The landscape of retail has certainly changed over the last five years, especially with the growth of the internet and many businesses transforming into a hybrid of online and in-store opportunities.
Data is a fantastic resource for any business to utilize, especially when it comes to retailers who need as much information on their target customers as possible. How can location-based data benefit retailers in 2022? With 94% of marketers using location data in the next year for relevant promotions and ads, it’s definitely a marketing effort worth implementing as part of your strategy.
This guide will share with retailers how they can benefit from location-based data in order to drive more sales both in-store and online. At the end of this article, you should know more about how location-based data works and how it can positively impact your retail business this year.
The importance of data for businesses
Data can do a lot to benefit a business from identifying opportunities to connect more with your customers or staying one step ahead of the competition. It is useful for noticing current trends and predicting what could happen in the future.
Data comes in all different types and is an insight typically into consumer behavior, or to better understand your audience.
When a person steps into your store for the first time or onto your site, it’s important to get a full picture of the who, what, why, and how. Who are they? What are they coming into the store to shop for? Why have they chosen your store in particular? How did they discover you?
There’s no denying the importance of data and how it can help any business looking to grow and expand. In fact, 97.2% of organizations are investing in big data and AI, with the market itself set to reach around $103 billion by 2023.
With the data available, you can make more informed decisions that will hopefully benefit your retail business.
How does location analytics for retail work?
Location-based data helps provide location analytics for retail businesses that were previously unknown. This location intelligence will use information about the location the user is in and incorporates a wide range of elements that make up this specific area.
From geological information such as temperature and historical information like natural disasters. For the retail industry, it will often incorporate demographics regarding nearby businesses, which can be helpful for keeping ahead of competitors.
With location analytics, you can understand who lives in the area, how much money the average person makes and the type of homes they live in. From here, you can explore the social and lifestyle elements that make up their area too, which could influence the type of marketing you do.
As a retailer, you can use this location-based data in order to understand your customers and who might be a good fit as a buyer for your retail business. For omnichannel retailers, which means those who have both an online store and a brick-and-mortar store, it provides a link between the consumer in both these scenarios.
8 ways retailers benefit from location-based data
How can retailers benefit from location-based data? Now that you have a better understanding of how it works, let’s look at how you can use this information for your own company’s benefit.
1. Helps understand customer demographics
When it comes to your customer, the more you understand about them, the better success you’re likely to have when it comes to retail sales. You’ve got everything you need to know about the customers who shop at your store and therefore every decision you make is likely going to be backed by data.
With location-based data, you can target the areas around the country, or globe in some cases, where physical stores are needed. Using a retail site selection mapping software like Carto is useful for gathering critical intel that will provide insight into what your client base needs.
This type of software is readily available now and utilizes real-time technology to get up-to-date behavioral insights.
2. Provides the customers with a better user experience
In order for your customers to come back and shop with your retail business, you need to offer a better user experience. It’s something that can be very integral to retaining customers, something that’s extremely important with so much competition out there.
Despite retail holding a 63% customer retention rate on average, it’s still a percentage that can be improved upon. On average, not all retailers will be achieving over that halfway mark when it comes to retaining existing customers.
With location data, it helps to design a better user experience to meet the demands of the customer and hopefully give them enough reason to stick around. From developing better items to updating the marketing strategy, it all contributes to a better user experience.
3. Predict future customer behaviors and trends
With customer behaviors changing with the times and trends that occur in retail and the digital world, location-based data can help predict the future. While it might not always be 100% accurate, it can look at purchase history and customer habits to understand what customers might be looking for in their next purchases.
By analyzing this data, you can help discover the influences that drive the customer to make a purchase and how they might be influenced by new trends. Some customers may end up buying things they wouldn’t necessarily get but did so due to a popular trend. Having this information prior can certainly be helpful for your business.
4. Improve product and pricing decisions
In order to not overprice your products or alternatively, undersell yours, it’s important to improve any product and pricing decisions. Making these judgments can be hard when you don’t have any data to refer to.
According to Sidepost, with location-based analytics, you can take a look at how much a certain customer demographic may be able to afford and how this reflects across similar competitors in the area or online.
By being more accurate with your pricing decisions, it can ensure you sell more stock as a result - which means less waste!
The same goes for your product decisions and making sure you’re developing the right products or services that your customers actually want to buy.
5. Reduce spending on customer acquisition
When it comes to spending money on customer acquisition, it can be a costly expense over time. This is particularly so for those who are just starting out in the retail industry and may not have a lot of influence or presence on the market.
By investing in this sort of data collection, you can get real-time or near-to-real-time data that will help every marketing effort you make for your business online and offline.
Reduce your client acquisition costs by garnering more data about your customers. This will help to better target the right individuals when spending money on marketing.
6. Better identifies the customer persona
With all businesses, you are likely to have a variety of customer personas. You may have four different customer personas or a dozen, depending on the type of retail store you have and who it caters to.
Using this location-centric data, you can help deliver more detail to your ideal customer personas beyond just the bare bones that might only help you target them so far. You can then use these customer personas when it comes to product development and through your marketing efforts.
7. Improved targeted advertising
Targeted advertising can certainly help drive new customers through your doors and when it comes to generating advertising and marketing campaigns, location-based data helps.
Combining both online and offline behavior can help you understand what locations require and the type of marketing available. For some, they might benefit from digital advertising while some will engage more with advertising boards in the real world.
8. Helps with strategic business decisions
As a business, there can be decisions you make for your company that end up back-firing or not panning out the way you’d hoped. With some decisions, you can end up profiting majorly from it. To help improve the rate of success within your business strategy, data is integral.
Having information on your competitors, for example, can help you understand what they’re doing differently to excel. The data can also be useful for giving some sense of direction for your business in the near future and beyond.
Utilize location-based data and analytics for your retail business in 2022
If you’re looking to improve your position within the retail industry, then utilizing location-based data is going to help your business in 2022. Take a look at these tips and start implementing them into your business to drive sales and hopefully create a loyal community of customers who’ll come back again and again.
Natalie Redman (LinkedIn)
Freelance writer for many clients across multiple industries. Natalie has two years of copywriting experience. Natalie has a wide range of experience in copywriting for web pages for businesses across many industries. She’s also the owner of two blog websites and a Youtube content creator.