The world of retail is constantly changing and becoming increasingly competitive, meaning retail organisations can no longer rely on their gut instincts when it comes to meeting the needs of customers. Today’s retailers must look to advanced location intelligence and a wealth of data sources to adapt, grow and compete more effectively.
This is according to Stuart Martin, Geospatial Data Lead of Esri South Africa, specialist in spatial and location insights.
Martin says traditional approaches are no longer enough to keep shopping centres and retail stores competitive: “In the past, retailers looked at metrics such as demographics, competitors and spending patterns to understand the customers and service areas (drive-time) around their shops, which could be impacted by natural barriers such as highways, railways, etc.”
However, today’s shoppers are more mobile, less loyal and tend to shop across myriad online and in-store channels. Good old-fashioned gut feel and knowing your customers are no longer enough to ensure that shoppers keep coming back.
Adapting to a changing environment
Martin says: “Retail has changed, partly owing to the move towards online app-based shopping, and changing expectations of what a shopping mall should offer. As a result, shopping malls are having to re-invent themselves to attract consumers through an optimal tenant mix, while also being sensitive to the finer nuances that attract customers, such as attractions for Gen-Z and Gen-Alphas, free undercover parking, a fresh and safe environment, good coffee shops, restaurants and gyms.” This is echoed by Sheny Medani, director at Market Decisions, which is leading this field through the provision of innovative insights into the changing nature of consumers.
Martin adds that shoppers are also looking towards community malls and smaller convenience stores, which is seen through the plethora of shops appearing in service stations and in some cases are becoming the place to buy daily requirements, collect courier packages and take advantage of a variety of other services.
“Going forward, retailers will need to be cognisant of changing demographics, cultural biases and generational changes, and staying abreast of these trends will position a retailer going forward. People’s buying behaviour can be extremely specific and requires a suite of data and approach to understand the finer nuances of a lady with children visiting a shopping mall, or an office worker shopping on the way home.”
Retailers can use mobile field worker tools to capture metrics, such as the state of a shopping centre or the size of the parking bays in their weekly/monthly visits to their stores and feed these insights back into the analysis.
“Retailers are being forced to question the traditional approaches to placing stores and forcing them to be innovative in how they leverage both traditional and new metrics to understand the requirements,” he says. This could include analysing store loyalty cards to map the location of the customers and understand their buying behaviours in terms of basket size, time of day, average spend, branches visited, etc.
Mapping the future of retail
Martin emphasises that spatial layers, integrated with a variety of other datasets, can help retailers grow their businesses. “Few South African retailers are optimising spatial data yet, but if they did, they could start understanding what their customers want now and what they will want in future, as well as how they can better challenge their competitors,” he says.
“Insights can also be derived from other operational datasets such as property transfer records, which highlight the dynamics in a suburb, including age of buyer/seller, value of the property and changes in land use through densification.
Martin adds that these metrics are being complemented by modern approaches that take advantage of the rise in mobility-derived data, which allows one to understand movement patterns, relationships and context. “Here, we can use mobility data to understand where the consumers are coming from, where they reside and if they visit other competitors or complementary stores on a regular basis,” he says. The rise of artificial intelligence in the geospatial environment is also helping to map houses, roads, etc, from satellite imagery and can provide sophisticated predictive analytics to leverage these datasets.
Bringing it all together
Fusing publicly available spatial datasets, demographics information, loyalty card data and even parking metrics can offer retailers deeper insights into the changing market around them and their customers' buying behaviour.
“This is an exciting environment where layers of spatial data (maps) all add up to show the bigger picture, reaffirming the adage ‘a picture paints a thousand words’,” he says.
Esri South Africa, in combination with its data partners, can provide tailor-made solutions to assist retailers in these exciting times.
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