Founded in 1989, Arc'teryx is an outdoor equipment and sports clothing manufacturer headquartered in North Vancouver, B.C. Owned by Finland-based Amer Sports, the manufacturing company sells a line of climbing, skiing, snowboarding, backpacking and hiking-related products through 58 Canadian and U.S.-based distributors, three branded stores and one factory store in Canada and the U.S.
Like many manufacturers, Arc’teryx knew more about its distributors than the people who buy its products at thousands of dealer locations across North America. So when the company decided in 2012 to expand its branded stores beyond the one it operated in Montreal, it turned to Environics Analytics to help identify its customers and determine the best locations to launch its new corporate stores. Company officials hoped that through its branded retail stores, they could communicate directly with consumers, develop better products and react to customer expectations.
Drawing on data from its e-commerce site and statistical analysis of dealer trade areas, analysts created data-based maps of prospective markets—and neighbourhoods—to identify the best sites. The researchers first identified concentrations of customers in Canada and the U.S. that offered potential for company-branded stores. They then collected sales data from brick-and-mortar and e-commerce transactions over a five-year period and used PRIZMC2 to create target groups of core customers based on their demographics, lifestyles and Social Values. In calculating where to open a branded store, analysts conducted a correlation analysis to determine the demographics and lifestyles that predicted sales, and then mapped that potential to ensure that a new location would not compete with the current distributor network. They then sized and located potential customers for 12 prospective locations in Canada and the U.S., and created maps that displayed current customers, potential customers and competitor locations.
“One of our biggest challenges was a small dataset about our customers,” says Bob Matheson, Director of Consumer Sales at Arc’teryx. “But Environics Analytics helped us organize information from various systems and turn it into customer profiles. The analysis helped us confirm the cities in Canada and the U.S. that we wanted, as well as which neighbourhoods where we were going to locate.”
Ultimately, Arc’teryx decided to open stores in Seattle and Vancouver, and the results were undeniable: When the first store opened in Seattle last year, the new location quickly became Amer Sports’ top-seller among its 300 stores. Although data-based analytics are only as good as the quality of the data, the EA project for Arc’teryx showed that even limited customer data can guide decisions to the right retail locations. “It allowed us to add customer data to our location analysis work which helped improve the accuracy and reduce the risk in finding the ideal location for our stores,” says Matheson. “More important, it allowed me to provide senior management with a tool they could use to easily provide authorization to proceed—or not—with opening stores in the various cities.”