The importance of retail location analytics

4 min read

For any retailer, your customers are what keep you in business. But encouraging customers to visit your store and spend their money is by no means easy. One of the ways you can use data to help drive your decisions and grow your business is through retail location analytics.

But just how important is retail location analytics and should your business use location-related data? We’ll take a look at the impact of retail location analytics in our blog below, and how, when and why you can use it to make smarter decisions.

What is location analytics?

Retail location analytics is the process of collating and analysing data related to customers and how they engage with the physical location of your retail business. It helps you understand trends, behaviours, preferences and patterns.

You can use the insights you gather to make data-driven decisions on how to maximise the impact of your physical stores, improve inventory management, boost your marketing strategy and determine ideal locations.

How does it work?

Retail location analytics is a valuable tool that can help you get ahead of your competitors by gaining valuable insights that tell you how your customers act in a physical space.

Data can be collated through smartphones, wearables, sensors or IoT devices – basically, anything with GPS. It shows where your customers are in the store so you can monitor how they interact and engage, allowing you to continuously improve the customer experience.

As with any type of data collection, customers must opt in and agree for their data to be collated.

Once you have your data, it can be cleaned and analysed to provide actionable insights. Data can be visualised in reports and interactive dashboards, such as through the use of heat maps, predictive modelling and statistical analytics. These insights can then influence decisions you make to your store to improve layouts, help customers find the most popular products, maximise upsells and more.

How can location analytics help your business?

Location analytics is a fantastic tool that can help multiple aspects of your business. It enables you to make data-led decisions so you continue to make improvements that can enhance the customer experience and drive sales.

Here are five ways location analytics can help your retail business:

1. Measuring success

Retail location analytics can help you determine the effectiveness of your strategies. There are many metrics your business can use to determine success related to location analytics, including: 

• Sales per square foot
• Foot traffic
• Inventory turnover
• Marketing ROI
• Conversion rates
• Revenue growth
• Cost savings
• Loss prevention
• Compliance and safety

2. Understanding stock levels

Retail location analytics is a great tool for helping you understand stock levels, which has a major impact on customer satisfaction, operational efficiency and cash flow.

Location analytics offer you real-time visibility across the business, so you can accurately monitor stock levels at different stores to make informed decisions about when to order more. This reduces over-ordering and makes sure you maintain a healthy level of stock.

3. Understanding customer behaviour

For your retail business to be a success, you need to know what makes your customers tick. This is simple when it comes to your website, but with retail location analytics, you can get similar insights with your physical stores.

You can identify how customers move around your store, peak times and how long customers spend in specific locations. This, together with purchase behaviour, lets you optimise the customer experience both in-store and with your marketing strategies.

4. Customer Segmentation

Retail location analytics can offer an additional dimension to segmenting your customers by offering spatial data that allows you to get even more specific.

Not only can you segment your customers by age, gender, income and other demographic data, but you can also segment by behaviours including where customers spend time in-store. For example, do they spend time browsing a specific type of product but don’t make a purchase? You could send a bespoke offer to this type of customer to finally get them to convert.

5. Delivering localised offers

Sending customers personalised offers that are specific to their location and based on analytical data is a great way to engage customers. 

Offers can be sent via text, email, mobile app or social media. This may be based on geographical location or data related to previous behaviours and purchase history. Data can be used to understand what customers want and what pain points they need to overcome so you can increase the likelihood of conversion.

Some examples of how you can use location data

Location data is an incredibly useful tool to have at your disposal and offers you insight into your customers in ways that other types of data can’t. That means you take fewer risks and make decisions based on reliable information.

Here are just a few examples of how you can use location data at your retail business:

• Identify the ideal location for opening new retail locations as your business grows
• Optimise the layout of your store to improve the customer experience and sales
• Create highly targeted and effective marketing campaigns that are budget-friendly and have high levels of engagement
• Improve inventory management and logistics
• Identify the best location for warehouses and suppliers
• Add an additional layer to customer segmentation to improve marketing strategies and the products you sell

See how Apteco software can help your business

Data is the secret to running a successful retail business that continues to attract and retain customers. Without harnessing the power of data, your business will struggle to grow and you risk falling behind your competitors.

This counts doubly so when it comes to retail location analytics. It’s a weapon you can add to your arsenal that will set you apart and improve various strategies, from marketing to staffing.

Learn more about how Apteco supports retailers and discover how you can use location analytics at your retail business.