Understanding the feasibility and likely returns of expanding into new countries in retail

A department store wanted to explore the commercial feasibility of expanding into new countries, and understand the likely returns.

Our Solution

• First, we mapped out the size and scale of each country in terms of consumer expenditure across categories relevant to our client.
• We then undertook an extensive program of research to understand the shopping dynamics and habits of consumers, looking at things like brand and retailer preference.
• This research was used to create a ‘relevant’ overall market size.
• We then created an ‘addressable’ market size by removing consumers who were not receptive to our client’s range, offer and price levels.
• This market size was further refined to a ‘serviceable’ level by removing consumers whom our client could not serve with their proposition.
• An ‘attainable’ level was calculated by removing consumers who were unlikely to switch to a new retailer as they were satisfied with the ones they were using at present.
• Finally, the attainable market was used to calculate potential sales and shares over a number of years and under a number of scenarios.

Outcome

Our client decided that the opportunity was not sufficient to justify the costs of expansion – saving them millions.