Strategic Advice

The retail environment is characterised by change – and not only in its stock. Retail operations change management and ownership – sometimes by choice and sometimes by force – and an increasing number are attracting private equity funding.

Real TSP is working with a number of senior retail executives as well as private equity organisations as they seek to assess the performance and potential of retail businesses. Typically our work will span commercial performance, technical infrastructure, quality of the customer experience, operational processes and organisational structure. This can lead to an expert-based valuation of the online channel.

Commercial performance

Real TSP has developed an integrated approach to help our clients value retail organisations through a combination of desk work, often using our powerful analytical tools, mystery shopping and company visits. This approach is underpinned by our many years experience of the retail sector.

Technical/operational set up

Real TSP has in-depth systems integration expertise, together with experience in identifying third party services for specific technology requirements. This technical skill is reinforced by hands-on experience in organisational change, which can dramatically influence the efficiency and profitability of a retailer. This hands-on experience has proven to be a very useful complement to the business and financial acumen of our clients.

Assessment of commercial potential

This activity fits closely with work which we undertake for our retail clients as we develop or enhance their online channels and we are thus well-placed to offer this as a stand-alone or bundled service for investors.

Following a competitive analysis, assessment of the company's revenue drivers will include traffic level estimates/cost and conversion by source, basket size and returns. We use a time tested 'bottom up' revenue model based on all these assessments with a top down (market share) model to provide essential cross checking. Cost assessment of the resources required to achieve the ambition will cover marketing budgets, human resources, outsourced activities and IT systems.

Channel valuation

Valuing an online channel involves a detailed profit and loss forecast based on revenue and cost assessments, sensitivity and risk analysis (using advanced modelling techniques), discounted cash flow and multiples valuation methods, together with valuation of cross channel synergies.