How a Big-Box Retailer Gained an Additional Revenue of 25% Using Location Analytics

Mar 20, 2019

The client is a well-known big-box retailer based out of the Netherlands. With over 150 stores located across the globe, the retailer is well-known for a wide range of product offerings ranging from hardware, home décor, and other DIY kits. As a leading DIY brand, the client’s key aim was to meet the growing needs of both experienced and new DIY enthusiasts by offering the best choice of products and prices.

Business Challenge

Rapid technological developments have given rise to noticeable transformations that have dramatically changed the retail landscape. Owing to the strong competition from online retailers the traditional retailers have started to shift focus and accommodate change as a crucial aspect of their business process. As a result, brick-and-mortar stores have started adopting omnichannel marketing approaches to orchestrate with the analytical and highly targeted approaches used by online retailers.

Today, location analytics is increasingly being adopted by retailers who are looking at gaining a front-line retail advantage. Wondering how location analytics can benefit your retail business? Let us walk you through the nitty-gritty of location analytics in retail through this detailed case study.

The obstacles associated with the implementation of location analytics is one of the major reasons that is hindering the extensive adoption in the retail sector. In addition, the computational power required to analyze real-time data sources is another major factor that has prevented the industry-wide adoption of location analytics solutions.

Location analytics is indeed the silver bullet for retailers looking at cutting through the complexity to gain a leading edge. Request a Demo to know more.

Recently, a leading big-box retailer in the Netherlands introduced a small-store format, which aimed at offering a limited selection of SKUs in a more accessible and convenient way. The aim was to give rise to smaller local stores that would still leverage the buying power, logistics, and management from the parent store. The retailer’s main intention in setting up such smaller stores was to target the urban shoppers by offering convenient approaches for purchasing items and to also build brand loyalty for the larger format stores. Owing to the disappointing early results, the client approached Quantzig, a retail location analytics expert to evaluate performance and recommend changes. 

Top Challenges Faced by the Retailer

Problem Statement 1

The client’s aggressive expansion plans brought in several predicaments in assessing the business potential for existing and potential stores and to set an internal business target.

Problem Statement 2

In spite of their online success, the client was flying blind when it came to understanding their customers and their perceptions in real-time.

Problem Statement 3

Lack of insights from location data prevented the client from identifying untapped opportunities and left blind spots when it came to the implementation of new merchandise, services, and engagement experiences.

Solution Offered and Value Delivered

The client realized that they had to go beyond just analyzing the POS transaction level data. As the client was just getting used to the new store format, it was essential to gauge how the new approach was impacting sales. This would, in turn, help them to identify and quantify potential store redesigns.  After exploring all the different possibilities, the client approached Quantzig to learn more about the benefits of location analytics in retail. The retailer was keen on leveraging retail location analytics as it seemed to offer superior accuracy and scalability and was also easier to integrate into the existing database.

Phase 1

The initial phase of this location analytics engagement revolved around analyzing customer behavior. This offered baseline insights into product location, its performance, and related customer behaviors.

Phase 2

After analyzing the initial metrics, the client realized that they needed more data and in-depth insights to bring about major changes. As such, the client focused on the development of in-store heat maps that would help them to tracks customer’s traffic patterns to gain a better understanding of their requirements.

Phase 3

The third phase of this location analytics engagement revolved around integrating the client’s transactional data sets with the gathered location data.

By mapping the customer’s location data with transactional information, the client not only gained additional revenue of about 25% from the DIY category but was also able to gauge what portion of the revenue was driven by improved conversion rates, traffic, and average transaction values.

Location analytics is the new non-negotiable in the retail sector. Request free proposal for detailed insights.

Importance of Retail Location Analytics

Today, location analytics is an integral part of any strategic retail expansion plan for all good reasons. Retailers have begun realizing the importance of location-based services that help integrate geographic location data to business data. Maps and spatial analytics have been proven to offer a whole new context that is simply not possible with charts and tables. While this geographic aspect is generally absent from business analytics solutions, many organizations would like to incorporate it into their business operations. Also, by helping you map customer behaviors, demographics, and competitor locations, location analytics can offer a better idea of whether you will succeed in the new business segment.

Why Quantzig?

Location analytics turns out to be the need of the hour in today’s’ complex business scenario. Though retail industry players have been adopting new ways to implement location-based services for enhancing customer engagement and the overall business outcome. Not many have been successful in adopting a new process that leverages analytics and location-based data. We at Quantzig can help you make the best possible use of location analytics in your retail business.

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