One thing the Covid-19 pandemic has taught us is that relying solely on insight driven by historical behaviour is no longer viable. The pandemic threw the entire world into turmoil, disrupting what used to be normal across all industries and sectors.
Retail has been one of the hardest hit sectors. There are no precedents anymore, so retailers need to be able to leverage data in real time to drive any sort of meaningful or actionable decision making. Location intelligence can assist retailers to improve service for customers both in store and online and deliver insights that can improve the efficiency and effectiveness of their business.
An interesting perspective first published on Harvard Business Review discusses a little considered consequence of the lock down – namely that the change in shopper’s behaviour has also resulted in a substantial reduction in behavioural data.
What this means is that many retailers, on top of their other challenges, must also deal with an information deficit. Retailers that have invested heavily in loyalty programs and other transactional analytics are finding that the data amassed before lock down is no longer relevant. In effect, everyone from established players to new kids on the block are in a similar, cold-start position.
Look to the future, not the past
Online retail has seen a surge, while bricks and mortar stores have experienced decreased footfall and reduced patronage as a result of the lockdown. Those that had not yet adapted to the digital economy prior to Covid-19 are struggling to survive, and we are already seeing the impact in the number of stores that have closed their doors.
With more people working from home, shopping patterns have completely shifted, and many factors, including lockdown and government restrictions, have changed the way customers interact. The long and short of it is, we cannot rely on historical data to predict the future anymore, since everything has changed and we do not know what the future looks like.
Retailers need to look at data more critically to identify emerging behaviours, rather than basing decisions purely on historical information. The pandemic is accelerating the shift from retrospective data analysis to forward-looking insight, comprised of new data sets, to deliver new insight.
Location, location, location
According to Forbes Insights, data-driven retailers are combining internal customer data, such as transaction histories and loyalty status, with external data sources, such as demographics, location and market data. Location intelligence can be used to inform decisions such as those around intelligence-based marketing, planning and expansion strategies, and cross-channel campaigns.
By analysing customer data in relation to location, retailers gain real insight into where their target customers reside, how they travel, what they purchase and more. Armed with this insight, retailers can determine the best sites for physical stores, as well as the most effective locations for distribution centres for online retail to minimise shipping costs and delays. Using this data, retailers can also gain a greater understanding of the best way to reach their target customers, whether this is online or at a physical store.
The main takeaway of Covid-19 is that there is no such thing as ‘business as usual’, particularly in retail. Buying, spending and general purchasing behaviours have changed, they are in a state of flux and it is uncertain as to when they may settle. We face an uncertain future, so agility is critical.
Location intelligence can help retailers understand shifting buying patterns and make more informed and accurate decisions around physical stores, online platforms, stock holding and more, especially in a changing world.