The key first step for any retailer to make prior to embarking on a network expansion plan is to know your customer.  Market understanding is vital to knowing who your customer is, how many customers exist and where to find them.  It is critical to understand your market today but more importantly what that market is going to look like in five years.  Retailers need to go beyond the basics of describing their market areas and start to analyze their markets.  It is not the number of people that matter in a market but the types of people in a market. Understanding market capacity will impact store capacity – how many stores can I (the retailer) open in a given market?

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