Case Study: Massage Envy
Type of retailer: Massage Clinics
Number of locations: 1,052
Problem: Sometimes it’s not about finding new locations but auditing existing locations. Should you resign a lease? Invest in underperforming locations? Which locations need to close? Which locations are in ideal spots but the store is suffering because of poor management?
These are some of the questions that both regional developers and franchisees for Massage Envy brought to IdealSpot to get clarity through better data and analysis.
Solution: Mapping customer demand and purchase intent is key to auditing not only a location, but a market. It answers key questions for Massage Envy including: “How many people like getting massages?” or “How many people are currently looking for a massage in our target markets?” And, as they compare their locations across the US, filling in this gap of data can help them gauge which locations are underperforming or over-performing based on comparative demand.
Top 3 take-aways:
1. Better data helps both in site selection and in auditing existing locations. For instance, it can help retailers understand which locations are over-performing or underperforming based on mapping demand, demographics, traffic counts, etc. and comparing across multiple locations, in real-time.
2. Customer demand data is a unique, insightful, and powerful insight into finding new opportunities in a market that was previously saturated based on industry standard demographic segmentation. For instance, Massage Envy typically targets the median age of 30-40 years and households with an average income of at least $75,000. But what if an neighborhood trends to millennial professionals that rent but there is high-demand for massage and spa treatments? Should the franchisee or regional developer make different decisions in breaking up the market or prioritizing their roll-out or realignment?
3. In the case of the regional developer (and corporate), IdealSpot augments their existing datasets, models, and value-add service providers with the only geo-located customer demand data in the industry–providing a holistic view of their target market.
Massage Envy built its reputation on making massages accessible to everyone through their membership model—helping to drive down the cost. Their inaugural location opened in 2002 and since then they have grown to over 1,000 locations through their franchisee friendly model. We were approached both by one of their regional developers and by one of their franchisees that currently owns 11 locations—separately, and for different reasons. The regional developer wanted to find gaps/opportunities in their Texas markets and the franchisee wanted help around deciding which locations to sell-off (or let the leases run out), and which locations to re-invest in.
In the case of the regional developer, they simply created an account on IdealSpot, selected their target cities, and our application automatically plotted their franchisees locations, competitive locations, and feeder locations (and their customers). They then enabled our Market Gap Analysis (which looks at the spread between market demand vs. current competitors in market), for Massage, Spa Treatment, etc., and shows via either: city, CBSA’s, zip codes, or neighborhoods, where there are opportunities for more Massage Envy’s.
With better data (customer demand) the regional developer was able to activate new franchisees where they previously weren’t able to.
In the case of the franchisee, they also created an account on IdealSpot and one of our Account Managers gave them a personal demo on how to use our demand data to find areas that were worth reinvesting in vs. areas that were depressed for their product or service via Search or Social signal mapping. They also shared their map with their broker and looked at their CBSA holistically, looking at available lease rates closer to where their target customers are—cutting down on their drive-times.
Build “it” and they will come simply won’t work in retail. You need to build “it” where your audience is.
According to Chris Shonk, franchisee owner of 11 Massage Envy locations, “IdealSpot helped me cut through to the more relevant, better data in understanding my target audience and market. By showing me the raw demand for my services, I was able to better understand where my opportunities are, and more importantly, aren’t.”
Fast forward a few months later and both the regional developer and the franchisee are both using the IdealSpot platform to not only audit their existing locations and markets, but now they are shifting to site selection and using IdealSpot’s better data to help them understand ideal locations based on signaled demand.