Halo-effect
The halo effect describes the ratio between the drive times to your physical location and your total online sales.
When we analyze the ratio between the drive time and online sales we notice a couple of things;
- There is a clear peak in online sales from customers living in the secondary catchment area of your physical location.
- The Halo effect is ambiguous:
- Positive impact: when opening a physical location, your online sales will benefit from this. So more online sales around your “bricks".
- This is explained by brand awareness, brand presence, …
- Analysis: higher share of online sales in areas around physical locations
- Possible risk: when downsizing your network, you might lose online sales in areas where you’re not represented anymore
- You can reduce this risk by trying to convert offline customers to online customers. This requires a good understanding of your customer profile and a clear distinction between your digital and non-digital customers
In theory, the ideal situation would be to
- Gain online sales when opening new locations
- While filling gaps in your physical network with your online sales channel (and thus create complementary channels)
This require appropriate marketing actions, and is in reality very hard to achieve.