Expertise|Consumer, Retail & Restaurants

Overview

Stax works with investors and corporate clients globally in the consumer, retail, and restaurant sectors. From emerging brands to multi-billion dollar, multi-channel retailers, Stax has helped clients maximize profits by providing comprehensive and meaningful insights on customers and markets, and opportunities for operational improvement.

Types of Engagements

Consumer, retail, and restaurant companies engage Stax to analyze and help grow their businesses in a wide variety of ways.

  • Assessing markets, customers, segments, channels, and competition.
  • Understanding consumer trends, identifying customer needs, and advising on how best to deliver to these needs by optimizing value proposition, marketing, and sales.
  • Determining store-level performance, key drivers of performance, and what levers can be pulled short and long term to improve performance or change the retail portfolio.
  • Understanding changes in multi-channel needs of consumers and competitive pressures, to improve performance.
  • Developing go-to-market strategies with tactical assistance.
  • Providing advisory support at every stage of M&A, including acquisition screens, due diligence, identifying operational improvement opportunities, and maximizing sale value at exit.

Areas of Expertise

  • Apparel and Footwear
  • Food and Beverage
  • Health and Beauty
  • Niche Consumer Branded Products
  • Private Label and House Brands
  • Restaurants (QSR, fast-casual, casual, and fine dining)
  • Retailers

Examples of Engagements

  • Due Diligence on Value of Orphan Brands. A private equity firm with 20+ years of experience investing in branded products engaged Stax to assess the opportunity presented by a portfolio of orphan brands. For one brand in particular, Stax assessed the ability to drive incremental revenue through price increases, gauged consumer interest in product extensions, and assessed the brand’s competitive positioning and viability given the lack of advertising and marketing support. Based on Stax’s findings—that the brand was fundamentally sound and could be grown through actions such as better in-store merchandising and product extensions—the firm proceeded with the investment and exited within 24 months with a substantial gain.

  • Maximizing Marketing Spend. A national provider of store-based financial services, concerned that marketing cost growth was outpacing revenue growth, engaged Stax to determine the efficacy of each type of marketing spend and optimize spending so the firm could acquire the most customers at the lowest acquisition cost. Stax quantified the effectiveness of each aspect of the client’s marketing spend by developing statistical models to predict the number of customers gained from each type of marketing, estimating the “halo effect” from advertising for one business unit on other units, and developing an optimization model to recommend the most effective mix of marketing elements. Through this engagement, Stax identified several ways to increase the efficacy of the client’s marketing spending to increase the number of customers while significantly reducing marketing spend and acquisition costs.

  • Understanding Consumer Purchase Behavior. On behalf of a private equity firm exploring an investment in the maker of a fast-growing branded fashion accessory, Stax engaged in analysis to understand consumer purchase behavior and determine the long-term growth prospects for the business. Stax identified which consumers were buying this brand and the market share and growth rate for each segment. Stax gathered data to understand how purchasing behavior varied among different age segments, including purchase frequency, average spend, product mix, and channel choice. Stax also assessed brand awareness among non-customers and segmented them by age group, geography, and other potentially relevant demographic factors.

    While Stax found the brand to be solidly positioned, with a loyal customer base, this fashion accessory category was (and is) highly volatile, experiencing wild year-to-year fluctuations. In part, due to Stax’s assessment of underlying market volatility, this client opted not to pursue an investment.

  • Pricing and Promotion Strategies for an Apparel Retailer. An apparel retailer with about 300 stores approached Stax seeking to better understand its customer base. The retailer was interested in determining the optimal pricing on selected items in order to maximize sales and margins. The retailer also sought Stax’s help in identifying effective and ineffective promotions.

    By analyzing the retailer’s own data—including sales, margin, SKU-level data, by-store data, promotional data per product, and more—Stax developed insights on pricing and promotions. For each key item, Stax recommended price changes to optimize margins and revenues, and worked with merchant teams to adjust pricing. Stax also recommended changes in the communication of prices and promotions, as well as methodologies for testing and measuring the results of various pricing and promotion strategies.

SEE MORE CASE STUDIES

With nearly two decades of experience in the consumer, retail, and restaurant industries, across varied sub-sectors and geographies, Stax is able to analyze the latest market trends and help companies answer their most critical strategic and operational questions.

To discuss how Stax can assist you contact Mark Bremer at mbremer@stax.com.

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