Filling in the Blanks

By Dori Saltzman — August 01, 2007

Location, location, location -- Coldwater Creek knows that a large part of a store's success is its location. Accordingly, the apparel retailer employs three geographers to help determine the best possible location for new stores. This year alone, the geographers helped Coldwater Creek open 65 new stores. Essential to the geographers' job is the knowledge stored in the company's geographic warehouse.
According to Carl Brenner, manager of statistics and geography at Coldwater Creek, the warehouse is a combination of customer purchase data pulled from the retailer's 14- terabyte data warehouse, and demographic and psychographic data provided by MapInfo. The warehouse allows Brenner and his team to "tease out some of the relationships between demographics, psychographics and direct behaviors." This enables Coldwater Creek to not only choose sites with the highest probability of success, but also to negotiate with real estate agents when chosen sites may not be the best possible locations.
Finding the best possible locations for new stores is a matter of "filling in the blanks," says Brenner. "The advantage we have over XYZ retail company is that we have all the store transaction history. We can say that this customer segment has this positive behavior so let's go find more of that segment." The retailer then turns to the geographic warehouse, plugs in the criteria it is looking for and begins sorting through the results.
Often Brenner and his team seek out new store locations by targeting a geographical void -- an area where there are no Coldwater Creek stores -- and then evaluating the area. In these cases, Brenner checks the transactional information to see if any current Coldwater Creek customers live in the area. He then layers on the demographic and psychographic information provided by MapInfo.
"It's not as cut and dry as we're looking for right handed people who hop on one foot," says Brenner. By looking at how various characteristics blend together, Coldwater Creek gains insight into how successful a particular location will be. "I think of the characteristics like Legos. We know that when we blend them together, certain characteristics work well for us. So we find where those legos (characteristics) are and we snap them together and then we have a composite picture of what the trade area looks like."


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