Simulation based sales forecasting on retail small stores

As the competition becomes more and more intense, many retail small store chain operators are eager to know how to evaluate new store locations quantitatively to support a scientific business development decision, e.g. what will be the potential sales of new stores? How will a new store influence other existing stores? In this paper, we propose a novel framework that can predict the competitions between new store and competing stores. First, we examine the special characteristics of customers¿ demand on retail small stores and develop several models to estimate different customers¿ demand; and then model the relationship between customers and multiple stores, such as route model, user behavior model; finally, we compute the store sales via simulation. A real case on the micro-competition analysis in a China city for one of the famous retail small store chain operators shows that our method is more practical and accurate than other methods.