{"id":273772,"date":"2019-10-08T05:49:09","date_gmt":"2019-10-08T12:49:09","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=273772"},"modified":"2023-12-04T12:05:03","modified_gmt":"2023-12-04T20:05:03","slug":"john-deere-market-development-with-location-intelligence","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/john-deere-market-development-with-location-intelligence","title":{"rendered":"How Data-Driven John Deere Wins the Market"},"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":[369852,369842,1001,381312,369812,365242],"tags":[97842,241,387062,281,387072],"department":[476812,476792,476822],"wherenext-category":[],"industry":[],"class_list":["post-273772","wherenext","type-wherenext","status-publish","format-standard","hentry","category-artificial-intelligence--ai","category-big-data-advanced-analytics","category-commercial","category-cxo-priorities","category-market-development","category-retail","tag-agriculture","tag-gis","tag-john-deere","tag-location-intelligence","tag-psychographics","department-business-growth","department-cxo-priorities","department-data-and-ai"],"acf":{"short_description":"Ag equipment trailblazer John Deere has turned the art of market development into a science with AI-based analysis of location data.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"As some companies pull ahead, others fall behind. It\u2019s the essence of competition\u2014and increasingly, data separates the winners from the laggards. Giants like Amazon, Facebook, and Google have propelled themselves to the frontline of the global economy thanks largely to the data they absorb and rapidly transform into operational insights, predictions, and new services and products. Today the data arms race has spread well beyond Silicon Valley into industries ranging from entertainment, where Netflix\u2019s algorithms have made it a streaming colossus, to agriculture, where John Deere has revolutionized the agriculture tech space."},{"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> Using AI-based predictive analysis, John Deere helps its dealers spot growth opportunities in markets around the world.","snippet":""},{"acf_fc_layout":"content","content":"According to a 2018 survey<\/a> of Fortune 1000 companies by NewVantage Partners, 79 percent of C-suite executives fear disruption from data-driven competitors. An overwhelming 97 percent report that their firms are now investing in big data<\/a> and AI<\/a> initiatives to become nimbler in this new business climate.\r\n\r\nSuccessful executives are searching for advantage through unique access to metrics about their markets and customers. The question they\u2019re asking: \u201cHow can we turn the information into something we can use essentially to clobber the competition?\u201d said Brian Kilcourse, managing partner at RSR Research, in a recent podcast interview<\/a>. While a similar struggle has always played out on a smaller scale, in the age of digital transformation, \u201cthe battle has been reengaged,\u201d he says.\r\n

Market Development through the Lens of Data<\/strong><\/h3>\r\nData analysis has countless applications for businesses, from optimizing supply chains<\/a>, to honing marketing messages<\/a>, to creating new product lines by bringing proprietary data to the market. But where experts see it yielding the best results is in creating a more textured, binding relationship with the customer. Companies that outperform competitors use location-based data to understand who the customer is, where they\u2019re located, and what their proximity is to the things they want or need.\r\n\r\nThat\u2019s why location intelligence has become an essential tool for market development<\/a>. With a location-centric view of data, companies like John Deere learn how customers in a given market will respond to various products and services\u2014even how much they will spend. Using an AI-powered geographic information system (GIS)<\/a>, data scientists and analysts at Deere can visualize billions of data points, finding revenue-generating patterns that a human alone could never detect. This kind of predictive view makes it easier than ever to spot unseen expansion opportunities and potential investment traps."},{"acf_fc_layout":"quote","image":273782,"text":"Deere has stayed ahead of the competition by using location data to remove the guesswork from market development.","author_name":"","author_profession_organization":""},{"acf_fc_layout":"content","content":"

John Deere in a New Age of Agriculture<\/strong><\/h3>\r\nIn the crowded market for agricultural machinery and heavy equipment, few companies command the brand awareness of John Deere, with its instantly recognizable green-and-yellow color scheme and leaping deer logo. Founded in 1837, it has distinguished itself in the twenty-first century through a commitment to smart data practices.\r\n\r\n\u201cAs our CEO recently said, we\u2019re a technology company,\u201d said Angela Bowman, a research scientist for John Deere, in a recent interview<\/a>. \u201cThat\u2019s it, first and foremost.\u201d Thanks to sophisticated machines equipped with sensors that capture data on soil, water, and temperature conditions, Deere has amassed incredibly powerful resources. Satellite imagery lets the company\u2019s decision-makers analyze land cover, sizing up how various grasslands, crop fields, or lawns correlate with consumer purchases. A map with 50 billion data points about field conditions and topography gathered from IoT-equipped machines gives the company a kind of intelligent nervous system of America\u2019s farms and lawns. That tech-savvy has caught the attention of people like Jennifer Belissent, a principal analyst at Forrester who specializes in the the data economy.\r\n\r\n\u201cJohn Deere is really illustrating that companies that use data in intelligent and strategic ways are gaining competitive advantage in a lot of different ways and in a lot of different industries,\u201d Belissent says."},{"acf_fc_layout":"form","form_type":"aside","form_position":"Right","form_title":"RECEIVE THE ESRI BRIEF","form_desc":"Stay up to date with this biweekly email featuring 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":"In fact, Forrester surveys show that 56 percent of firms are expanding their ability to source external data, and another 20 percent plan to do so in the next year.\r\n\r\nOne way Deere presses its data advantage is by using location information to assess potential markets and predict growth opportunities. In essence, the company has turned the art of market assessment into a science, forming action plans based on the location intelligence it distills from sales data, demographics, land-cover and satellite imagery, and competitive insight.\r\n

Seeing the Future of Farming and Retail<\/strong><\/h3>\r\nFarmers have always relied on some form of predictive intelligence, turning in the past to bird flight patterns, cloud formations, or the folksy divinations from the Farmers\u2019 Almanac to forecast in what can be a precarious trade. Against that backdrop, John Deere has been an innovative force since its namesake founder\u2019s pioneering work helped to invent the American steel plow. As large-scale farming has become more sophisticated and technologically advanced\u2014turning it into what is often called precision agriculture\u2014Deere has placed itself at the edge of progress. The company become something of a data sage in the process, able to help customers forecast crop yields and needed machine maintenance, while giving dealers a boost in determining which markets will perform best.\r\n\r\n\u201cAll farmers must be technologists in today\u2019s technology-driven world,\u201d Bowman says. \u201cToday in modern agriculture, it\u2019s extremely complex.\u201d\r\n\r\nTo outsiders, the success of a Deere dealership might seem like a matter of luck, a product of good or bad weather. But Deere has remained ahead of the competition by using location data to remove the guesswork from market development, supporting retail dealer investments with a foundation of objective analysis.\r\n\r\n\u201cThe work I do for market planning would be impossible without location intelligence,\u201d says Mattias Wallin<\/a>, a data scientist with the market research group at John Deere. Using GIS technology, Wallin delivers market intel to Deere\u2019s Dealer Development office, whose professionals advise dealers with data-based investment predictions.\r\n\r\nFor many of these dealers, opening another location would be one of the biggest capital expenditures of their professional lives\u2014a potentially risky bid for growth that they pursue only a couple of times in a career. With location intelligence, Deere can boost the odds of dealer success by making market assessment less about gut instinct and more of a calculated chess move that factors in all variables.\r\n\r\n\u201cThe whole point is to remove uncertainty,\u201d Wallin says. That grants dealers the confidence that they made the right decision expanding to a particular location\u2014or not. That approach has given Deere a healthy retail network, worldwide revenue of $37 billion, and the status of world\u2019s largest agricultural equipment maker.\r\n

Tools of the Data Trade<\/strong><\/h3>\r\nDuring the early stages of a market analysis, Wallin and his team might sift through thousands of variables. In the end, they typically need just 20 to accurately predict the commercial value of a potential area, usually measured in census blocks. These blocks generally include about 3,000 people and range in size from a city block in urban locations to hundreds of square miles in remote or rural regions.\r\n\r\nThe cornerstone of Wallin\u2019s work is sales data\u2014the hard numbers on what products sold where, and when they sold best. With GIS technology, Wallin can carry out an AI-powered regression analysis on a potential new market. This entails looking at other currently active markets with similar characteristics of land cover, customer sales, and demographics, and projecting potential revenue for the new area based on past performance. If the market characteristics are different\u2014lawns instead of crop fields, or higher or lower income levels\u2014the GIS-based AI model examines how those variables affected revenue in other areas, then folds that into the analysis of the potential site. These insights allow dealers to see opportunities at a granular level, gaining important insight that the competition often lacks.\r\n\r\nTo demonstrate the power of location intelligence in quantifying markets, Wallin will first apply the analysis to the dealer\u2019s current region, treating it as if it were a new market and sharing the results with the dealer\u2014often to their surprise. \u201cA dealer in the Pacific Northwest said, \u2018Wow, Mattias, your tool captured everything that I\u2019ve learned about my markets and customers for the last 30 years.\u2019\u201d\r\n

Psychographics: Insights into Customer Lifestyle<\/strong><\/h3>\r\nAs with any market analysis, demographic information is essential, but psychographic data\u2014a sophisticated view of consumer behaviors and tastes\u2014can guide precise store siting and even influence the store\u2019s product mix. This is an important advantage for a company like John Deere, whose products can range in cost from $1,600 to $600,000, leading to a widely segmented audience.\r\n\r\n\u201cI really see the value in psychographics as a way to visualize or bring some context around, who is your customer? What do they look like?\u201d Wallin says.\r\n\r\nA GIS-powered analysis of a market\u2019s psychographics might reveal, for example, that an exurban area is home to high-income, white-collar professionals with a taste for the farming lifestyle. These individuals could own a few acres of grass and be willing to spend more money on a high-end lawnmower or small utility tractor.\r\n\r\nA John Deere dealer aiming to court this customer segment might use GIS to pinpoint sites with clear traffic lanes to exurban areas and comfortable proximity to direct competitors. The data could also shape which products the dealer stocks and which it makes visible from the road. Online and direct mail marketing campaigns could be targeted at more affluent consumers in ZIP codes linked to higher-acreage homes. These are all decisions a data-driven company can make confidently, based on details likely to yield substantial gains in the long run.\r\n

Who Gets There First?<\/strong><\/h3>\r\nJohn Deere\u2019s successful use of location intelligence and psychographic information underscores the central insight of analysts like Belissent\u2014that the most effective ways to build data into a business model often center on the relationship with the customer and serving their needs. \u201cThe number one thing we\u2019re seeing in terms of driving the use of data is improving customer experience,\u201d Belissent says.\r\n\r\nCompanies that crunch data to improve operational efficiency alone tend to progress at a slower rate. Those that pull in external data\u2014whether it\u2019s weather patterns, satellite imagery, or demographic and psychographic profiles\u2014tend to better understand the markets they hope to serve, and place supply closer to demand. Developing that location intelligence quickly in a fast-paced business environment increasingly depends on savvy use of data.\r\n\r\n\u201cIf somebody is asking for insight that requires some advanced analytics capability and it\u2019s taking months or years, somebody else is going to get there first,\u201d Belissent says. \u201cThe competitor is going to get there first.\u201d\r\n\r\n \r\n\r\nTo hear more about how John Deere gains advantage through location analytics, listen to this podcast with Mattias Wallin<\/a>.\u00a0\u00a0<\/em>"}],"references":null},"yoast_head":"\nJohn Deere Uses Location Intelligence for Market Development<\/title>\n<meta name=\"description\" content=\"Using AI-based predictive analysis, John Deere helps its dealers spot growth opportunities in markets around the world.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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