A Mean Store Radius (MSR) or a Store Service Area is defined as the designated geographic region where the store customers are located. The radiuses of a network of stores determine to a significant extent the business operation. Correctly defined service areas improve customer service (speed, product quality), reduce operating costs and increase revenue.

GOODY’S S.A. a VIVARTIA HOLDINGS S.A. subsidiary realizing this important factor in its business operation, assigned Terra the task of designing the mean stores radiuses for its stores for the whole country.

The project includes the service areas optimal boundary determination and a street index creation for each store. Street index is a customer datasheet with customer addresses where each customer is associated with the “optimal” store, that is, the store that, according to certain criteria set by the company (usually time related) serves this customer better than another store in the network.

The usual methodology, not necessarily the one followed in the case of VIVARTIA, both in the case of the reorganization of existing MSRs and in the case of the creation of new MSRs within the existing network is basically the following:

  • the MSR for neighboring stores is calculated, usually based on time criteria, number of customers and demographic data
  • results are sent back to the organization where they are processed and end up in a final form (area boundaries). The reason is that, in the case of franchise stores for example, there may be conflicts between adjacent store owners who require the organization’s intervention to be resolved
  • customer addresses are then geocoded (their positions are located in the map based on their geographical coordinates) by Terra Excel Geocoder Tool and the customer-to-store matching is done using geospatial functions

New customers are assigned to the store when they call to place an order on the organizations call center. The customer reports his address, the address is directly located on the map and then according to which store’s service area the customer address falls in, the customer is assigned to that store.