Under these circumstances, retailers must wring every possible profit dollar out of their existing facilities. Accomplishing this requires a commitment to a regular program of store performance analysis. Rather, it requires careful and intelligent analysis. The purpose of this article is to provide some guidelines.
Contiguity is crucial.
The client's advertising agency had unthinkingly selected the zip codes of customers who contributed the top 80 percent of sales in a single week-a group that included a busload of customers from the remote zip code, whose itinerary included a very rare visit to the client's store. But the accuracy of these lists, and the extent to which they are representative of your customers, must be thoroughly vetted. For example, credit-card data may exaggerate the geographical size of trade areas because they can be biased toward big spenders making infrequent trips. POS data collection can be a disaster if it is not gathered in an organized manner. There are two further problems with address lists that are rarely discussed but must be recognized.