Guitar Center, a leading retailer of musical instruments and accessories, faced the challenge of optimizing site selection and expansion while minimizing risk. With over 550 locations under its Guitar Center and Music & Arts brands, the company needed a data-driven approach to site selection, store relocations, and lease negotiations. By partnering with Tango, Guitar Center leveraged advanced analytics to refine its real estate strategy, ensuring sustainable growth and operational efficiency.
Prior to working with Tango, Guitar Center faced several key challenges:
We’ve been able to minimize the error margin in sales forecasting analysis and better understand cannibalization effects.
Guitar Center has historically relied on intuition and traditional market research for site selection. By implementing Tango’s predictive analytics, the company now uses data-driven insights to minimize risk and strategically position stores. The Tango solution forecasts sales performance, accounting for customer travel patterns, and determining the impact of new openings on existing locations. As Pedro Vasquez, Director of Real Estate, noted, “We’ve been able to minimize the error margin in sales forecasting analysis and better understand cannibalization effects.”
With the rise of e-commerce, Guitar Center needed to ensure that its physical stores complemented its digital presence. Through Tango’s platform, the company identified a “halo effect” where brick-and-mortar stores boosted online sales in the new store and surrounding store trade areas. Understanding this relationship allowed Guitar Center to make informed decisions on where to establish new locations, ensuring that each store added value to both the physical and digital sales channels.
Guitar Center expanded into non-traditional markets, including military bases and border towns, by leveraging Tango’s forecasting models. The company analyzed existing e-commerce sales from these regions to gauge in-person demand. Additionally, understanding co-tenants and local economic activity helped determine whether a store would be successful in isolated areas like Anchorage and Hawaii.
Tango’s platform allowed Guitar Center to refine its customer targeting strategies by analyzing psychographics and demographics. This ensured that new locations were placed in areas with a high concentration of serious musicians—Guitar Center’s core audience. “Tango takes a lot of the guesswork out of site selection,” Vasquez explained. “It helps us focus on the three best sites in a given market instead of casting a wide net.”
By integrating Tango’s advanced analytics, Guitar Center has successfully transformed its real estate strategy. The combination of data-driven insights, strategic site selection, and omnichannel integration positions the company for continued success in a rapidly evolving retail landscape.