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Customer Behavior     
 
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How Do I Conduct Market Research On Retail Outlet
Posted By: noah_mj on 6/10/2005 12:44 AM (CST) 250 Points
Most of the retail outlets are very secretive about their earnings.
How do I do it without asking them directly.

Posted by: rahultheboynextdoor* Accepted Answer
6/10/2005 8:44 AM (CST)
no study or survey can predict that how much a retailer is earning because of the secretive nature and also due to certain tax evasion stints.
so the point is that one can go for an approximate estimate and this could be easily done while portraying as a mystery shopper. Important point to consider is that one should understand how does a retailer earn. When this basic is clear one can easily estimate.
Now the income of a retailer depends on the fact that how many times can he circulate the money in his shop. Reason being that the return on different commodities varies and ranges from 1% to 20%. Now it is imperative to understand that average return is around 8-10%. Now consider this if a retailer does sales of X Bucks with profit of Y Bucks (substitute your currency) now due to money circulation Y bucks earned during that day will get reinvested the other day and hence will generate more profit hence the more the money circulates the more the earning. This gives rise to a compounded equation of
Y *(1+ 8 to 10 %)^ 30 (or the number of days the store stays open). So all you got to find is his approximate sales of one day and then calculate 8% of his sales put into the formula and get the profit. the catch is that you have to estimate the faciltity maintennance cost minus this with the profit received and you have your answer
 
Posted by: jack Accepted Answer
6/10/2005 9:43 AM (CST)
If earnings means gross revenues, all you have to do is estimate the average ticket and watch traffic for a while during different dayparts. You can estimate the average ticket pretty easily.

What do you mean outlet? Factory Outlet?
 
Posted by: Puru Gupta Accepted Answer
6/10/2005 2:59 PM (CST)
Noah,
There are 3 basic parameters to assess each and every retail -
(a) Footfall
(b) Ticket Size
(c) Conversion Ratio

Most of the MR done on the retailers is based on these 3 parameters. Once you have these values, you are ready with your data and subsequent assessment.
Next thing is to determine the values of these parameters - I presume this is what you have asked.
Most of the data collation that I have come across is taken by separately evaluating each of them.

Footfall - Number of people entering the Retail Outlet, can be evaluated within a fixed timeline by physical inspection ( you need to factor the peak-hour traffic separately)

Ticket Size - Random Sampling would be the best method according to me, else consumer surveys would be next on my mind

Conversion Ratio - Again, physical inspection would be the key factor.

All and all, all these can be individually calculated and then collated to get the data you want.

Hope this helps!
Regards,
Puru
 
Posted by: thinkmor Accepted Answer
6/13/2005 6:17 AM (CST)
Hi Noah

Where are you located? Type of retail outlet?

Have you checked their Annual reports? You can probably download this from their website depending on the size of the retailer.

Depending on your location, you can also get copies of annual accounts from Companies house or equivalent local/national government tax audit centre which will give you info on last year's trading.

If they have a larger market share, then you may also get info from your Retailers Association which probably produce league tables once or twice a year in their newsletter or publication on industry trends and leaders etc. You should also try contacting journalists or commentators within the industry for validation of information.

Failing that, poach one of their staff and you will probably get more than enough info you need.

Hope this helps.


Zahid Adil
 
Posted by: francisliew Accepted Answer
6/18/2005 7:24 AM (CST)
1. In order to know the earnings of retail outlets, I think the best way is a direct approach, tell them you are doing a survey/research.
2. If you do not ask them a direct question, then I think the survey has no value, it is after all your estimate.
3. Tell them you will not take down their personal particulers.
4. Ask them the monthly gross income, or the yearly gross income.
You will be surprise, hope this help.
 
Posted by: carrie77 Moderator Response
6/25/2005 7:04 AM (CST)
Hello all. I am closing this question since it's more than 2 weeks old. We do this to reward the contributions of participants in a timely manner + to give increased visibility to the newer questions.

Thanks for participating!
Carrie (Production Editor)
 


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