{"id":214372,"date":"2025-06-05T05:35:43","date_gmt":"2025-06-05T12:35:43","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=214372"},"modified":"2025-08-11T13:12:47","modified_gmt":"2025-08-11T20:12:47","slug":"confidence-in-new-markets","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/confidence-in-new-markets","title":{"rendered":"Finding the Confidence to Grow a Business"},"author":501,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","transcript_file":"","podmotor_file_id":"","podmotor_episode_id":"","castos_file_data":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","_links_to":"","_links_to_target":""},"categories":[1001,381312,791,971],"tags":[303812,281,324332],"department":[476812,476792],"wherenext-category":[],"industry":[],"class_list":["post-214372","wherenext","type-wherenext","status-publish","format-standard","hentry","category-commercial","category-cxo-priorities","category-digital-transformation","category-location-strategy","tag-business-planning","tag-location-intelligence","tag-market-intelligence","department-business-growth","department-cxo-priorities"],"acf":{"short_description":"Executives are seeking and finding expansion opportunities. New forms of data are pointing the way.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"When a company is looking for new customers, its executives have two basic choices: Find new prospects within the existing footprint or forge a path into new markets. The latter is often more daunting, since deciding which markets to enter is fraught with risk. Executives of an earlier generation used to make these decisions with a greater margin for error. But profits are thinner now, and the competition both bolder and faster. As a result, market intelligence must be ever more precise."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Right","content":"Article Snapshot:<\/strong> Growing businesses are entering new markets with more confidence, thanks to data that reveals the demographics and buying habits of local consumers.","snippet":""},{"acf_fc_layout":"content","content":"Companies are now using new forms of data and analysis\u2014and, in some cases, artificial intelligence (AI)\u2014to bolster confidence as they enter new markets. Retailers, banks, restaurants, and consumer packaged goods companies are analyzing location-specific data to get a detailed read on each new market. These businesses are gauging how a market\u2019s demographics, psychographics, and economic trends complement their mission.\r\n\r\nSelecting a new market based on location intelligence<\/a> is a form of data-driven decision-making. Gartner research vice president Mike Rollings recently wrote about the need for data and analytics to take center stage<\/a> in the digital age, as opposed to playing a supporting role. Forrester weighed in<\/a> as well, saying companies that leverage data-driven decisions to uncover competitive advantage grow an average of more than 30 percent annually.\r\n\r\nLeading companies that face the all-important question of where to go next are using location intelligence to vet potential markets. The primary engine of that intelligence is a planning tool called a geographic information system (GIS), which maps the location of\u2014and relationships between\u2014consumer trends, spending patterns, and other data in potential markets. The upshot: these global executives are basing decisions on insights-driven data rather than supposition.\r\n\r\nImproving the Odds of Market Success<\/strong>\r\n\r\nTraditionally, a retailer might plan to move into three new markets knowing that one might thrive, the second might perform adequately, and the third could fail. Today, every business that wants to grow needs to be much more precise. Making the wrong choice carries a double penalty\u2014the investment lost due to entering the wrong market and the opportunity cost of not choosing the right market."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Right","content":"Halo Forecasting: Ever More Precise<\/strong>\r\n\r\nHalo forecasting is a new technique to help organizations pinpoint fertile new markets. It combines artificial intelligence<\/a>\u00a0and the capabilities of the geospatial cloud to change the way executives plan a business.\r\n\r\nPowered by an AI-based prediction engine, halo forecasting calculates the revenue a company can expect from any potential market\u2014or series of markets. Its distinguishing feature is the ability to see across channels, predicting not just potential store revenue but also potential online sales. This WhereNext<\/em> article<\/a> provides an inside look at how the geospatial cloud and AI make this possible.","snippet":""},{"acf_fc_layout":"content","content":"Savvy executives are using data analytics to remove guesswork, with tools such as GIS that steer them to markets most likely to favor success. According to the Harvard Business Review<\/em><\/a>, GIS-powered mapping allows analysis of information from a wide variety of public and private sources\u2014including demographic data and physical markers such as post offices, banks, schools, and hospitals\u2014layered with data on values, attitudes, and behavior of different groups.\u00a0Taken together, this granular information forms a reliable vision of opportunity, giving executives confidence to execute growth plans.\r\n\r\nOXXO\u2019s Formula for Expansion Success <\/strong>\r\n\r\nMexican convenience store chain OXXO is using GIS technology to propel its remarkable growth plans. The chain now has more than 23,000 stores and is on a consistent pace of over 1,000 openings annually, with significant potential for further acquisitions in coming years. OXXO plans to nearly double its store count in the years ahead, according to Enrique Espinosa, an expansion manager at the company. To reach that growth target, OXXO is setting its sights on untapped South American markets in Peru, Chile, Colombia, and Brazil.\r\n\r\nThe company\u2019s challenge is to understand local needs and business conditions in these three countries where it has never done business. Though there are many similarities between Mexico and the new markets, there are also major differences.\r\n\r\n\u201cPeople are people here in Mexico or in Chile, so we both eat at certain times and leave work at about the same times,\u201d Espinosa says. When someone is on his way back home, for example, OXXO has the opportunity to provide whatever he needs at the moment, whether that be a quick snack on the way to an evening activity or final items on the list for tonight\u2019s dinner. OXXO stores come in three varieties\u2014small convenience stores for on-the-go purchases, larger outlets akin to grocery stores, and locations that combine both formats. All stores handle financial transactions such as bill payments, money transfers, and replenishment of calling cards."},{"acf_fc_layout":"form","form_type":"aside","form_position":"Left","form_title":"THE ESRI BRIEF","form_desc":"A biweekly email connecting senior executives and business leaders with thought-provoking articles on location intelligence and critical technology trends.","form_button_label":"Sign up now","form_content":"https:\/\/go.pardot.com\/l\/82202\/2017-10-12\/jw1bmb","form_tag":"low-commitment-form\/sign-up-form"},{"acf_fc_layout":"content","content":"When expanding to its South American target countries, OXXO will have to adjust its approach. For instance, the company will not be able to use \u201cmirror\u201d stores, a common technique for plotting new locations in Mexico. With the mirror technique, OXXO identifies traits associated with successful stores\u2014including demographics of local people and traffic flows. GIS then reveals locations that mirror those characteristics in other geographies. In new target markets, however, there are no existing stores to mirror.\r\n\r\nThat means the team needs other forms of location intelligence to build its confidence. GIS acts as the engine of that insight, empowering the team to map population densities, traffic patterns, the rate of local car ownership, and shifts in demographics in the new markets. GIS will also help them identify what Espinosa calls \u201cgenerators of activity\u201d such as banks, schools, and malls.\r\n\r\nWith that location intelligence, OXXO executives will find the confidence they need to make significant investments in growth.\r\n\r\n[For more on how digital transformation and location intelligence can help business executives, read this e-book<\/a>.]\r\n\r\nSpotting Potential and Driving Success<\/strong>\r\n\r\nSome companies are going beyond assessing existing conditions in markets they plan to enter. They are predicting how those conditions will change and how the company can harness\u2014even drive\u2014those changes in certain locations. Case in point: A major global brewing company is expanding from distributing its product to retailers and restaurants to operating its own brew pubs in several major cities in multiple countries. It needs local insight to gain confidence that it has the right strategy for each local market it will enter.\r\n\r\nThe brewing company is betting its brand is strong enough to go into a community that's not necessarily a hot spot and actually make it trendy in a few years. That\u2019s not bluster; it\u2019s confidence derived from location intelligence. Using GIS, the company can see the popularity of craft beers within specific neighborhoods. Its planners can examine nighttime human movement patterns, along with demographics and data from other area eateries. They can also create projections for candidate locations that reveal how the local population is expected to grow, how income and demographics will shift, and what to expect in terms of food and beverage spending.\r\n\r\nWith that data, they can sketch out the neighborhood\u2019s earning potential near term and beyond. Based on what the GIS maps tell them, company executives are realizing where they should put new stakes in the ground."},{"acf_fc_layout":"quote","image":214382,"text":"Before investing in a new market, companies must understand potential customers and whether emerging demographic trends will sustain the business long term.","author_name":"","author_profession_organization":""},{"acf_fc_layout":"content","content":"Gaining the Competitive Edge: How It Could Work<\/strong>\r\n\r\nBeyond retail and restaurants, leaders in many other industries can boost confidence in growth plans with better location intelligence. Consider the hypothetical example of a solar panel distributor. After being fed satellite images of a prospective market, an AI-powered system could use image extraction and detection to classify how many rooftops it sees, how many of those face south, and whether each rooftop works well for solar panels. GIS can plot that analysis on a map, revealing areas of low, medium and high market potential. The system could then cross-reference those findings with an analysis of demographics in that market\u2014including household income and spending habits.\r\n\r\nThat data alone would provide a helpful starting point for the solar company, but it would not have to stop there. When deciding which markets to invest in, executives could take into account other factors revealed by GIS, including, for example, the presence of young residents who tend to buy \u201cgreen\u201d products, pegging them as more environmentally minded than the general public. Another important variable: Areas where there's a high cost of energy. Mapping these different considerations might reveal a shortlist of potential sites, including those with a smaller population but higher overall potential.\r\n\r\nThe solar panel company could also compare its cost of service in different locations. This would include predicting what services, resources, and relationships with energy companies it would need to fulfill its obligation to customers. The promise is the ability to take all these variables and turn them into location intelligence. This knowledge could prove a powerful differentiator, giving the company a more reliable investment outlook as well as agility in a fast-paced environment.\r\n\r\nAs the Harvard Business Review<\/em><\/a> underscores, the era of cost-cutting has given way to recognition that growing a business is the only way to truly thrive. At the same time, companies can no longer afford to experiment with expansion plans. The days of selecting a new market based on assumptions and gut feeling are over. Advanced organizations are using GIS-powered location intelligence and AI to strengthen confidence in growth plans, analyzing a wide array of data sources to pinpoint locations that embody that elusive formula for success."}],"references":null},"yoast_head":"\nUsing Data and Location Intelligence to Spot Business Expansion Opportunities<\/title>\n<meta name=\"description\" content=\"Business executives are tapping location intelligence--including demographics and psychographics--to understand untapped markets and find future customers.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/confidence-in-new-markets\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Finding the Confidence to Grow a Business\" \/>\n<meta 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