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Retail GIS—Localization, Not Just Location

The importance of knowing your neighbor

Dorothy, this isn’t Kansas anymore. It could be Anytown, USA. On my last trip to Kansas, it wasn’t the wheat fields or flatness that amazed me but the repetitive retail landscape. It seemed that every town was a clone of the one I had just left—the same restaurant chains, grocers, drugstores, and general merchants. Was it an unholy alliance? Had real estate developers, government, and retailers reached perfect agreement on what every town needed and limited the choice to a small menu of options? However, the more I looked, the more I found exceptions. The harder I tried to quantify the way towns were similar to each other, the more I noticed the differences and came away knowing that local flavors dominate.
Doing business locally is the new kind of normal. After years of building out networks almost without limit, the current recession changed everything. Retailers that bucked the trend did so because they have what their customers want: stores in the right markets, the right products for their catchment, and enough sales opportunity to overcome competition and changing consumer tastes. Location and geography-based analysis have helped companies shift focus from opening stores to improving store revenue and creating better promotions. Coupons have become cool again. We’re not just clipping them from the local paper. We’re willing to get them online and via our phones because we benefit from letting retailers integrate our online habits with our in-store purchases.
Retailers get a lot from this exchange because everything is local. The lifeblood of a store is return customers. With detailed, local knowledge, retailers can go beyond segmentation and customer profiles to individual characteristics, localized assortment management, and product-level stratification. Loyalty and CRM data comes alive, so companies can spot trends and respond, reduce markdown risks, and improve the balance sheet.
Like Dorothy, I know there’s a journey that we need to take to gain courage, a heart, or knowledge. Are we ready for the challenges on the yellow brick road? I don’t know, but GIS sure looks like a good weapon against the miseries of the Wicked Witch of the Great Recession.

Is being local really helping retailers succeed in delivering what customers want?

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