Location intelligence is now widely used to improve a variety of marketing and advertising activities. The tools and data now available enable decision makers to make evidence based decisions to improve their campaigns based on knowing who their target market is, where they live and work and how they spend their money. While location intelligence has an impact in improving the effectiveness in traditional marketing and advertising it can also have a significant impact in improving the measurement of the 3% of spend on outdoor advertising (billboards, buses/transit, bus shelters etc).
Location Intelligence can be used to consider how different characteristics of proposed locations align with the organisation’s business needs. Organisations may classify retail site desirability, based on its centrality and accessibility within a region whose residents share common demographic and behavioural attributes.
Depending on the target market, different infrastructure issues have to be considered. If students are the target market for a retailer, then being close to public transport is essential. If targeting older demographic then good parking options, easy store access and close public transport access would be important. Or perhaps you might be targeting convenience purchasers on their way home from work. The store therefore, should be located on a main thoroughfare.
In such a competitive industry like retail, businesses need to put their customer and transaction data to work – to enhance decision support to gain competitive advantage. It is imperative a business understands the relationships between trade area demographics, customer profiles and competition for prime site selection and business growth. This information in-turn formulates the value of an area for a business’s products and services. With it retailers can generate more accurate site-specific sales forecasts and create a compelling customer acquisition strategy.
Trade area analysis has its focus on locating and describing the target market. Analysing the trade area is important to determine the reach of existing and new store locations and if sufficient target customers reside within the trade area. To analyse trade areas, the use of Location Intelligence is essential to effectively model physical trade areas. The accuracy of these models will depend on the number of variables being considered, like customer location, competitors and consumer spend or attitudinal data.
Retail is all about relevance: right product, right place, right time, and right price. Of all these factors, it is location which is most fundamental to the success of a bricks and mortar retail business and the use of location intelligence to drive decision making can be the difference between retail success and failure.