By Gary Sankary
Location is Critical to Retail
Every retail transaction happens in a specific place for a reason. For every item that is purchased, regardless of channel, there is a trail of location specific data points that can give retailers insights into why customers behave the way they do.
Examples of location data can be; where the item was sourced, where the raw materials came from and the cost, how the item was distributed, what stores the item was placed in and finally where the item was purchased. Retailers need to understand if it was purchased in a brick and mortar store and carried home in the trunk, or if it was selected on a mobile device and delivered to the customers’ home an hour later. Each of the events are a series of transactions that happen in a specific place for a reason.
Every one of these locations; the store, the distribution center, the factory, the customer’s home is influenced by the geography and corresponding characteristics around it. A coffee retailer interested in introducing a new line of gourmet, whole bean coffee needs to understand who their target market is, and where they can be found. A retailer interested in enabling home delivery to extend their brand into their customers’ homes in order to drive loyalty and add value, has to be able to understand the costs of home delivery as well as manage a field workforce and the associated assets that go with this capability. Simply, deciding to take orders and sending groceries out with the catering van will not scale as more customers take advantage of this service. Not to mention as the competition begins to offer it and the capability matures from “nice to have” to table stakes.
The Value of Location Data
Best in class retailers are intersecting three data sets to implement their segmentation and marketing strategies effectively. Those data sets are; product information, customer information and location information.
ArcGIS enables a location data management approach to managing and leveraging this data. Our solution provides you with an understanding of where things are across your enterprise and how those things (stores, homes) relate to each other. It also provides insights about how location can impact your business, enabling you to be more efficient in moving products or providing services.
The Retail Capability Model- empowered with ArcGIS
As retailers have migrated from traditional Brick and Mortar Omnichannel, they have realized the need to develop applications and tools which are usable across all channels. Over the years, silo’ d channel specific development has created an environment where IT organizations are supporting redundant systems and processes. By taking a capability approach to retail, Esri will enable you to focus on what you do rather than how you do it. This allows you to build reusable technology while streamlining development costs and application support models.
Merchandising capabilities that are enhanced by Esri’s Location Enterprise Platform include:
- Assortment Planning
- Inventory Management
- Space Management
In addition, location enables key functionality in Business Intelligence and E-commerce by allowing retailers to attribute structured and unstructured data with location, providing a holistic view of customers’ activities online and in the store activities.
Capabilities Enhanced with Esri’s Enterprise Location
How does Esri support Assortment Planning?
- Providing market analysis to enable retailers to evaluate the demographic, lifestyle and geographic characteristics of a location in order to best identify how a range of products will perform in that location.
- Understanding the local conditions to explain and predict store performance. Proximity to or from competitors, main roads, highways, public transportation routes, all influence store performance.
- Providing the capability to create store clusters, based on selling and geographic characteristics that allow retailers to be more efficient in their planning and distribution activities.
- Esri’s platform allows you visualize location data from any source; Esri’s Tapestry Segmentation, AC Neilson Category Data or internal store data across your enterprise in easy to understand maps and tables.
How does Esri support Space Planning
Store Mapping is the process of creating a store merchandise plan at the category level.
- Esri’s location tools can utilize your existing store plans to create interactive store maps that can be served up to customers and team members on their devices that interactive experiences like routing a customer through the store while helping them find items and categories.
- Using device generated location data to create real time heat maps of customer movement through the store, giving insights a stores more productive space, the effect of in-store marketing or how moving categories affects store traffic.
Sourcing and Supply Chain
How does Esri support it?
The retailers supply chain is at the heart of their operations. Sales and profitability depend on a nimble and dynamic supply chain. Today that supply chain extends beyond the store, directly to customers’ front door.
- ArcGIS allows retailers to visualize fixed and moving assets like inventory, transportation networks and stores. Being to visualize this data real time allows decision makers to instantly asses how the supply chain is operating and where issues might be occurring.
- Using real time data from externals sources, like weather or traffic, retailers can assess disruptions and build contingency plans to mitigate the impact of a disruptive event.
- Traffic and weather can seamlessly be in incorporated in to route planning and home delivery capabilities. This allows retailers to accurately forecast and update delivery windows and provide their customers with consistently great service.