New York -- The three rules of retail real estate are the same as the three rules of any other type of real estate – “location, location, location.” But each retail chain has its own unique requirements for what makes a good location, and Charlotte, N.C.-based Bojangles’ Restaurants Inc. is getting some technical assistance in determining the best spots for new stores based on factors such as who lives nearby.
Scouting the Best Locations
Bojangles, which will have about 580 units by year’s end, had been using a variety of methods to analyze customer demographics, but was looking to further refine its demographic profiling. Boston-based private equity firm Advent International, Bojangles’ corporate parent, recommended that the retailer investigate customer analytics technology provider Buxton.
The company initially met with Buxton around the beginning of 2012 and decided to start testing Buxton’s remotely hosted SCOUT customer analytics application. Buxton hosts SCOUT on a Google Maps platform and Bojangles employees can obtain access via PC or mobile device.
“We use the tool in two or three ways,” said Eric Newman, executive VP & general counsel at Bojangles’. “It helps us visualize where customer bases are and isolate demographic characteristics of potential sites.”
Discovering New Data
In addition, Newman said Buxton’s analytical capabilities help Bojangles strategically lay out the location of franchise restaurants to avoid locating a unit between two trade areas. At the end of 2012, Bojangles began using the core of the product to estimate the range of sales projections. These estimates were based on the mix of customer demographics located within six minutes’ drive of a store. More recently, Bojangles began comparing projections to results and discovered some surprising revelations.
“We discovered some franchisees were having success with non-traditional demographics others were not obtaining,” said Newman. “We applied those learnings to other franchisees to avoid the self-fulfilling prophecy of avoiding certain parts of town.”
And when sales came in less than projected, Newman said Bojangles was able to dig in and usually find human issues, such as a poor opening or an owner not following the system correctly, to blame. Another discovery occurred when Bojangles superimposed internal data, such as site proximity to interstate highways.
“We discovered proximity to an interstate is a ‘super-plus’ we had underconsidered,” admitted Newman.
Newman said Bojangles will continue organically refining the data it feeds to the Buxton system. For example, sales significantly improved in 2012 compared to 2011, so the company will reset projections against those higher figures.
“We’re pleasantly surprised by how well it’s done,” Newman said.