Have you ever run a Google map from your location to the nearest Starbucks, and listed the driving directions? Well you just ran some location intelligence. Location Intelligence is the visualization of relationships between facts and data points about a specific location or set of locations in order to identify opportunities take action and measure the results of those actions. When you see 1,000 store locations and the specific data such as Out of Stocks (OOS), existence of a merchandising rack, or Point of Sale (POS) sales data in a spreadsheet it is difficult for the normal person to perceive gaps, regional trends, and opportunities/threats. That is where Location Intelligence comes in; when you can see those same 1,000 store locations on a map, the regional trends, relationships between OOS and POS sales, and opportunities/threats become obvious.
The power of location intelligence has come to category management by leveraging location information your company is already collecting to learn the why behind the what. When you can see threats and opportunities before your competitor sees them, you can act before they react. You can quickly see which stores are underperforming or over performing and see the underlying influences in a manner that would be nearly impossible in a spreadsheet.
Figure #1 Sales Data in Spreadsheets
Figure #2 Performance by Store Location
The human eye can see visual patterns 65,000 times faster on a picture, like a map, than in a tabular form such as a spreadsheet. The data in Figure #1 is difficult to interpret. The map displayed in Figure #2, visually represents the data on the spread sheets, so that the relationships become apparent. Here, the red stores are underperformers, the yellow stores are average performers, and the green stores are high performers. The high performing stores can be easily and quickly viewed in relationship to their location and the associated demographics. While location intelligence provides excellent data visualization capabilities; there is so much more that can be applied to category management.
Location intelligence allows users to see all the data points mapped to a particular address, like a store location, trading area, or region, in graphic representations such as pie charts, bubble charts, and bar charts; all displayed on a map. By using mapping representations, the user can perform all types of category management analyses, such as distribution analysis, out of stock analysis, regional differences in POS sales, and cluster analyses of stores that meet certain criteria within the data. A multi-layer mapping tool, allows the user to link together map layers to produce a consumer segmentation analysis that would be difficult in an Excel spreadsheet.
An example would be a store trading area layer linked to a block group layer containing demographics to develop store trading area demographic profiles. In Figure #3, a store trading area was developed for each of the stores in the mapping tool (i.e. a 2 mile radius around the address). Then the underlying layer, containing consumer demographics was connected with the trading area layer to produce a demographic profile for each store. The process of assigning store demographic profiles can be quickly and easily accomplished for thousands of stores; thus allowing a user to identify and target stores that meet a certain demographic profile. For example, a user might want to identify all stores that have a high index of families with two or more children under the age of 18. Stores matching that profile will be highlighted on the map and easily recognized, identified, and targeted for promotional execution. In this example, we will look at the racial profiles in each trading area.
Figure #3 Demographics by Store Location
In Figure #2, we saw that the stores in south side of Chicago were high performing stores for our product. In Figure #3, we are looking at demographic profiles for each store. Compared to other parts of Chicago, these stores have a higher incidence of African American consumers in their trading area. This gives insight into who's buying our product without extensive consumer research. This information is not easily visualized from a spreadsheet. This is the power of WHERE!
Location intelligence is not a difficult discipline to bring into your organization, but certain elements need to be in place to be successful in you implementation. A successful location intelligence implementation will require:
- Tools – Select the right tool(s) to facilitate the power of location intelligence within your organization.
- Data – Identify, organize, source, and structure geographic data sets within your organization.
- Data Visualization – Craft the best mapping tools and analytics to reveal the most about your data.
- Human Resources – Identify and train the right people with analytic skills to advance and evangelize the organization for location intelligence.
Insight, Information & Consulting Services, Inc. can help your organization craft a location intelligence strategy, identify data sources, organize your data, and develop hard-hitting, information packed data visualization mapping tools. There are many GIS, location intelligence tools on the market, and they run the gamut from basic to extremely complex. A basic tool such as Map Point by Microsoft, is a good starter tool for visualizing location intelligence data, but it lacks multilayer mapping and important location intelligence analytics tools found in the AWhere CPG location intelligence software. There are many professional GIS tools that require individuals with highly skilled GIS training to operate. The GIS tool I am using for examples in this article, come from AWhere CPG, from the AWhere Company, which delivers multilayer mapping capabilities, sophisticated geo-demographic analytics tools, and it has been designed and optimized to facilitate category management within the CPG industry. For more information on Location Intelligence or to sign up for our webinar on Location Intelligence, coming up on October 1st, 2009, please email us at www.insightinformation.net.