Why should data inform
a retailer’s location?

Chief Commercial Officer Peter Denby in conversation with location planning expert, Asheeka Hyde.

Category:
Podcast

Series:
#2

Episode:
#8

Date:
June 2023

Stream on Spotify

Location is a determining factor for retail success.

Kirstie and Phill taught us “location, location, location” is key when it comes to buying residential property. And guess what? The same applies to retail.

According to Retail Gazette, a retailer’s location is a determining factor of its success. But it’s not an easy decision. There’s lots to consider when opening a store – from nearby competition and seasonality to customer demographics and area affluence.

In a retail world where footfall is declining and retailers are fighting to stay front of mind, it’s crucial to power location decisions using data and analytics. In this episode, we were joined by Asheeka Hyde, Dunelm’s Head of Trading Analytics, to talk everything location (location, location).

Location, location, location.

Location planning, or space analytics, examines a shop’s position, including how retailers can maximise store layout.

There’s variation between retailers, but typically location planning decisions centre around three questions:

  1. Is the proposed location near target customers? Are there enough target customers to sustain the store?
  2. Is the proposed location convenient for target customers? For example, if your target market own cars, is the shop easily accessible by car with space for parking? Conversely, if it’s a store that shoppers usually walk to, is it close to residential areas? Are there public transport links?
  3. Does the proposed location meet operational requirements, such as costs and shop size? Does it align with your business strategy?

The power of data and analytics.

In a world of 15-year leases and 10-year break clauses, data and analytics have an important role to play in location planning. Instead of replacing human decision makers, data science and machine learning accelerates the process. Analytics empowers people with the insight needed to make better business choices.

The data feeding into location planning decisions includes customer data (like demographics), location and geospatial data, competitor data, and data on operational extremes.

However, before starting with data, it’s often good practice to talk to your colleagues – i.e. those making location decisions; analysts; and business experts. Ask them how they make decisions and collect their hypotheses on what they think is important. Then find the data that allows you to test the hypotheses. Any gaps in the data should be made very clear.

Now the magic really starts.

Once you’ve got the location right, the magic really starts. The next step is to personalise the store to appeal to shoppers – using analytics to build a deep understanding of customers. This needs to be balanced, as consumers should be able to recognise your store as belonging to your brand.

Location planning isn’t just about your store’s physical location. It also takes store layout into consideration – including how this impacts customer experiences.

Customers should be able to easily shop in different stores in different locations – so there should be a level of symmetry and consistency. For example, John Lewis stores tend to follow a similar footprint.

Let the data lead decisions and make sure any changes have a real benefit for customers.

Delivering five star in-store customer experiences.

Providing great customer experiences is key for high street retailers.

First and foremost; customers should be able to locate the products they’re looking for both easily and quickly. Think about how consumers navigate a shop. Some use signs and markers to identify what they’re looking for. However, others use familiarity and best practice (for example, it’s usually safe to assume the cheese is located near the milk in a grocery store).

Similarly, offers and discounts should be moments of delight. They should be clearly marked, and it shouldn’t be difficult for consumers to work out which offer is the best value for money.

Customer service is also important – shoppers should be able to ask questions easily, otherwise there’s limited differentiation between shopping in-store and online.

Creating seamless, omnichannel customer journeys.

The coronavirus pandemic accelerated innovation in retail. Online shopping has surged in popularity, whilst adoption of ‘click and collect’ has increased. Customers expect retailers to know who they are and which channels they use – and there’s a growing intolerance for getting it wrong. Retailers should be viewing retail as one customer and one journey, irrespective of the multitude of touchpoints.

Are you using data to make effective retail decisions? Contact us to find out how decision intelligence can help lift ROI and customer experiences.

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