The Value of Location Intelligence in Regional Demand Fulfillment

Location intelligence (LI) combines location-based data with business intelligence (BI) to uncover new business opportunities that were previously hidden. Identifying new patterns and establishing critical relationships between trends and demographics create a gold mine of opportunities for chief merchants, supply chain leaders, and strategists who are waiting to explore new avenues.

As the demand for personalization — delivering the right content, the right product, at the right time and place — gains prominence, proximity marketing and CX (customer experience) become critical strategies for increasing conversions. Similarly, retailers can use location analytics to derive sales, as consumers become more value-seeking and reserve their hard-earned money for best fits and quality services.

Using real-time, data-driven insights can help merchandisers with demand-based planning and distribution. Carrying the right level inventory at the right time and location leads to better revenue generation, increase in sales, higher inventory turns, and all this with lesser inventory holding which directly addresses the current burning issue on sustainable retailing.

Merchandising

Based on the store’s location, retailers can predict return on investment with a higher degree of accuracy using location data. Targeted merchandising reduces the risk of losing sales due to understocking or cash flow constraints due to overstocking, and helps brands stay relevant and customer centric. Smart merchandising involves location-based analysis as intelligent algorithm-driven tools allow hyperlocalized assortment planning, prediction of trends, and style volatilities. It measures precise store vs. style variation to effectively curate the right mix that resonates with local shoppers. Moving away from store clustering, perfect demand-based planning helps identify micro trends and emerging styles early so businesses can act quickly to ride the wave.

Inventory Distribution

Once retailers understand their regional customer demand, they can target inventory distribution (offline and online) based on actual requirements. Visualizing performance by layering BI onto location-based intelligence, retailers can identify “hotspots” of high demand and distribute inventory for better regional utilization. Intelligent demand-based inventory distribution reduces logistics costs significantly as the inventory is split across a network of managed warehouses. It facilitates faster local order fulfillment, greater visibility, higher conversion on marketplaces, a boost in customer loyalty, and eventually higher profits. Thus, LI helps in future planning and crafting effective, efficient sales and stock distribution strategies.

Inventory Optimization Through Smart Inter-Store Transfers

Redistributing inventory helps in optimizing sales of existing stock by increasing availability. LI can enable omnichannel retailers to expose 100 percent inventory in real time across all sales channels so local demand, online or offline, can be immediately fulfilled from local stores. This ensures loss in sales due to incorrect inventory placement can be prevented and stores are optimally stocked at all times.

Logistics Optimization

As supply chains become more value-driven, retailers need to up their game by streamlining stores, distribution centers and logistics partners. LI can enrich reports and help supply chain managers find efficient routing options that add value to the operation. Location tracking apps can track the precise location of a delivery executive in real time, and calculate the exact ETA for customers. By pairing LI with inventory management software, supply chain managers can calculate inventory accuracy, analyze the movement of stock and detect bottlenecks responsible for delays, helping to make service and processes more efficient.

Inventory Tracking

Retail requires the management of a large volume of products to meet ever-increasing customer demand. Brands across offline and online channels use GPS, RFID technology, and barcoding to track each piece of inventory through the entire delivery process. QR codes on products give shoppers the flexibility to access more information on the product, which reduces the need for extra labor in printing product cards and tagging. Customers can avoid queues and self-checkout using QR codes. Geofencing technology in apps can highlight the location of items within a store, driving a more focused shopping experience that's exclusive and memorable.

Retail Store Location Analysis

As retail is a low-margin sector, companies need to be cognizant of investment scenarios. LI helps make spatially aware decisions that consider local factors such as consumer demographics, existing/emerging behavioral patterns, and local competition. It helps in statistical decision making, offering the power to look where and how people shop. Customer journey maps, correlated with real-time data, allow retailers to effortlessly understand evolving customer choices. Geospatial data can improve sales by finding unique opportunities to elevate the consumer experience.

Location-based data is at the heart of retailing. As brands strategize to recover from the impact of the COVID-19 crisis, it's important to be one step ahead and closer to customers. The degree to which this crisis has impacted any location differs greatly by geography. Businesses need to be agile and flexible to quickly adapt to new ways of serving consumers differently in each location. Location intelligence can help get insights on merchandising such as what styles to offer, how much to buy, and how to distribute; and on logistics, such as which customers want home delivery, buy online, pick up in-store (BOPIS), or entirely different logistics solutions. The future is data and tech driven. Location Intelligence, paired with BI, can help brands reach the true pulse of consumers.

Anshuman Agarwal is the co-founder of INCREFF, a business partner to fashion and lifestyle brands and retailers.