner helps retailers answer such complex and important questions as:
What lessons can be learned from past investments?
Most retailers rely on regression, gravity models, or other similar analytical techniques to help measure the expected impact of capital investments. For example, a retailer can use a gravity model to predict an increase of revenues from $8 million per year to $10 million per year if it increased the power rating of its site through a remodel — a gain of 25%! While analytically interesting, this approach fails to factor in past remodel experience. Suppose, for example, the retailer has already remodeled 15 other stores and that those stores averaged a 3% sales lift. Then, a 25% gain seems rather unlikely, despite “what my model says.” Retailers need to do a better job of analyzing past capital investment results and using this experience to guide future expectations instead of relying on static models.
How can capital decisions be tailored to drive maximum capital returns, market share, cash flow, and net income?
Shareholder value creation for any network retailer hinges on an effective strategy that enables retailers to optimize their investments and make the most of their resources by knowing the answers to such questions as:
- Will this proposed new store be financially successful? What is its predicted performance by product category?
- What is the best store configuration to build at this location?
- Will this potential new store still be profitable if the proposed mass discounter location opens down the street?
- How do new site decisions connect to overall capital strategy?
Too often, retailers make site-by-site decisions on capital investments without considering their strategy overall in the given market. The site-by-site basis of decision making needs to be guided by a top down market strategy. A site that appears to meet investment hurdles is not necessarily a good investment if it is in a non-strategic market. Individual site decisions need to be in sync with the strategic plan for the market.