Retailers differ on the value of location analytics
Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
RSR’s first benchmark on location analytics in retail showed there are significant differences in focus depending on what kind of products a retailer sells, and some of the differences are counter-intuitive.
Retailers across the different verticals, performance and size all agree that “more targeted marketing” is essential to their future well-being.
But why, for example, would almost twice as many fashion retailers as fast-moving-consumer-goods (FMCG) and general merchandisers (GM) rank “improved merchandising plan localization” as a high-priority? Fashion retailers introduce new collections every season and typically execute relatively few replenishments after the initial allocation is delivered to the stores. Grocers, drug stores and big box merchants, on the other hand, have many more SKUs in their standardized assortments and replenish very frequently. The payback from assortment localization based on customer-centered analytics are far greater.
And why would almost twice as many FMCG and GM merchants as fashion merchants value location analytics to make smarter store site selections? Grocers and big box stores don’t flip locations nearly as often. Many fashion and specialty retailers are moving towards shorter leases and have a huge opportunity in pop-up store strategies. Such a strategy would be challenging without strong location analytics to back it up.
What are we supposed to make of these findings? Well, aside from the obvious need to put much more relevant content in front of consumers as they use their mobile devices to inform their shopping journeys, retailers have a lot to learn about locations analytics’ capabilities and promise. That’s a challenge for vendors selling location analytics solutions to retailers. They either have to put their backs to the wheel and educate the industry or find early adopters who are willing to be showcased.
The potential competitive advantages to be gained from using location analytics are compelling enough that I don’t expect early adopters will want to show the rest of the industry the way. And so when it comes to using location data for competitive advantage, the distance between Retail Winners and Laggards will get very big very fast.
- Big Differences In How Verticals View The Value Of Location Analytics – RSR Research
- Location Analytics: New Data, New Opportunities – RSR Research
DISCUSSION QUESTIONS: What do you think the retail industry knows and still has to learn about the potential benefits of location analytics? Where do you see the biggest potential benefit for retailers using location data analytics?