by Claire O’Neill
It is widely known that brick-and-mortar stores have been hit with declining sales in recent years, mainly due to the rise of e-commerce giants such as Amazon.com. At the same time, according to the Pew Research Center, 77% of Americans have cellphones and a majority of shoppers are using cell phones while they shop in physical stores. These trends have forced managers in the consumer goods industry to turn to non-traditional advertising and to try new marketing techniques in hopes to refresh tired processes and give retail stores new life.
Location technology is now at the forefront of this vital innovation. It encompasses all of the methods that retailers use to extract and utilize product and consumer geospatial data in an effort to support meaningful and effective decision making and increase competitive advantage.
A few of the current mainstream location technology tools and techniques include the use of beacon technology, radio-frequency identification tags (RFID), and geocoding. Together, they are giving retailers a competitive edge through the geo-enrichment of business data sets.
Beacon technology is stimulating the customer journey, using low-energy Bluetooth hardware transmitters to send alerts to consumers as they browse, in the form of relevant product-related information or promotional discounts. The uses of mobile apps take beacon technology to the next level by storing a consumer’s prior shopping and spending habits. The hyper-personalization involved with beacon technology gives retailers the opportunity to build loyalty and sales through the specific targeting of unique consumer identities.
NBA and MLB American sports teams such as the Orlando Magic and the San Francisco Giants have opened up new revenue streams through the use of beacon technology to promote sponsored content, to regain revenue from lost ticket sales, and to promote merchandise and food and beverage spending in their stadiums, according to reports in Ad Age and elsewhere.
RFID tags have revolutionized product identification, decreasing waste and reducing expenses by diminishing out-of-stock incidents and simplifying stock counts. One of the biggest benefits of RFID tags is the BOPIS Advantage (buy online, pick-up in-store) which reduces inventory headaches. In the future, RFID tags will be commonplace at all checkouts, allowing staff to process every tagged item in a shopping cart with the click of an electronic scanner. This single location tool will have a transformational effect on the overall customer experience.
Geocoding is the process of transforming a street address into a spatial location on the Earth’s surface. Geofencing, geotargeting and geoconquesting are all aspects of geocoding that retailers use to reach crowds of potential customers that they would not have had access to otherwise, through the use of location-based push notifications. While geotargeting, notifying consumers located in a specific area, and geofencing, notifying consumers that enter or leave a virtual boundary, entice neutral spenders, geoconquesting pushes notifications to consumers that approach competitor stores.
Fast food restaurant McDonald’s has an app that now has a feature allowing customers to order and pay via mobile, according to reports in TechCrunch. Then, the app uses geofencing to track the customer’s location as they approach the restaurant allowing employees to know when to begin food preparation in order to avoid overstaffing, wait times, and most importantly, cold food.
According to Claire Valoti, a UK general manager of Snap Inc., 72% of Snapchat users send snaps while shopping and 60% of users send snaps of their retail purchases, as reported by Retail Week. Retailers have found a way to harness the power of this entirely new form of organic consumer marketing through the use of promotional geofilters, which are creative films that can be placed over snaps, available only within certain areas. These filters can advertise new campaigns, new product launches, or even limited-time-only pop-up shops.
Geographic analysis can give retailers the ability to practice other profit capitalization techniques such as strategic store location planning, car park car-counting for logistical analysis, and outdoor advertising during peak times of heavy, targeted consumer traffic, among other value-adding activities.
Location Intelligence Brings Order to Retail
As the vast majority of business data now has a location component, the prospect of attaining location intelligence is imperative. Think of location as a ‘common key’ linking paralleled data sets and revealing previously unidentified connections. For example, a relationship could be made between store sales targets and the population within a certain distance of them or between competitor store locations and consumer locations, or between regional weather patterns and customer drive-time to a store.
Capturing new, individual consumer location data is what many retailers deem to be vital to their continued success, but true location intelligence also includes deep analysis of other forms of existing location data. Retailers now have the ability to completely tie all customer information, such as individual demographics and purchasing power, to a specific home address. They can also use location intelligence to take into account exact notable locations and analyze how those hot spots may impact foot traffic, spending habits, and most importantly, sales.
The Right Technology for Location Data Enrichment
In order for retailers to maintain competitive advantage in the data-rich, omnichannel world of retail, they must have the software capabilities to process large amounts of big data in real-time. Having on-demand analytics is imperative in the world of rapidly shifting consumer demands.
Time and place are highly relative. Location data for retailers only has value when it is associated with a time-stamp. As the world’s leading high-speed, time-series database, kdb+ takes care of the ‘when’ while location intelligence can find the ‘where’.
Kx for Retail, with its world renowned, cutting edge technology and industry-specific analytic experts, can help businesses unlock the full value of their data. Kx data scientists have innovative yet simple solutions that are necessary to carry out big data analytics alongside advanced spatial analytics.
To find out more about Kx for Retail contact us at firstname.lastname@example.org.
Claire O’Neill is a global business development executive for Kx currently based in Newry, Northern Ireland.