Data-driven insights from location intelligence are a surprising tool helping retailers swim in an economy that is treading water
The game is changing for retailers that rely on brick-and-mortar commercial real estate to conduct business. Long gone are the days when customers relied solely on local retailers. Since that era, the industry has seen the rise of big-box retailers, followed by the adoption and surge in e-commerce activity, which has redefined the way consumers shop.
While online shopping is the new norm after gaining even more popularity during the COVID-19 pandemic, it doesn’t mean that physical retail spaces are dead. In fact, data shows that shopping in person remains relevant to consumers. In 2021, U.S. Department of Commerce Retail Indicator Division data revealed that brick-and-mortar stores grew faster than e-commerce websites for the first time ever.
However, it is worth noting that e-commerce is a reality that is here to stay. The National Bureau of Economic Research said, “Online sales grew from 0.63% of total retail sales in 1999 to 13.3% in 2021.” So why is it that online retail has been so successful?
Meet Customers Where They Are
Personalization and the shift to what is known as the “age of personal commerce” is a major selling point for consumers, and it has proven difficult to replicate offline due to the difficulties in obtaining the same levels of data measurement and analytics that are available digitally. But as more investment pours into real estate tech, the gap between shoppers’ buying habits online and in stores has been closing. Traditional retailers need to have the right data to find the right prospects and personalize the customer experience to stay relevant.
For brick-and-mortar retailers, the key to boosting return on investment from marketing is accurately tying a customer’s digital footprint to a store’s footprint. From neighborhood demographics and commute times to income levels and housing values, location intelligence-based data concerning the physical environment of potential customers provides insight into their lifestyles and how they shop. The physical location of a store factors heavily into the customer profile, the times of day that they typically shop and what they buy.
Retail Reimagined Through Location-Intelligence Property Data
Understanding customer demographics at a particular location, actual foot traffic and the compounding effect of co-tenants are all considerations when finding new site locations, deselecting locations or identifying alternative uses for current properties within a portfolio. This information can also help traditional retailers identify shopper habits that enable them to plan for:
- Last-mile delivery services
- Omnichannel efficiencies, such as providing online shoppers with information about the availability of products in local brick-and-mortar stores
- Where to place merchandise based on how certain demographics shop for products
And with the increased migration patterns brought about by COVID-19, it can be more difficult to predict the right retail store location. Many Americans have migrated to different parts of the country to either reduce the cost of living or because they can now work remotely. New York and Los Angeles witnessed some of the highest out-migration among major metros during the pandemic, as people sought more space and access to outdoor recreation. However, for first-time homebuyers and millennials, high-tech coastal metros are regaining their appeal.
Data Lowers Retailer Risks
As Americans continue to move, it is important for retailers to keep tabs on their audience’s location and lifestyle using location intelligence. This information can make the difference between reactively responding to economic tailwinds and actively laying the groundwork to grow with your consumers.
Traditional retailers that wish to remain competitive need to have more than just customer data to keep up with their e-commerce competitors. Understanding current real estate and lifestyle trends helps brick-and-mortar retailers find the right prospects and build bespoke shopping experiences, which is key to accelerating business and gaining loyal customers.