To enhance store performance, companies need more than just a gut feeling-Retail Location Intelligence. The data that retail location intelligence offers allows brands to take a look at where their customers are, what they topically prefer, and the most effective methods to better reach them. As malls and consumer behaviour evolve, and planners put their foot down to develop cities, retailers have to rely on capturing location-based insights to make the best big-picture decisions.
By leveraging the latest in mapping tools and geospatial analytics technology, companies will avoid making false assumptions on retail-location strategy to optimize store presence across GCC international markets at the level of the UAE, Saudi Arabia, Qatar, etc. retailers launching a store or improving a current store network will be able to align their site strategy to local real-time intelligence and practical evidence when deciding where to launch.
Combining retail location intelligence with a strong execution-driven retail growth strategy will afford retailers a means of addressing some of the industry leading pain points, from the ability to grow physical store footfall, to creating practical operational efficiencies and helping them achieve higher levels of profitability. In short, retail location intelligence is becoming a necessity for companies that want to succeed in the long term.
What is Location Intelligence in Retail Context?
Retail location intelligence means utilizing geographic and spatial data to improve retail location decision-making. Retailers can map out demographics segmentation, customer behaviors, competitor positioning, and footfall traffic. For retailers, what it means to use retail location intelligence is having actionable data that influences everything from store location to where products are situated in stores. When applied to the Middle East within the context of Gloria Jean’s Coffees, an emerging market with retail hot spots such as Dubai and Riyadh, retailers that adopt retail location intelligence will outperform their competitors because they will be in the right place at the right time.
Technology tools associated with retail location intelligence include heat maps, mobile data analytics, and AI-driven prediction models have become a part of planning for modern retail location decisions on sites. Ultimately, the opportunity for retailers is to increase the success in identifying profitable zoned areas, have better understanding of regional market trends and decrease risk in allocated resources for expansion.
Understanding how retail location intelligence is a part of overall market entry strategy and can ensure the new store locations inventory aligns to customer market demand, are better positioned in the market to respond to trends and needs of their targets, and aligned with the forward growth of their brand for the years ahead. In other words, the utilization of retail-location intelligence enables retailers to make their physical brick-and-mortar retail operations smarter, innovative and driven by data.
Enhancing Market Entry Strategy with Geospatial Insights
When entering a new market in the Middle East, we must consider timing and precision. Every good market entry strategy is informed by retail location intelligence. Retailers can examine geospatial data to identify where different income clusters exist, the traffic density per area, community growth and development plans, and cultural taste in the region.
With retail location intelligence, brands can package and curate the characteristics of consumption for hyperlocal relevance. Instead of projected static demographic surveys, or anecdotal evidence of stores located ‘here’ or ‘there’, decision makers are able to use satellite images, journey footfall heatmaps and real-time location projection data to identify the optimal store location.
Monitoring competitor patterns and pinpointing areas experiencing under-service versus oversupply is crucial to ensuring markets are not saturated and there is room for innovation after entry. For instance, once the international brands have identified regions of oversupply, it provides a gateway for local or niche retailers to enter B2C markets. Including location-based KPIs during this stage aligns the operating resources for the field test or stage of entry. With retail location intelligence brands are able to confidently lease, stock, and hire as demanded by the local demand curve. A more intelligent, time sensitive pathway to scalability.
Retail Site Planning Backed by Data
Selecting a retail site involves much more than just finding an available lot; it is a critical strategic decision which can determine how your store will perform. Retail site selection using location intelligence means that planners can weigh all the variables: how close is it to transportation hubs; how saturated are competitors within a close range; how long do customers stay, and even parking choices! In many Middle Eastern countries, the urban environment can be multifaceted, and the diversity of these locations can make data-influenced planning essential.
Retailers can simulate the flow of traffic and from this information challenge sample combinations of location opportunities in order to minimize the risk of retail chain stores. For example, a coffee chain might look at a location in an office-heavy area with ambient low café density in terms of its coffee value chain. Using consumer segmentation could help ensure that the location’s store design and customer outreach to that catchment area is finely tuned. Attention to possibilities can help retailers ensure that new shops are not just placed – but retained! One last point: for those retailers that use retail chain expansion consultants some of the information above may be what they use to construct a credible site proposal as part of the retailer’s risk management process, for any single unit or store development project, things may result from a perceived level of risk at the site; data does not provide opinion in the retail way forward!
Optimizing Retail Growth Strategy through Smart Mapping
A strong retail growth plan is based on the right data, the right data, in real-time, that is where retail location intelligence fits into the picture. Using smart mapping tools to identify your highest-opportunity areas allows retailers to sequence their store roll-out and guarantees an even distribution of locations.
In the Middle East, as population density, buying behaviors, and distinct real estate prices are highly region dependent, it becomes even more important to be accurate. Smart mapping uses location intelligence to allow brands to model expansion scenarios based on revenue forecasts, competitor market share, local buying habits, digital engagement and how the culture will impact spend decisions.
As an example, an active lifestyle brand may find that a better return on investment might exist in tier 2 cities in Saudi Arabia given local data show increasing disposable incomes, and low competition. With location analytics teams are able to identify scenarios where a group of stores can be opened in phases with the capital spend that can be tolerated as part of a sustainable return. This type of location planning promotes quick-decision-making by identifying the right market locations, while protecting the business from operational risk, will save money and provide fuller access to customers.
Working with Retail Chain Expansion Consultants
Many brands realize the importance of retail chain expansion consultants. These consultants use retail location intelligence to provide data-driven recommendations on where to open next or how to optimize performance. Expansion consultants look at many variables to put together a cohesive strategy. These variables include analyzing local laws; consumer data; competitor maps; and cultural issues. With a location-smart consultant on the team, brands will have a comprehensive area development plan that takes many variables into consideration and includes a growth roadmap.
Consultants typically are on practice areas or platforms for location technology that includes traffic analysis, economic data and geofencing data. Because of their extensive knowledge and expertise in the area of retail location analysis, brands avoid expensive retail blunders like opening too many stores in the same market or opening in an area that has irregular traffic patterns. Consultants ensure that the growth advisory roadmap is aligned with actually where consumers migrate.
In the Middle East, consultants help navigate the complexities of local market restrictions; zoning laws; retail hierarchy within malls; and lease negotiations. Regardless of whether the brand wants to open 5 stores or 50 stores, the location-smart consultant ensures that strategic decisions moving forward are predicated on planned long term profitability.