Unlocking the future of retail with geospatial data

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The Marketing All Product Survey (MAPS) provides detailed insights into South African consumer behaviour, covering everything from product usage and brand loyalty to media habits.

This data is essential for retailers, offering them a precise understanding of target demographics and helping to shape marketing strategies that resonate with specific consumer segments.

It guides decisions around product offerings, pricing, and market positioning.

MAPS can assist in optimising store locations and distribution channels by indicating where target consumers are most concentrated. The impact of MAPS on South Africa's retail market is significant, ultimately enabling a more personalised shopping experience that builds customer loyalty and satisfaction.

Retailers can leverage this data to respond quickly to changing trends, minimising risks like stock shortages or overstocking and adapting to consumer needs across regions.

MAPS also fosters data-driven innovation, encouraging retailers to develop new products and strategies that align with consumer expectations.

As more businesses adopt MAPS data for decision-making, South Africa’s retail market will benefit from improved alignment with consumer demand and a stronger competitive edge.

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More corporations in South Africa across the different retail sectors should be investing in MAPS than is presently the case.

Over the last four years, GeoScope has been intricately involved in developing MAPS in collaboration with the Market Research Foundation (MRF).

Its involvement includes contributing the sampling frame, assisting with maps for fieldwork implementation by Plus94, and conducting fieldwork quality assessments over the last four years.

GeoScope has developed a spatial version of MAPS called GeoMAPS that maps any variable from the data set at a granular level for the whole of South Africa.

GeoScope's experience in engaging in the marketplace suggests that many more corporations should be subscribing to MAPS and those who are already members should be investing in GeoMAPS.

The question that then arises is - why is this not the case?

The use of data in general and geospatial data more specifically, faces several barriers to mainstream adoption in decision-making by companies, despite their potential to add significant value.

Limited awareness and understanding: Many people responsible for decision-making within companies lack an understanding of consumer and geospatial data’s capabilities and are not fully aware of its potential impact.

For example, understanding the “neighbourhood effect” that geographic proximity and spatial relationships of surrounding neighbourhoods can affect the socio-economic characteristics and consumer behaviour of a specific location.

For instance, shopping centres in high-income neighbourhoods will attract a different customer base than malls in lower-income areas, even if they are closer.

By understanding the neighbourhood effect using geospatial data, organisations can better interpret patterns and trends, leading to more accurate decisions and targeted strategies.

To overcome this lack of an understanding of consumer and geospatial data’s capabilities requires approaches to increase awareness among decision-makers within companies.

This can be done by hosting webinars, holding training sessions and publishing case studies that illustrate the impact that consumer data and geospatial solutions can have on an organization’s strategic development.

Over the years GeoScope has presented several webinars and case studies that show the success of using consumer data with geospatial solutions including:

• GeoMAPS - geospatial consumer data for strategic decision-making in SA's retail sector
  
• Retail network optimisation: a more sustainable method to retail network devel-opment in South Africa
  
• Case studies of using consumer data in retail network optimization

Perceived high costs of implementation: The perceived technical nature of GIS and spatial analytics makes it seem specialised and complex, where in reality it can be an easy-to-use and an accessible decision-making tool.

There is also a historical misconception that geospatial solutions require substantial upfront investments in software, hardware, and skilled personnel with the added fear that this will result in underutilisation.

The availability of open-source geospatial tools and cloud-based platforms has significantly reduced costs, revolutionised access to geospatial solutions and is consequently, more accessible to a broader audience of users.

Many organisations may also not see a clear cost-benefit return or are unwilling to commit resources as executives might not see the immediate relevance to their priorities. This is until market changes begin to directly impact their bottom line or operational efficiency.

Data silos and fragmentation: It is not only geospatial data, but any form of data that often exists in silos within a company, because different teams collect data for their own specific purposes.

This fragmented approach can lead to inconsistency and redundancy, making it challenging to integrate geospatial solutions into broader business processes effectively. The integration of geospatial solutions in a company can act as a facilitating agent and ensure cross-departmental collaboration.

More needs to be done within companies to manage their corporate data, share data resources and implement centralized web-based data platforms where all departments can access relevant data.

Lack of integration with existing systems: Organisations have legacy processes and systems that were not designed with geospatial data in mind, such as point of sale (POS) and accounting systems.

Integrating geospatial solutions with these legacy systems often requires extensive customisation or entirely new infrastructures, which can seem prohibitively complex and costly.

More recently, new technological developments have enabled geospatial data and software to be effectively integrated into legacy systems through the use of API technologies.

One can begin by integrating geospatial data into core business functions in relation to these legacy systems that will show the highest return on investment for the business.

Skills gap and resource constraints: There is a perception that there is a shortage of experienced professionals with geospatial and industry-specific expertise who can translate business data into actionable insights using geospatial solutions.

The reality is that all professionals recruited by organisations need to start somewhere and through in-service training, develop the required skills for the job.

Businesses should recruit professionals with data science and GIS expertise to enable them to address business needs through statistical and geospatial analysis.

There is also the option of upskilling existing staff through targeted training programmes by partnering with education institutions or using online learning platforms.

Perceived complexity of geospatial analytics: There is the belief that the technical complexity of using geospatial data and analysis is only for specialists.

With the assimilation of technologies such as navigational GPS on mobile phones and Google Maps into everyday life there is a greater understanding of geospatial visualisation and analysis amongst the general population. The use of web-based visualisation and dashboards has simplified the complexities of using geospatial data.

It has made it simpler and more intuitive for decision-makers to view their business's KPI’s through web-based geospatial dashboards. These easy-to-use web-based and customisable dashboards make geospatial insights more accessible to decision-makers.

Quantifying the ROI in using geospatial solutions in business: Demonstrating the direct financial benefit of geospatial data in a business can be challenging.

Many organisations are unable to quantify how spatial insights influence revenue, cost savings, or customer satisfaction, resulting in limited executive buy-in. There are many international case studies of how geospatial solutions adopted by retail businesses have optimised operations, enhanced customer experience and driven revenue growth.

Rona is a Canadian hardware retailer saved thousands of dollars in rationalising the distributing of marketing materials to underperforming areas and improving their targeted marketing efforts by better aligning promotions with customer demographics.

Walmart analysed customer vehicles in store parking lots using geospatial solutions and correlated this with store sales, to improve inventory, staffing and revenue forecasting.

In South Africa, research has shown that a 30% improvement in the performance of new stores can potentially be achieved when integrating geospatial solutions into site selection rather than relying on traditional methods.

Research conducted internationally in the usage of spatial data within businesses shows that there is generally a cost-benefit ratio of 18:1, which means that for every R1 invested in geospatial data there is an 18 times increase in the benefit to the company.

When companies decide to implement geospatial solutions, they should focus on clear and measurable initiatives like optimising logistics, reducing travel costs or enhancing customer targeting.

Achieving success with these initiatives can be used to calculate the ROI and showcase the benefit to the business.

It is not only the more sophisticated initiatives that companies should focus on but also using geospatial visualisation to simply understand the distribution of their market, where their stores and those of their competitors are located and monitor the KPIs of the retail network.

For example, visualising a map of retail stores and mapping their monthly revenue can quickly show those which are underperforming and those which are reaching their revenue targets.

Organisational culture and resistance to change: Many companies have traditional organisational structures, business processes and decision-making strategies that may make them resistant to change.

A recommended approach to changing this culture is to identify a champion that will lead the process in advocating the use of geospatial solutions. Small pilot projects forming part of focused initiatives presented to the organization through workshops can demonstrate its value and be used to shift the culture towards more data driven decision making resulting in executive buy-in.

Data quality and accuracy issues: A key focus of any geospatial initiative in a company is to define the data standards in terms of its granularity, accuracy and recency.

This requires companies to develop internal approaches, working with reliable data providers and automating data updates to achieve the required data standards. This will ensure that company decision makers remain confident in the reliability of the data being used in its critical decision making processes.

Taking retail into the future: unlocking consumer insights with geospatial data

The strategic use of geospatial data can transform business practices by enabling a more precise understanding of consumer behaviour, optimising resource allocation, and fostering responsive decision-making.

MAPS, with its granular insights into South African consumer behaviour, allows companies to not only adapt to changing market conditions but also to innovate in ways that enhance customer satisfaction and loyalty.

GeoScope’s development of GeoMAPS further augments this potential by providing detailed spatial data and analysis that informs where resources should be concentrated, thus aligning with consumer needs and preferences across different regions.

For South Africa’s businesses to fully harness the power of geospatial solutions, several challenges must be addressed, including limited awareness, perceived high costs, data silos, and integration difficulties with existing systems.

GeoScope’s ongoing efforts to educate decision-makers through webinars, case studies, and showcasing the practical benefits of geospatial data, as well as lowering implementation costs with cloud-based solutions, are vital steps toward overcoming these barriers.

As more businesses invest in MAPS and GeoMAPS, South Africa’s retail market stands to benefit from enhanced operational efficiency, improved customer targeting, and a stronger competitive edge in a dynamic marketplace.