Measuring spatial organization of an auto-parts retail network

This paper aims to identify areas of economic value and to analyse spatial variability of demand and services delivery patterns for an auto-parts retail network. The spatial analysis undertaken was based on transportation and delivery of products out of 'point of sale' stores to customers. The revenues generated in situ were not accounted. Results show that the customer demand in terms of revenue tends to spatially skew, however the service delivery pattern reflects uniformity. This 'spatial mismatch' indicates inefficiency between value generated and trips made, leading to increased costs for delivery relative to value. Furthermore, the market areas that have been delineated for each of the stores also shows significant overlap - the area where stores compete with each other for business. Eighty percent of customers can be reached in 15 minutes radius; whist only 20 percent lies outside the market area. The identification of areas of economic value is a vital business strategy to reduce cost and increase revenue through which customers with the greatest potential can be geo-targeted. The outputs from this research have been used to rationalise the adoption of an area-based delivery strategy through which less accessible, unprofitable and non-critical customers can be either charged or outsourced without a substantial reduction in revenue or quality of service delivery.