Location Intelligence in Retail: Optimizing Store Networks


The retail industry in the United States is continuously evolving, driven by technological advancements, and changing consumer behaviors. Statista predicts that the total retail sales in the United States will reach $5.94 trillion in 2024, up from roughly $5.47 trillion in 2019.   

To stay competitive in this dynamic landscape, retailers are leveraging data analytics and innovative solutions to gain a deeper understanding of their customers and optimize their operations. One such powerful tool is retail analytics services, which empowers retailers to make data-driven decisions regarding store networks and footfall analysis. Having explored the trends shaping the retail industry, and location intelligence’s inception in one of our blogs, let us get a birds’ eye view of retail analytics in retail and discover unlocking its potential for optimizing store networks and footfall analysis. 

Trends in the Retail Industry: 

The retail industry has recently witnessed the proliferation of mobile devices, the rise of e-commerce, personalized customer experiences, and the integration of online and offline channels. Consumers expect a seamless omnichannel shopping experience across multiple touchpoints as they become increasingly connected. To thrive in this landscape, retailers must pivot their strategies to embrace the preferred channels and modify their outreach and marketing strategy to a customer-first approach. A survey by Salesforce revealed that 76% of consumers expected companies to understand their needs and expectations, emphasizing the importance of personalized customer experiences.  

The Inception of Location Intelligence in Retail: 

Location intelligence refers to analyzing geospatial data to derive meaningful insights and make informed decisions. It combines traditional business intelligence with geographic information systems (GIS) and spatial analytics. Advancements in technology, such as GPS, and mobile devices, and the availability of vast amounts of location-based data have fuelled the powers of regular retail analytics services. More than 90% of businesses consider location data to be essential to their success. From 2019 to 2027, the global location of the intell Calibri (Body) Agence market is anticipated to expand at a compound annual growth rate of 15.2%, reaching USD 32.8 billion. This demonstrates the impact of place! And why is it the case? By leveraging this data, retailers can better understand customer behavior, preferences, and the impact of physical store locations. We will delve into these in a little while…  

Role of Data Analytics in Location Intelligence:  

Data analytics is pivotal in unlocking the potential of location intelligence in retail. By leveraging data from various sources, including transaction records, loyalty programs, and external datasets, retailers can identify patterns, trends, and correlations related to customer behavior and store footfall, optimize store networks, and personalize marketing efforts. 

Benefits of Location Intelligence in Retail: 

Polestar Solutions, with its team of Consultants and industry experts – with expertise in the Retail Industry provide actionable insights using Location Intelligence to implement the following services: 

Store Network Optimization:

Polestar makes use of Location intelligence data to enable retailers to identify the optimal locations for new stores. Retailers can make decisions that maximize footfall and sales potential by analyzing demographic data, competitor store locations, and consumer behavior. 

For example, Best Buy, a major electronics retailer, optimized its store network by leveraging location intelligence. Through data analysis, Best Buy identified underperforming stores and strategically closed or relocated them to areas with higher customer demand, resulting in improved profitability. (Source: ESRI) .

Footfall Analysis:

Understanding customer footfall patterns is crucial for retailers to optimize store layouts, staffing levels, and promotional activities. Polestar’s expertise in Retail Analytics services provides insights into peak hours, traffic flows, and customer segmentation, allowing retailers to allocate resources effectively and enhance the customer experience. 

Macy’s, a renowned department store, utilizes location intelligence in retail for analyzing foot traffic patterns and customer segmentation. They have also optimized their staffing levels and store layouts, ensuring a seamless shopping experience for customers and maximizing sales opportunities. 

Targeted Marketing: Polestar Solutions has a proven expertise in Monitoring Marketing campaigns for clients in Retail and Location intelligence helps retailers precisely target their marketing efforts. By combining customer data with location information, retailers can deliver personalized promotions, offers, and recommendations based on individual preferences and proximity to their stores. 

McDonald’s targets its marketing efforts and leverages location intelligence. They deliver location-specific promotions and offers by analyzing customer data and location information to drive footfall and increase customer loyalty. (Source: ESRI) 

 Optimal Store Layout and Visual Merchandising:  

Polestar’s expertise in data analysis can help monitor foot traffic patterns within a store; retailers can optimize the layout and arrangement of products. Location intelligence helps identify popular areas, high-traffic zones, and customer flow within the store. This information can be used to strategically position products, improve store navigation, and enhance the overall shopping experience. 

  • Retailers that optimize their store layouts based on foot traffic analysis have witnessed a 10-15% increase in sales, according to a study by Storetraffic. 
  • IKEA, the multinational furniture retailer, uses location intelligence to understand store customer flow. This helps them design store layouts and plan product placements to enhance customer experience and encourage exploration. 

Competitive Advantage:

Polestar helps Retailers gain a competitive edge in the market. By making data-driven decisions, they can optimize their operations, improve customer satisfaction, and stay ahead of their competitors. 

Best Buy, a leading electronics retailer, uses location intelligence to evaluate competitor store locations and adjust their pricing strategies accordingly. By understanding the competitive landscape, they can optimize their pricing to attract customers while remaining competitive. 

Wrapping up: 

The benefits of Re extend beyond store optimization, enabling targeted marketing and providing a competitive advantage. Retail players that are focused on selectively modernizing technology can transform both the customer experience and their operational performance when they approach it with a “why first” mindset. For example, a leading offline player in the Eye-Care industry in US leveraged Data Analytics to transform their Sales reporting experience – compiling reports in 5 seconds instead of 8 hours!!.  

Are you ready to empower your retail business with our industry-proven techniques and automation solutions?Speak to our Industry leaders in the Retail sector at Polestar Solutionsto identify the optimal inventory levels, maximize revenue and scale your retail business game.