Location Analysis is analysis undertaken on a given area to understand the environment from consumer demographics and shopper behaviour to distribution of local businesses, competitors, transportation links and any other proximity drivers that impact the people or businesses in a specific location.
A simple fact that many retailers fail to realise is that all locations are different due to the demographic of people that live and work in each area. Even major brands are often too focused on their own spending and returns to pay close enough attention to shopper behaviour and location analytics. Through careful location analysis; by building a case study of links between location and shopper needs and behaviour, retailers can see a return on their marketing spend.
When collecting data for location analytics, there are a wide range of key aspects that must be taken in to account to gain a thorough understanding. For example, it is important to consider who the buyers in the area are. Who would be using the store? It is essential to learn about the store user’s shopper behaviour as all locations are different, so even if you sell the same product or service, the audience will be different. Location analytics give retailers insight into what marketing strategies to take to push their consumer goods.
In order to have good insight as to the right location for a store, it is important to collect thorough and correct data on who the shopper demographic is. People of different affluence and social class, age, sex and ethnicity have different spending habits, so it is essential to know who the consumers in any location are.
Location analytics show how location has a dramatic influence over purchasing habits. In an area that is often densely populated, for example, a retail outlet or shopping centre with plenty of marketing competition, or in close proximity to transportation links, buyer behaviour can be extremely varied due to the range of different consumers found in these busy locations. Very often, busy retail environments with transportation links attract a demographic of people of all social classes, ages and ethnicity their motivations may also differ.
Perhaps most significant when gaining insight from analysing store location, retailers must consider the economic conditions of each area. In many areas of the UK, economic conditions differ greatly from location to location, due in part to the types of industry in the area, as well as their financial infrastructure and success. In order to see real returns on marketing spend, location analytics are absolutely crucial. Retailers must understand the links between location, its consumer demographic and trends in shopper behaviour brought on by the location and its population.