Retailers and retail real estate developers know all too well about the importance of location. But thanks to the growth and deployment of “Big Data,” companies are now able to provide greater context to a specific location.
And increasingly, the science behind this approach relies on “location intelligence,” noted Joe Francica, managing director of geospatial solutions at Pitney Bowes. Here, Francica explains location intelligence and how retailers and fashion apparel brands can use this data to increase sales and make more accurate and relevant connections with shoppers.
WWD: What exactly is “location intelligence”?
Joe Francica: Today, companies can track many more aspects of customer behavior from clicks to conversion rates to brand awareness with location intelligence.
Location intelligence is data that provides context of “where.” Visualizing data by location can be meaningful for business in several ways. Primarily, it can help reveal relationships between customers or operational data and geography. By utilizing location-based data and software solutions, users will see the proximity relationships inherent in their business data.
WWD: How can retailers and brands use geospatial solutions to increase sales?
J.F.: Location Intelligence enables hyper-local targeting so that retailers can present the right offer, at the right location at the right time on a digital device. On the digital side, retailers are increasingly using location information to better communicate with customers, create more targeted promotions, and promote sophisticated cross-selling opportunities through mobile and social channels.
However, there is still more ground to be covered.
In a new 2016 Pitney Bowes’ Global Online Shopping Survey, only one-third of global consumers (37 percent) and 30 percent of U.S. consumers say they still do not receive mobile notifications that are relevant to their location. Moreover, nearly one-quarter (23 percent) of U.S. consumers do not feel retailers understand their preferences.
This survey data shows that there is a clear opportunity here for retailers to use geospatial solutions to get closer to their customers by providing them with more personalized and targeted offerings. If businesses cannot understand their customers, they risk losing them. Loyalty has to be earned with every interaction, it is not guaranteed.
In addition, to create demand for in-store campaigns and promotions, savvy retailers are using location intelligence for strategic site selection. Using this technology, retailers can determine if competitors have market share in certain areas, what intersections and routes are heavily travelled and if their core customer base matches with the demographics of a certain area when deciding where to open new brick-and-mortar stores.
WWD: Aside from targeted marketing campaigns, how can companies use location intelligence to learn more about consumer behavior?
J.F.: We are seeing companies – across all industries – investing in big data solutions. Invest today in big data or get left behind. Companies are benefitting from the exploitation of big data – in a good way. However, processing massive amounts of location-based data will require solutions that are customized to the way users will want to ascertain business results.
- Financial Services companies can select optimal branch sites, re-evaluate underperforming branches and increase customer service by installing ATM locators.
- Telecommunication companies use GIS and mapping technology to create easily digestible maps to communicate with customers more efficiently and provide real-time updates. When a bad storm approaches and cable, Internet and cell phone connections cut out, telecoms can map out the problems in their network and clearly identify which customers have been affected, and can inform them of the latest developments and when service is likely to be restored.
- Philanthropic organizations use location intelligence to map demographics in a given area based on socioeconomic and lifestyle factors, as well as past history of donation, in order to determine where to best focus their fundraising efforts – both in terms of where to host events, and where to invest in local advertising and marketing with the greatest odds of conversion.
- The oil and gas industry uses location intelligence to determine the best placement not only of drill sites, but also pipelines and refineries based on local geographic and spatial factors that include geological profiles as well as risk.
- Healthcare organizations use location intelligence to map medical errors as well as the effectiveness of medication, allowing organizations to see if there’s a particular jurisdiction that may need better training.
WWD: From a data perspective, what other trends are you seeing in the market?
J.F.: Retailers are using beacon technology to capture indoor presence, footfall traffic and dwell time, thus requiring mobile apps that are opt-in.
As we’ve come to understand, all industries are impacted by location-based information. And while some software solutions answer the “who, what, how, and why” questions, location technology answers the “where” questions. We all “think spatially” on a daily basis, but sometimes we don’t always know that we’re asking these kinds of questions. For example, if you are in real estate, you may be asking where all of the class A office space is located within three miles of Main and Washington Streets where the traffic volume exceeds 10,000 cars per day and the baseline indicates a high population of white-collar workers. This is a typical “where” question.
This explosion of location-based data can be documented by observing the use of social media and mobile technology. From sensors to social media, data is captured with a location context. The use cases are many but the ability to handle the volume of data is challenging. Still, organizations that recognized the value of location-based information need tools to analyze these new data sources.
Industry analysts, including Gartner and Forrester, have evaluated location intelligence and recognized this as a key emerging technology and differentiator in the market for business intelligence software providers.
Today, we see the deployment of location intelligence in three primary categories: Visualization, Analytics and data fusion.
Users can visualize both base maps and data such as satellite or drone-based imagery; perform analysis on many different types of data from points, areas, streets or ancillary data such as demographics, lifestyle or risk-based data such as natural disasters and topography. And in the way of data fusion, we can combine both spatial and non-spatial data types together in a way that only maps will reveal unique relationships.