Wallet, keys, phone. That is what most of us think before we leave the house. Now that smart devices are permanently attached to our person, data from mobile devices has become incredibly useful. Connected to cell networks and frequently searching for WiFi and Bluetooth networks, our smartphones are constantly sending and receiving information. The nonstop bidirectional flow of mobile data, like location, morphs that piece of plastic and glass once used for phone calls into a record of our lives. Our mobile carriers know where we live, where we go, and when. But the real value of this data is when it is interpreted into the why.
Now retailers are finding ways to use mobile phone data to answer some of the important questions they are facing. In the era of e-commerce, opening a new physical retail location can be a huge risk. “Businesses need to recognize the power of location data, that it is becoming more powerful as time goes on,” said Joe Francica, Senior Director of Geospatial Strategy at Korem, a geospatial one-stop shop. “But if they don’t understand what they’re collecting, they quickly realize it’s a hard dataset to manage and analyze and that it can be hard to derive real value from it.”
There are two challenges to using mobile phone data: collecting data and translating data. Collecting data often raises eyebrows with security concerns but software has come a long way in protecting user identity. Anonymous data collection is one way, but another is user-provided information.
Foursquare, an independent location technology company, has built a deep understanding of how people move through the world by deploying privacy-first data practices rooted in transparency and user consent. The company, established in 2009, is no stranger to the benefits of using location data. While they once gamified the check-in process by awarding individuals with points and “mayor” status based on mobile-based activities, the company now helps brands and enterprises better understand consumer behaviors through foot traffic data analysis. “We’re no longer just the check-in app but we’re using data to help solve our customers’ challenges,” explained Ryan Chang Director of Enterprise Customer Success at Foursquare.
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Retail site selection is a complicated process. The first step is to look at the other businesses in the area. “Having a good understanding of complementary or competitive businesses is a good factor to consider,” Chang said. Next, he suggested understanding the density of the shopping area. But that is only the beginning. Chang explained that “eventually you want to try to understand the crowd’s shopping behavior.” This can be done by looking at unique points of interest like a Blue Bottle coffee or a Trader Joe’s. This raw data can create a holistic view of an environment, leading to analysis based on fact instead of core assumptions.
Understanding retail trends is important but what they really need to know is where retail in the area is going. “Predictive sales is really what we’re after at this point. If you’re a franchise, you should know how your entire network of stores is doing and how to forecast the sales growth,“ said Francica. The data can also be used to determine merchandise inventory and staffing.
This information isn’t just useful for individual stores, but malls, too. Francica continued, “Mall developers are looking at the highest and best use for their properties to combat declining foot traffic.” Malls are at an interesting pivot point. As it’s been said, “If you own a mall, you own a warehouse.” Not all malls are taking their new fate without a fight and high fidelity location data may be the fuel they need to accelerate towards their next chapter. However, all data isn’t created equal; “Foursquare more accurately takes raw data from mobile devices and gives us the truth about where users are going and if they’re actually coming to a brand or franchise,” explained Francica. “Stores want to know how many people stopped by. It’s important for brands to recognize they’re being successful. It’s our job to translate what the customer wants and the computer understands.”
It’s important for brands to recognize they’re being successful. It’s our job to translate what the customer wants and the computer understands.
Joe Francica, Senior Director of Geospatial Strategy, Korem
As data becomes more precise and connected, it will create accurate customer profiles and illuminate the customer journey. Knowing who shops at your business allows you to create more opportunities for similar customers to find you in different locations. Loyalty apps are how many consumers stay connected to their favorite retailer and these apps have stories to tell. This type of information will be foundational for retail marketing strategies and expansion plans.
No one could predict the struggles retail experienced in the last two years but even before that, retail was losing ground to e-commerce. Retailers are learning that the difference between the life and death of a retail location hinges on making the right choice for where it should sit. It isn’t enough to guess where a store will get sales. In order to make the right choice, retailers need to use mobile location data to better understand the potential sales of a retail location today and into the future.