Ladies and Gentlemen! Dear MAPIC  delegates!

As the economic recession proceeds and the market competition is getting tougher the retail sector increasingly needs good research. The optimum approach to the existing network and the most accurate estimate of the location for retail sector expansion into new cities is essential. Currently Russia has an image of a rather respectable and stable country for investment in retail and shopping centers. The potential is enormous not only in big cities, such as Moscow, St. Petersburg and 11 cities with a population of over 1 mln people, where regional authorities are becoming more loyal and the markets are getting more and more competitive.

At present the detailed geomarketing research has globally proved to be efficient in reducing the investment risks of certain property at a particular location of a particular city. Marketing and development experts cannot imagine different approaches and tools independent of the human factor, except for geomarketing research and, consequently, GIS software to perform them.

The detailed geomarketing research of the Russian cities often lacks data on consumers, competitors, which are available in other countries. Thus, in our opinion, it seems quite interesting to involve simulation procedure of consumer behavior within urban space, forecasting methods for economic performance of a store at a specific location, evaluation approaches to assessing the environment of a plot for the prospected shopping center, site evaluation methodology for a certain concept and development of proposals (recommendations) for acquisition of a network for targeted optimization in a particular city. The experts of the Center for Spatial Research have achieved much for 8 years in the Russian and Western Europeans retail sector in over 40 Russian cities: conducted extensive field research, collected exact details for the population databases, invented approaches to assess the solvency of population in cities despite the lack of access to reliable information in the government statistics bodies, created new models of trade area structures (catchments area), which can be applied in the Russian cities and do not correspond to other countries.

At MAPIC we would like to present our experience in performance of over 50 detailed geomarketing research projects, implementation of geomarketing research tools in more than 40 Russian cities since 2003 for different retail market objects (groceries, banks, pharmacies, DIY, fitness centers, fast food restaurants, etc.), different formats for different population groups for such companies as REAL, WalMart, World Class, Leroy Merlin, KESKO, PRIZMA, Sberbank Russia, Home Credit Bank and many others involved in the development of shopping centers (Adamant, SRV-development, etc.). We are pleased to mention that 70% of our customers are companies with Western European stock that understand the advantages of the “Center for Spatial Research” and that it has acquired expertise working in the narrow market of geomarketing services, being independent from brokerage and realtor agencies and has the capacity to offer the most considering the modern requirements for the output. It encompasses detailed geodata in GIS-format, reports on geomarketing research, as well as web-based access to geodata for faster opening of a shop in a particular place or environment analysis of the Russian cities, software on geomarketing research in the Russian cities, as well we the development of math models of forecasting the revenue for a particular location.

We will be glad to see experts from retail companies, investors, developers wishing to plan their activities efficiently and approach in more detail the issue of minimizing the investment risk in the course of business development in Russia.

We will be glad to meet the companies that could represent our interests in Europe, America and Asia! Welcome on Thursday, November 17 to Angora Hall at 5 pm for the seminar “The detailed geomarketing researches for effective expansion of Retail in Russia”. Our experts are always available at the PODs booth (# 01), as well as at the Russian breakfast event (17/11/2011)Meet you there and have a lot of new business contacts at MAPIC! Visit our web-site at csrgeomarketing.com

To increase efficiency of Walmart’s site selection process Center for Spatial Research has provided the company with the set of precise geodata specially collected aggregated and transformed to meet requirements of Walmart. As the result the international retail owns valuable and unique geographical information (population, value assets, traffic, and more)  of Russian cities which will allow the company efficiently perform its penetration strategy.

The main goals of this project were:

1. To evaluate the spatial distribution of Sberbank locations in the city
2. Future optimization of the branch network
3. To define attractive areas for the network expansion and opening of new branches

In order to meet these goals CSR resolved the following issues:

• Assessed the geographical location of Sberbank branches in order to identify “problem” areas of the city – defined as insufficient or redundant bank locations
• Assessed “problem” branches – branches at inconvenient locations
• Defined the most suitable areas for the new branches
• Evaluated three scenarios of the bank network development: optimization of the exiting network, opening of the new branch without network optimization, network optimization without opening a new branch
• Provided Sberbank managers with geomarketing research techniques and show them how to work in ArcGIS

For solving these tasks CSR applied various data (bank indicators, bank standards and ratings, mathematic models) linked to service areas geographical units:

• number of residents per bank teller
• branch workload
• buying potential of the service areas
• public transit routes
• ATM locations
• ATM and bank terminal sufficiency per block
• competitors locations

During the project implementation the methodology for defining and ranking suitable zones (zones that are most appropriate for opening of the location) was applied with good results.

As the result of this research Sberbank Baykal Division has obtained the report with recommendations on optimization of the branch network as well as thematic maps showing the most suitable sites for new locations.

One of the companies which has purchased the report is a large Finnish development company planning to enter the Russian market. Applying information provided in the report, the company can conduct geomarketing analysis and assess attractiveness of cities and territories of the Moscow Oblast region. The report contains the following information:

• Major cities of the Moscow Oblast region: population and socio-demographic characteristics;
• Development of transportation infrastructure of the Moscow Oblast Region,
• Shopping attractiveness ratings of the major regional highways based on 6 geomarketing factors
• Statistics on retail trade and catering, the development of service sector
• Employment and unemployment rates
• Construction data and cost rates
• Population incomes and expenditures
• Regional investment: fixed capital and foreign investments.

The objective of this report was to compile a complete set of geomarketing information on the Moscow Oblast Region for companies planning to investment in commercial real estate.

For more information on report go to RBC website.

The purpose of this study was to assess drive-time and walk-time areas in order to calculate the number of visitors, the level of purchasing power and the future revenue of the shopping mall located in St. Petersburg.

The groups of factors in the drive-time and walk-time areas which influence the mall operations were assessed:

1. Population:

• population in the drive-time and walk-time areas
• mall accessibility
• population density
• age groups (segmentation by age)
• indicators of household wealth

2. Business activity:

• number of employees in business centers
• distribution of business centers
• density of business centers

3. Traffic:

• average daily vehicle traffic
• analysis of traffic jams

4. Territory development:

• St. Petersburg General Plan zoning changes
• investment projects
• transportation infrastructure
• houses under construction
• new planned business centers
• number of employees in the immediate area change

In order to implement the project CSR specialists applied the the following research methods and tools:

• GIS tools for geocoding, drive-time areas analysis, density  assessment
• Comparison of different databases
• Data validation “in field”
• Data obtained in previous research

As the result CSR provided the client with a final report which included

• Set of maps
• Tables with evaluated data
• Location pros and cons summary

Example of the code stamp used in the Soviet Union and Russia. The image shows how the postal codes are written on Russian envelopes. The upper image shows the field with 9-segment outline for each digit of the 6-digit postal code. It is located in the left bottom corner of the envelope. The other image shows the model according to which the digits should be written (this sample is printed on the back of the envelope).

Today the Center for Spatial Research is able to provide boundary files of the Russian postal codes being the one of first companies in the market who can deliver this important geographical information. It is necessary to say that even Post Service of Russia is not providing this kind of geodata.

TToday the importance of postal code geodata is hard to overestimate when large retail, banking and insurance companies are constantly collecting the information on consumers for CRM and marketing purposes. Postal codes allow to aggregate, segment and clusterize consumers. They allow to visualize sales, define potential territories, assess trade areas and much more.

Moreover the Center for Spatial Research is also able to offer a number of variables (depending on the region) based on postal codes including population counts, factors of wealth, number of retail outlets, provision of retail space and more.

For more information on Russian postal codes please contact the Center for Spatial Research.

Wendy’s/Arby’s Group specializes in sandwiches and hamburgers and has network of restaurants under the brands Arby’s (3700 points) and Wendy’s (6540 points) in 22 countries.

120 restaurants will be opened directly by Wenrus Restaurant Group, other 60 – in conjunction with regional partners by sub franchise. The first restaurant will be opened in the I quarter of 2011 in one of the largest shopping and entertainment centers in Moscow. By 2012, plans to open eight restaurants. The average bill at restaurants is $6-8.

Investments in a stand-alone restaurant  (300 square meters) total $ 2.5 million, in the street area location of 250-300 square meters – $ 500 000; at a food court area of 90 square meters – $ 280 000.

In the first five years investments in the project will amount up to $ 40 million. Total investments are planned to exceed $ 100 million.

Read more on Vedomosti