{"id":764362,"date":"2025-07-08T05:10:44","date_gmt":"2025-07-08T12:10:44","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=764362"},"modified":"2025-07-09T07:00:13","modified_gmt":"2025-07-09T14:00:13","slug":"demand-signals-and-profitability","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/demand-signals-and-profitability","title":{"rendered":"Reading Demand Signals in the Geographic Tea Leaves"},"author":501,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","castos_file_data":"","podmotor_file_id":"","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":[],"tags":[471991,492932,238001],"department":[476812,476792],"wherenext-category":[],"industry":[],"class_list":["post-764362","wherenext","type-wherenext","status-publish","format-standard","hentry","tag-market-analysis","tag-revenue-optimization","tag-site-selection","department-business-growth","department-cxo-priorities"],"acf":{"short_description":"Expanding a business is a major investment accompanied by significant risks. Savvy executives are looking at demand signals in a new way.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"

Snapshot<\/strong>: An airline\u2019s meticulous search for new routes underscores the reality for all industries: It\u2019s not enough to understand where demand exists. Execs must know where demand is strong enough for a profitable expansion.<\/p>","snippet":""},{"acf_fc_layout":"content","content":"

World travelers love the possibilities inherent in exploring new destinations. The airlines that take them there prefer a degree of certainty; new routes must turn a profit. And yet, airline planners can\u2019t afford to idle on the runway waiting for a sure bet. As they look for a balance between first-mover status and profitability, they do what other modern businesses do: consult the data.<\/p>\r\n

In a recent Wall Street Journal<\/em> interview<\/a>, a United Airlines executive explained how his team combines hard data analysis and social media buzz to discover the latest hot routes for savvy travelers.<\/p>\r\n

Recently, United fast-tracked service to Bangkok to capture demand stoked by the latest season of the Netflix series White Lotus<\/em>. The executive told the WSJ<\/em> that Thailand was already on their radar\u2014they were primed to flip the switch with staff and aircraft when demand reached critical mass.<\/p>\r\n

When deciding where to expand, United looks for clues in the geographic patterns of booking records and consumer purchases, the WSJ article revealed. Credit card data shows where travelers are spending at overseas hotels and restaurants. Government data, like USDOT origin and destination records, back up hunches with concrete numbers and demographics.<\/p>\r\n

Mindful of the delicate balance between demand signals and profitable expansion, the United executive said new international routes have a short leash. The team knows after about a year whether they will pan out.<\/p>\r\n

For any business executive, knowing where demand is too low to support a profitable expansion is just as important as knowing where the next hot spot is.<\/p>\r\n\r\n

Mapping Expansion in Other Industries<\/strong><\/h3>\r\n

Airlines expand like firms in other industries\u2014by understanding where their best customers are, where others like them live, and by assessing whether it\u2019s profitable to reach them. Many prominent businesses map demand signals with geographic information system (GIS) technology.<\/p>"},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"

Related Read:<\/strong><\/p>\r\n

\/\/ Spotting the best markets<\/a><\/p>","snippet":""},{"acf_fc_layout":"content","content":"

In one case, location-specific demand signals helped a major brewing company analyze neighborhoods<\/a> for a new chain of branded brewpubs. Analysts investigated several cities in multiple countries, placing demographic information on maps to show executives where craft beer was already popular. They refined the analysis to areas where the retail mix and nighttime movement patterns indicated high potential for walk-in traffic from neighboring establishments.<\/p>\r\n

In another case, a light bulb came on for executives at one of the world\u2019s largest sports retailers when GIS analysts plotted demand signals on a map<\/a>. A halo of strong online sales performance circled many of the company\u2019s physical store locations, revealing a synergistic relationship between in-store and online customer behavior. The halo effect, according to retail analysts<\/a>, can add as much as 20 to 30 percent to a physical store\u2019s sales.<\/p>\r\n\r\n

Demand Signals and Profitability\u2014An Assessment for Geospatial AI <\/strong><\/h3>\r\n

As companies search for the sweet spot between demand and profitability, GIS can illuminate the halo effect on expansion scenarios. Halo forecasting<\/a> blends location data, transaction history, consumer profiles, and geospatial AI to predict in-store and online sales, helping executives plan profitable business locations in markets around the world.<\/p>\r\n

Geospatial AI is helping agriculture equipment dealers predict local demand<\/a> at a continental scale. With GIS-powered regression models, executives identify markets with traits similar to successful operations. That includes a market\u2019s psychographic makeup<\/a>\u2014consumer habits that often make the difference between a profitable location and an unprofitable one.<\/p>\r\n

Whether companies are selling tractors, craft beer, baseball gloves, or transatlantic flights, expansion follows a formula. The key is to predict demand\u2014and determine whether it\u2019s enough to turn a profit. Industry innovators map data with GIS technology to read the demand signals and expand with more certainty.<\/p>\r\n "}],"references":null},"yoast_head":"\nDemand Signals and the Quest for Profitable Expansion<\/title>\n<meta name=\"description\" content=\"Eager to analyze demand signals and optimize revenue, top companies are using location tech to find profitable answers in the data.\" \/>\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\/demand-signals-and-profitability\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Reading Demand Signals in the Geographic Tea Leaves\" \/>\n<meta property=\"og:description\" content=\"Eager to analyze demand signals and optimize revenue, top companies are using location tech to find 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