Basic information like a street address and plot number are no longer helpful for retail businesses in achieving meaningful insights. Location data has become necessary for any business to conduct in-depth analysis and market research. There were many significant technological advancements that happened in the retail industry for almost two decades. It is clear that nowadays, businesses recognize the benefits of location data in improving their store operations and customer interactions, increasing the revenue of their business growth.
Understanding the power of location data
As we see, location data does not pinpoint a particular place but also provides critical context about its activities and physical traits. One of the National Retail Federation’s (NRF) research indicates that 80% of purchases still happen in stores. In retail, selecting the right location is crucial. Such location data are useful to retailers in understanding the customer. They help them get to know their customers, discover their real competitors, and discover new opportunities to scale up their business and align with regional demands.
Optimizing retail operations with location data
Several factors contribute to the increase in profits in the retail industry. Most businesses concentrate on customer engagement, selecting optimal locations, and providing efficient storage arrangements, which are essential for optimizing retail operations and growth.
1. Aligning site characteristics
Many businesses prioritize the physical design and layout of a retail site to reflect operational needs and strategic positioning. Location data offers valuable insights that allow retailers to track customer movement and assess product placement. This is how businesses can position their store layouts and optimize storage by expanding shelf space, bringing new product categories, and improving customer flow.
2. Optimizing store location
Retailers must rely on location data to select the most strategic locations for their stores. By analyzing customer demographics and the proximity of their exact competitors, businesses can place their store locations, which will give them maximum visibility and accessibility. This approach will ensure their business has high potential customer engagement, driving higher foot traffic and sales.
3. Improving accessibility
Did you know that customer retention depends significantly on a store’s accessibility? Location data enables retailers to design their stores, keeping customer convenience in mind by optimizing entry points, parking arrangements, and internal pathways. These improvements ensure that customers can navigate the store easily, enhancing their overall shopping experience.
Revolutionizing supply chain and inventory management
Research shows that over 78% of businesses utilize location data for supply chain operations and inventory management. This data serves as a foundation for actionable insights, enabling organizations to identify trends, predict customer behavior, and optimize market strategies to increase revenue.
1. Enhancing supply chain
Location data facilitates logistics tracking, from acquiring raw materials to delivering finished goods. This enhanced visibility helps businesses monitor each stage of the process and identify inefficiencies, ensuring timely deliveries and cost savings.
2. Enabling predictive analytics
Location data helps businesses predict demand fluctuations and adjust inventory levels accordingly. This prepares them for any disruptions or uncertainties and ensures the supply chains are robust and responsive.
3. Streamlining warehouse operations
Location data improves warehouse efficiency by optimizing inventory placement and reducing handling times. Monitoring the movement of goods within the warehouse ensures better organization, faster order fulfillment, and lower labor costs.
Enhancing the customer experience
Location-based strategies allow retailers to deliver personalized, timely, and relevant customer interactions. By leveraging real-time location data, businesses can gain insights into outlet performance and offer personalized recommendations to improve overall customer satisfaction.
1. Accurate store information
Location data allows retailers to provide accurate and up-to-date details about their stores, such as operating hours, contact numbers, and customer reviews. This information is crucial for helping customers find the right store at the right time. Accurate store timings and contact details ensure customers can easily plan their visits, while reviews and feedback provide transparency, building trust and enhancing the overall customer experience.
2. Personalized recommendations
Location data enables retailers to send personalized communications, such as discounts or special offers, to customers when they are near or inside the store. These location-triggered messages ensure relevance and timely engagement, enhancing the customer journey and strengthening brand loyalty.
3. Branch-level insights
Location data also offers valuable insights at the branch level. By analyzing key performance indicators (KPIs) such as customer service quality, employee performance, and customer retention, businesses can identify areas for improvement. This data-driven approach enables better decision-making, improving both the customer experience and profitability across multiple locations.
Using location data to make business decisions
Location data is a powerful tool for making informed business decisions, especially regarding expansion and consumer targeting. By understanding customer geographic distribution, businesses can identify areas of high demand, determine ideal locations for new outlets, and tap into regions with strong growth potential.
Location data also helps businesses select spots that align with their brand image and accessibility, ensuring higher foot traffic and more frequent visits. It can also aid in optimizing costs, supplier management, and positioning strategies. Strategic decisions about store locations are crucial for long-term success, though selecting the right location is often a complex process that requires careful analysis.
The future of retail with location data
In the JLL Experience Matters 2024 poll, 67% of customers in ten countries favored in-person buying over internet shopping. Looking ahead, the role of location data will expand as technologies like artificial intelligence and augmented reality integrate into retail. By embracing these technologies, retailers can gain a deep understanding of customer behaviors, create highly personalized experiences, and make informed strategic decisions. Here are the upcoming technologies that leverage location data for the retail industry.
- Micro-geofencing: Micro-geofencing goes beyond simply detecting when a customer enters a store. It provides turn-by-turn navigation, pinpointing the customer’s location within the store and helping them find specific products.
- In-store automation: This will leverage location data to optimize in-store operations and guide customers to self-checkout kiosks or direct them to available real-time customer service assistance.
- Predictive analytics: This will integrate with location data, ensuring the business has the right stock available across all the other locations and driving sales.
Conclusion
As technological advancement continues, location data has become an important resource in the retail industry. Retailers can use it as a foundation to plan their supply chains and other operations to enhance customers’ overall purchase experiences. For this, they must select a reliable partner for accurate and comprehensive location data. Xtract.io, a pioneer in the industry for almost thirty years, can help your retail business expand its horizons. Try a demo today.
