The world of retail is changing at a staggering pace. To remain on the cutting edge of competition, retailers are using point of interest (POI) and geospatial data to find the right infrastructure set in a perfect locality, send the right messages and attract the right people. To help retail business to become more profitable, it is important to understand the placement of the business, so that customers can find it on a map.
This is one of the major reasons why location technology has recently gained popularity in retail sector.
To determine the perfect location of a retail business, location intelligence helps in analyzing:
Recently, Unacast, a global location data and analytics platform partnered with Precisely, a global leader in data integrity software, to offer comprehensive, business-enhancing solutions for multinational retailers looking to expand to a new site. They offer insight into foot traffic and migration patterns, and can map customer profiles and data to optimize success in a new location.
Data on customer traffic, buying trends, competitor visits and more can provide immense insight into where, when and how to sell. “From site selection to laser targeted marketing, high-quality data is empowering retailers to retain a competitive market share, even when Amazon is only a tap away. And as described above, all of this information can be used to create the ideal customer profile”, says Thomas Walle, CEO and Co-founder, Unacast.
Location data helps refine a retailer’s understanding of which consumers live where and predict their behave. That data becomes useful when applied to decisions on store placement, store hours, product placement or pricing, geo targeted ads and more. “A full set of data can empower retailers to make predictive data-driven decisions for retail. This can mean making ahead-of-market decisions that future-proof retail operations”, adds Walle.
In order to find the perfect site for their businesses, it is important for retailers to know:
1. Who their target customers are?
2. What they purchase?
3. How frequently they purchase?
4. Where they come from?
Retailers who have physical branches depend heavily on location intelligence (LI) to better understand the market potential, to investigate or uncover new location opportunities, transform locations, and improve their operations. Andy Peloe, Product Management Director, Precisely explains that LI helps in understanding the basic necessities of a site selection:
Store’s catchment/ trade area: LI helps to define the extent of a store’s catchment/trade area and territory to assist measuring turnover performance and defining the target market. Retailers can use a pre-defined geography such as postcodes or census tracts to define territories and catchments. This is an easy way to analyse locations and deliver attributes for analysis.
Market dynamics: It helps to understand the dynamics, profile and context of a retailer’s market and how that impacts turnover and the decisions on marketing campaigns. Location demographics can be used to describe the customers who visit a retailer, which allows retailers to understand the impact local characteristics have on a store performance.
Competition – It helps to understand and measure competition (other stores) and the impact it has on performance, using location-based Points of Interest.
Finding the right location: It helps to measure and monitor store performance, like where should a retailer open and close stores, change store format and change merchandise.
Territory Planning: It helps to measure and monitor the performance and the structure of store territories, ensuring they are balanced and optimal (the right number in the right locations).
“Enriching digital customer records with location data, can be used to understand and improve customer lifetime value, increase cross-sell and up-sell revenues, analyse past customer performance and behaviour to identify successful strategies and roll out to appropriate segments, improve marketing campaign success rates resulting in increased marketing return-on-investment and more,” adds Peloe.
With the increase in usage of smart phones, businesses are able to procure crucial data such as customers frequently visit to a location or website, their reaction towards marketing campaigns, transaction history and time spent at the outlet or the website, etc. “Enterprises around the world are increasingly focused on utilizing data to make trusted business decisions. They require data with maximum accuracy, consistency, and context,” says Josh Rogers, CEO, Precisely.
Location and visitation activity data measures how and when places are visited, providing insights into what days/times a location sees foot traffic, how much and for how long. Across the globe, companies are looking to grow their businesses or improve the quality and strategy of planning.
“To do so, these entities need clean, aggregated, world-wide location data to gain a clear understanding of the people interacting with target locations,” adds Walle.
“With consumable and actionable location data, businesses can contextualize these large data sets to derive insights on human mobility. With human mobility data, brick and mortar businesses have the vital knowledge that affects important decision making such as competitive insights, site selection and demand forecasting,” he adds.
Data enrichment solutions can append and enhance existing collected information to deliver unprecedented insight into not only the competition but the location of the retail business as well.
Location intelligence combined with detailed mapping ensures a prospective retail store can open with line of sight regarding site procurement, development and leasing analyzed from several key perspectives.
By determining which sites are near, frequently-trafficked areas, a retailer can zero in on hotspots in order to ensure a successful move.
Peloe points out two ways how location data is helpful for retailers. He says, “One is by providing demographic information and ensuring a store location is accessible to/by a certain target demographic. Another way is the idea of routing – this is used to calculate how far most customers are willing to travel to visit a store and the impact this has on store performance, which in turn impacts the investment decisions on where to target and advertise.”
Walle sates, “Store location data gets more granular, focusing on geospatial information, which may include neighborhood traffic, retail foot traffic, POI visitation data/store visit tracking, competitor visit tracking, and customer catchment areas.”
Some ways in which this data can be meaningfully used are while tracking store traffic impacts, labour planning and scheduling models, which is often a high expense and cost-cutting opportunity for retailers. In understanding foot traffic and patterns, that can help retailers identify key selling periods. Applying traffic data helps multi-site retailers better determine key performance indicators (KPIs) and then benchmark those between different locations.
By pooling multiple data sets, a business’s growth potential can be estimated in light of local real estate development, demographic insights and the median income of the surrounding community.
Kenny Ling, Senior Project Manager at Unacast, says, “Flexibility is key – Unacast is able to take work off of company hands, and really dive into the granularity of the data that serves the needs of the business.”
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