Case Studies What Are the Most Profitable Operating Hours for Our Stores?

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	What Are the Most Profitable Operating Hours for Our Stores?

What Are the Most Profitable Operating Hours for Our Stores?

Technology Category	Analytics & Modeling - Predictive Analytics Functional Applications - Enterprise Resource Planning Systems (ERP)
Applicable Industries	Retail
Applicable Functions	Business Operation Sales & Marketing
Use Cases	Predictive Replenishment Retail Store Automation
Services	Software Design & Engineering Services System Integration
Challenge	Executives at a leading specialty retailer wanted to identify the optimal operating schedule for their stores. Given heavy in-store traffic on the weekends, management planned to open stores two hours earlier on Saturdays, but first wanted to understand the total profit impact of the change. Specifically, the client sought to understand if the extended hours would generate a sufficient increase in sales to offset the associated costs. Read More
About Customer	The customer is a leading specialty retailer with a significant number of stores across various markets. The retailer experiences heavy in-store traffic on weekends and is focused on optimizing its operating hours to maximize profitability. The company is large, with over 1,000 employees, and operates in a competitive retail environment where customer convenience and operational efficiency are critical. The retailer is keen on using data-driven approaches to make informed decisions about store operations and has invested in advanced analytics tools to support this goal. Read More
Solution	Using APT’s Test & Learn for Sites software, the client designed an in-market experiment to test the new hours in a representative subset of stores and measure the incremental impact on profit. The software compared 'test stores,' where the hours were changed, to customized groups of similar 'control stores,' that did not undergo hour changes, to isolate the incremental profit impact of the operating hour changes. APT’s rigorous test-and-control analysis showed that the extended hours led to an 8.4% ($210 per store) lift in Saturday gross profit throughout the test period. The software revealed that the lift in profit came primarily from the extra hours and only caused slight cannibalization of mid-morning profits. However, while there was negligible impact on weekday profit, the analysis identified a 1.1% ($28 per store) decline in Sunday gross profit. Accounting for this cannibalization of Sunday profit and the required $170 in additional labor/operating costs per store, extending hours would cause a $43 decline in profit per store on average. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Predictive Analytics

Functional Applications - Enterprise Resource Planning Systems (ERP)

Applicable Industries

Retail

Applicable Functions

Business Operation

Sales & Marketing

Use Cases

Predictive Replenishment

Retail Store Automation

Services

Software Design & Engineering Services

System Integration

Challenge

Executives at a leading specialty retailer wanted to identify the optimal operating schedule for their stores. Given heavy in-store traffic on the weekends, management planned to open stores two hours earlier on Saturdays, but first wanted to understand the total profit impact of the change. Specifically, the client sought to understand if the extended hours would generate a sufficient increase in sales to offset the associated costs.

About Customer

The customer is a leading specialty retailer with a significant number of stores across various markets. The retailer experiences heavy in-store traffic on weekends and is focused on optimizing its operating hours to maximize profitability. The company is large, with over 1,000 employees, and operates in a competitive retail environment where customer convenience and operational efficiency are critical. The retailer is keen on using data-driven approaches to make informed decisions about store operations and has invested in advanced analytics tools to support this goal.

Solution

Using APT’s Test & Learn for Sites software, the client designed an in-market experiment to test the new hours in a representative subset of stores and measure the incremental impact on profit. The software compared 'test stores,' where the hours were changed, to customized groups of similar 'control stores,' that did not undergo hour changes, to isolate the incremental profit impact of the operating hour changes. APT’s rigorous test-and-control analysis showed that the extended hours led to an 8.4% ($210 per store) lift in Saturday gross profit throughout the test period. The software revealed that the lift in profit came primarily from the extra hours and only caused slight cannibalization of mid-morning profits. However, while there was negligible impact on weekday profit, the analysis identified a 1.1% ($28 per store) decline in Sunday gross profit. Accounting for this cannibalization of Sunday profit and the required $170 in additional labor/operating costs per store, extending hours would cause a $43 decline in profit per store on average.

Impact #1	APT software identified select stores in the network where the hour changes would have a positive impact.
Impact #2	The software automatically analyzed thousands of factors, such as market demographics and store attributes, to identify characteristics associated with higher performance.
Impact #3	In stores located in areas with lower income, larger households, and more competitors nearby, the extended hours would drive a large enough profit increase to have a positive net profit impact.

Impact #1

APT software identified select stores in the network where the hour changes would have a positive impact.

Impact #2

The software automatically analyzed thousands of factors, such as market demographics and store attributes, to identify characteristics associated with higher performance.

Impact #3

In stores located in areas with lower income, larger households, and more competitors nearby, the extended hours would drive a large enough profit increase to have a positive net profit impact.

Benefit #1	8.4% ($210 per store) lift in Saturday gross profit throughout the test period.
Benefit #2	1.1% ($28 per store) decline in Sunday gross profit.
Benefit #3	$170 in additional labor/operating costs per store.

Benefit #1

8.4% ($210 per store) lift in Saturday gross profit throughout the test period.

Benefit #2

1.1% ($28 per store) decline in Sunday gross profit.

Benefit #3

$170 in additional labor/operating costs per store.

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Overview

What Are the Most Profitable Operating Hours for Our Stores?

Operational Impact

Quantitative Benefit