Commentary

Location data is leading a retail revival: Here's how

Location data answers much more than just "Are buyers visiting my store?" It answers questions like "Which locations and audience segments do competitor's loyalists frequent?" and "How much market share are my marketing campaigns stealing from competitors?"

Photo source: iStock.com

April 28, 2017

By Drew Breunig, SVP, strategy, PlaceIQ

There's a lot more to location-aware insights than just understanding if an audience visited a place.

Today's retail brands are looking at these insights as a combination of the places consumer audiences visit, the understanding of their journey between places, and an understanding of their cross-shopping affinities. Location data answers much more than just "Are buyers visiting my store?" It answers questions like "Which locations and audience segments do competitor’s loyalists frequent?" and "How much market share are my marketing campaigns stealing from competitors?"

The retailers that are innovating are those moving forward with location data, analytics and insights to inform a host of decisions in the marketing realm and beyond.

This is where new ways to gather insights like visitation measure and share of visit analysis enter. Both are core components for understanding brand health and informing omnichannel decisions. They can provide a high-level temperature check about how your brand fares against the competition, as well as answer sophisticated questions about:

• Visitation shifts from market to market

• What the market average for visitation should be in a particular market

• Which areas are under or over performing, to identify markets that need more attention.

As an example of these types of analyses in action, let's take a high-level look at overall visitation to consumer electronics retailer RadioShack in Q4 2016. (RadioShack is not a PlaceIQ customer). This retailer recently cited decreased holiday sales as a contributing factor for announcing its second bankruptcy, and the closure of more than 200 stores.

By looking the average visitors per store for three top CE retailers, we see:

• On Black Friday Best Buy saw 2.9x more average visitors per store than the previous Friday

• HH Greg saw 2.2x more average visitors per store on Black Friday than the previous Friday

• Radio Shack's average visitors per store actually fell by 9 percent on Black Friday vs the previous Friday

That last point is especially telling because it shows how market shifts and trouble scenarios can be illustrated with location data. These insights can help retailers diagnose, react and better anticipate when and where they should invest to counter any 'misses.' According to research, 57 percent of men said electronics was their number one spending driver for Black Friday and Cyber Monday, while 53 percent of women stated electronics as their top purchasing priority. We see that demand for CE products drove significant Black Friday "bumps" to Best Buy and HH Gregg, but not to RadioShack however.

First party sales data can be used as a temperature check for retail performance, but location-aware insights can add several new dimensions. By using visitation trend analysis as a starting point, RadioShack and similar retail brands facing fierce competition could take further steps forward to diagnose brand pitfalls. Here's how they could put insights into action:

1. Cross category promotion: Analyzing dining or travel affinities for their audience of loyalists, to inform decisions about cross category promotions during the holiday season. If their target consumer audience over indexes for eating at Chick Fil A in November for example, the QSR chain could be a good fit as a partner.

2. Site selection: Understanding how their store locations affected visitation. Visualizing commute patterns for their target buyers can show if their physical stores are ideally located to attract a holiday buyer, and if not, the ideal areas to open subsequent stores or pop-ups.

3. Showrooming: Understanding missed opportunities for the holiday season, like audiences who visited RadioShack locations but did not make a purchase. Similarly, RadioShack could understand which competitors their target audiences ultimately visited after a RadioShack visit.

4. Competitive intelligence: Investigating when and where competitive CE retailers are gaining/losing market share, to help anticipate shifts and program timely counter-promotions into their calendar.

These use cases are just a small sampling of location data's versatility to inform a host of business and marketing decisions. Innovative retailers have already begun treating location data as a true horizontal business enabler to diagnose brand health, reach new frontiers, and drive their business forward in the process.