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Home » Business News

Locating a strategic advantage in retail …

Submitted by on May 1, 2013 – 8:51 am |

Graham Wallace, - Esri UK - Locating a strategic advantage in retailLocation is playing an increasingly valuable role when analysing data, according to analytics strategist Graham Wallace, helping retailers like The Co-operative and Argos gain competitive advantage

The analysis of location-based data has traditionally been the domain of the major retailers, mainly in their property divisions. By analysing data on a map, retailers can reveal patterns and trends which would otherwise have remained hidden in traditional spreadsheets or tables of data.

Graham Wallace, senior strategist for geographic information system (GIS) software provider Esri UK, confirmed that creating a geographic view of business is already helping top UK retailers optimise their property portfolios, improve the performance of existing stores and create highly targeted marketing campaigns. For example, The Co-operative food retail division is using location analytics to support ambitious plans to open over 100 new stores each year, amongst other applications (see mini case study below).

New applications development

“Consumer behaviour coupled with the harsh trading climate is now forcing many retailers to re-examine how they apply their understanding of spatial data across their business,” he said. “Not only can the insight gained help drive sales and cut costs, but also create new business models to meet consumer expectations.”

Wallace said growing trends like click & collect, showrooming and home delivery can all benefit from spatial analysis. “If you can understand where both your store and online customers are, their buying behaviour and local demand, it helps decide where these services might be best deployed,” he explained. “Capital investment decisions relating to both physical store portfolios and the logistics needed to support online and mobile shopping then become easier to prioritise.”

Argos uses Esri software to gain a better understanding of its property portfolio strategy taking into account customer demand and competitor activity. “Location analytics are also currently used to help Argos to adapt its store network, making sure it offers optimum coverage of the UK and Ireland, so customers are able to benefit from convenient collection of items they have reserved online via its website, mobile sites or iPad app,” Wallace continued. The retailer is also using location analytics to help with operational efficiencies and to assist its distribution team to pinpoint key locations from which to grow the delivery operation.

Facing future challenges

One of the biggest challenges many retailers face in harnessing spatial data will be the creation a single source of geographic data across their business, he added. “This includes being able to make use of all types of geographic data, such as social and mobile data, or transforming existing information into spatial data.

“Meanwhile, recent advances in location-based app development are set to help cement personal links between brands and shoppers,” Wallace said. “The complex challenge of calculating a consumer’s exact location and translating this into a meaningful ‘place’ has been overcome. This means retailers and brands will be able to focus on creating engaging apps and services for the map-savvy consumer. Personalised offers aimed at individuals in real-time, as they enter a pre-defined area for example, will rapidly become common.”

As every vital question that retailers need to answer involves some kind of spatial data, the Esri strategist predicted that harnessing the potential of location is set to become a growing source of competitive advantage for all retailers. “Location-based data and location analytics are being used not only to help overcome today’s challenges but also to shape successful businesses of the future,” he concluded

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