Approximately 80% of Americans shop on the internet today, which is an increase from the 46% who reported doing so in 2000. Based on that spike and gloomy headlines about brick-and-mortar, it’s easy to believe that physical retail locations are becoming completely obsolete. However, certain facts contradict that.
42% of large retailers expanded their number of brick and mortar stores, while just 15% experienced a net decrease. The retail sector is increasing in profitability quarter over quarter.
Retail success seems, in the era of unified commerce, to be connected to integrated online and in-store experiences. The key to delivering the desired in-person experience seems to be understanding buyer personalities.
The right mix of services, products and experiences seem key when retailers want to outperform their peers.
Customer Analytics- A Key to Personalization
Retailers are using data such as location intelligence enriched with spatial analytics to identify customer segments and gain greater insight off of which to make decisions. This info might include buying power, education level and professional status.
Retailers are discovering that certain customer segments seem to work, play and live in similar areas. They can target the most profitable segments in order to make their process efficient.
For example, a retailer offering beauty products outperformed its competitors by getting a better understanding of its highest performing customer segments through location intelligence. That meant catering in-store salons and hands-on product testing as well as complimentary products and resources. The retailer learned, through data, that there was a big upside to becoming a “beauty destination,” in its location.
The Spatial Advantages of Retail
Despite a world in which customers can order anything from anywhere online, retailers can optimize physical locations based on detailed data for factors such as:
- specific market activity
- spikes in buying
- competitor activities
Retailers can discern profitable customer segments, identify which offerings play best hands on (dining has been reported as a natural fit for the in-person experience) and customize their locations to that in the future.