Category Archives: Demography
As retailers in 2017 continue to face headwinds, the competition is more challenging than ever. Customers are empowered by 24/7 access to the global marketplace. For many retailers, new store growth has slowed, so sales and margin growth are increasingly being driven more by incremental growth from existing stores. To continue to excel in this environment, every business should be mindful of three trends in retail big data:
- Sustainable growth – To grow sales in their existing stores, retailers must find innovative ways to reach customers and drive loyalty.
- Connected consumers – As consumers have become accustomed to growing transparency around the prices and quality of what they buy, retailers must find new ways to engage with and earn the loyalty of their customers.
- Explosion of big data – With the Internet of Things (IoT) maturing, retailers must leverage the vast amounts of useful data available within the network of devices and sensors that are connected online.
Retailers already have access to myriad data from sources like point of sale (POS), mobile devices, inventory management systems, and in-store sensors. As useful as this data is on its own, real insights happen when retailers can connect disparate data to see the conditions that bring success. And one powerful way to do this is by viewing data through the lens of location. Maps enable people to instantly spot and explore patterns and relationships in data.
Location is the common thread of data and enables decisions to be made about matters such as where to position existing merchandise and where to site new stores. Spatial analysis also allows retailers to more efficiently drive traffic through stores by effectively using the data typically only used in the online shopping environment. By tapping into insights derived from in-store sensors and customer mobile devices, retailers can make better decisions about where to allocate goods and employees in a strategic way that is targeted to consumer behavior. Forming a business strategy that leverages integrated location data helps retailers match the in-store customer experience with what consumers experience when shopping online. This is made possible by analyzing demographics, buying patterns, and customer movement in the context of space and time.
Spatial analysis is the key to understanding where, when, and why things happen. With this insight, retailers can engage existing and potential customers and spur in-store sales.
Many businesses have gleaned great returns by looking at operations through the lens of geographic science. The largest wins take on mythical status, as the impacts can be so profound that users want to keep the secret behind these rewards from competitors.
A few eye-opening anecdotes have come to light, including ones about the following:
- A global parcel delivery company that eliminated left-hand turns and implemented other distance- and time-saving measures for better routing that saved thousands of miles across the company’s fleet and hundreds of millions of dollars annually
- A national home repair service that improved its efficiency to the point that it could consolidate the number of call centers by two-thirds with an initial cost savings of $9 million and ongoing yearly savings of close to $50 million
- The chain of coffee shops that scrutinizes the link between store location and performance and finds per-store improvements with effects that are compounded across the chain’s network, including such results as how moving one store just one mile would gain a $10 million increase in yearly sales
At the heart of these wins, and many more, is an enterprise location strategy with Esri’s geographic information system (GIS) mapping software at the hub. GIS integrates with existing customer and enterprise systems, bringing location data, proven algorithms for analysis, and tailored applications to extend insightful information to the front lines of decision-making. Businesses use this powerful platform to reveal deeper understanding of their data.
The recently launched Esri Location Strategy for Business web pages contain information and tools to give every business user a taste of the kinds of spatial analysis available. The new Discover Local Insights application gives visitors a free ZIP code search for some of the key local psychographic variables that help reveal the values, opinions, interests, and lifestyles of customers.
“The application falls into our strategy of providing actionable information for business,” says Robby Deming, Esri marketing program manager. “It helps to show how Esri’s vast business and demographic data can provide even greater insight when combined with data that businesses already hold.”
Esri Tapestry Segmentation provides the power behind this application. Tapestry data contains the classification of all US residential neighborhoods, broken down into 67 unique segments based on demographic and socioeconomic characteristics. This data, along with more than 10,000 added Esri data variables, conveys a wealth of local insight.
In addition to presenting the psychographic segments, both the 15-minute drive-time area and five-mile-ring buffer area around the ZIP code can be overlaid on the map. These geoenriched polygons give users a greater sense of place while illustrating the intuitive and interactive nature of geospatial business analysis.
This free tool is available as a web application to any interested business. Work is under way to create a mobile-friendly version as well as to enable this application to be embedded in any website. Some of the functions being planned for development include the ability to compare ZIP codes side by side and generate drive times or buffers from any point on a map.
Many businesses have used these kinds of tools for decades to better understand their customers. The early adopters are now combining what they already know with new data feeds from in-store sensors, customer relationship management (CRM) systems, and other sources. Live information, such as weather conditions or social media mentions, can also be visualized to get up-to-date insight into factors that impact local business decisions.
“We’re using the Discover Local Insights application to give businesses a practical example of the powerful knowledge they can access through a location strategy,” says Deming. “Any commercial business that wants to know more can sign up for a free location strategy assessment, which includes a half-hour conversation with our technical and commercial business experts. We want to help people understand how their peers are driving business benefits from location technology. In addition, we’ll also provide them with a potential road map for developing their own location strategy that matches their business objectives and needs.”