Expanding a retail footprint is one of the most significant—and costly—decisions a business can make. As capital requirements for new store and site development continue to rise, ensuring that each expansion decision is grounded on solid data and strategic foresight is more critical than ever. Success hinges not just on identifying a promising location, but on deeply understanding the consumer landscape within that area.
Factors such as population density, age distribution, income levels, lifestyle preferences, and regional growth trends all play a pivotal role in determining a location’s potential.
One of the most common reasons retail locations underperform is declining or insufficient foot traffic. But what if you could predict foot traffic before even opening your doors? With the right tools and data, businesses can start to build that picture – transforming expansion into a calculated, strategic move. In this article, we’ll explore how our client benefited from demographic analysis, market potential assessments, and location intelligence.
The Challenge
One of the most common—and costly—mistakes businesses make when planning expansion is not having a clearly understood target audience. This was the challenge faced by one of our clients; they were unable to clearly articulate where to find their customers. As a result, selecting new store locations became a guessing game rather than a strategic decision.
The absence of a well-defined audience profile meant they couldn’t accurately assess the suitability of potential catchment areas. They lacked the ability to compare new locations against the characteristics of their existing customer base, making it nearly impossible to predict performance or demand in new markets.
To move forward, our client needed a two-step solution: first, to gain a clear, data-driven understanding of their current customer base— where they live, and what drives their purchasing behaviour. Secondly, they needed a way to overlay this profile onto other geographic areas under consideration for expansion. This would allow them to identify regions with similar demographic and behavioural traits, significantly increasing the likelihood of success in new locations.
The Solution
The first step was to overlay our client’s existing customer base with Mosaic, Experian’s industry-leading segmentation solution. Mosaic classifies the population into detailed lifestyle types based on demographics, behaviours, and preferences—providing a rich view of Australian households.
By applying Mosaic to our client’s customer data, we were able to identify which segments were most engaged with their brand. We then mapped these segments across the areas where our client already had stores. This analysis revealed clear patterns of success: in certain Mosaic segments, our client was scoring very highly against these key segments. For example, the ‘Executive Living’ segment—one of Mosaic’s most affluent consumer types—was indexing at nearly three times the typical rate in some locations.
With this intelligence in hand, we could then overlay these high-indexing segments onto new geographic areas under consideration for expansion. This allowed us to pinpoint locations with similar demographic and lifestyle profiles—areas where our client’s offering was most likely to resonate and succeed.
By aligning an expansion strategy with Mosaic’s insight, our client was able to move forward with confidence, knowing that each new location was backed by evidence, not guesswork.
The Insight: Knowing who to target—and who to avoid
With Mosaic segmentation applied, our analysis then revealed specific consumer segments that were significantly more likely to engage with our client’s brand—and just as importantly, those that were not.
Two standout segments and locations emerged as top performers:
- Executive Living: This affluent group indexed at nearly 3 times the norm, making them a prime target for future marketing in the newly identified location.
- City Sophisticates: Another high-value segment, indexing at 2.5 times the norm, indicating strong alignment with our client’s offering.
Equally valuable was the identification of segments that underperformed:
- Young Independents: This group indexed at 6 times below the norm, suggesting a poor fit for the brand.
- Senior Solos: Despite their energy and aspirations, this segment indexed 1.3 times below the norm, indicating limited engagement.
These insights gave our client a clear roadmap for growth. They now knew exactly which customer types to focus on—and which to avoid. This not only informed smarter, more strategic location selection but also enabled more efficient advertising spend. By targeting the right segments in the right areas, our client could maximise return on investment and reduce wasted marketing efforts.
The Results: Data-driven decisions that delivered
With a clear understanding of their ideal customer segments, and the ability to map these profiles across potential new locations, our client was empowered to make smarter, more confident expansion decisions.
One standout example of potential success was the comparison between two potential sites, a specific area in Melbourne’s eastern suburbs and a suburb within the City of Wollongong, in NSW. Using our data-driven approach, we identified that the location in Melbourne had approximately five times the revenue potential of the suburb within Wollongong, NSW. Armed with robust, evidence-based projections, our client was able to have increased confidence on the performance of these new locations.
Most importantly, the strategy led to the development of successful, long-standing store locations. These sites not only met expectations—they exceeded them, validating the power of combining demographic insight with strategic planning.