The new solution from geospatial giant Esri Australia is already generating significant interest from major global retailers looking to strengthen their product placement and visual merchandising strategies.
Esri Australia Principal Consultant Gary Johnson said the new approach would greatly assist Australian retailers who have traditionally had to rely on trial and error to understand what makes shoppers tick.
“Understanding the geography of a store can deliver a compelling insight into the type of shopping environments that trigger the most activity – and it’s already generating millions of dollars in additional sales for many of the world’s leading retailers,” Mr Johnson said
“For example, fashion giant American Apparel mapped where their consumers shop in-store to clearly identify which areas were ‘hot spots’ and which were underperforming.
“As a result, they concentrated staff and merchandising attention on the low conversion areas – and saw sales increase by more than 30 per cent.
“For the first time, Australian retailers now have the same opportunity to intimately understand what kind of shopping scenarios their customers respond best to – so they can be more proactive in driving sales.”
Mr Johnson said understanding a store’s geography could answer questions often raised by retailers, such as how many people go past a store without entering; why some shoppers spend less than a minute in-store; or why certain aisles may be underperforming.
“GIS technology equips businesses with an in-depth understanding of the geography of a store, so they can uncover where opportunities to improve sales may exist,” Mr Johnson said
“For example, if nine out of ten consumers stop to look in a shop window but never enter, it indicates the visual merchandising tactics need to be changed.
“Or if certain pockets of a store attract little traffic, managers can alter the floor layout to make these areas more enticing.”
Mr Johnson said GIS technology could even give some retailers the solution to remaining profitable against rising staff costs.
“By understanding exactly how much traffic is coming through a store – and which areas and times experience the highest shopper demand – businesses can ensure they are deploying staff in the most efficient manner possible,” Mr Johnson said
“This is particularly important given how wage rises are affecting the sector; and will go a long way to ensure shops are appropriately staffed for peak and trough periods.”
With Christmas retail spending in Australia predicted to reach $42.1 billion this year – up 3.3% on the 2012 figure – Mr Johnson said there’s never been a more important time for retailers to know their store’s geography.
“Australian retailers are already approaching us about this technology because they can see it will provide a clear advantage in what is an incredibly tough market,” Mr Johnson said.
“The important thing to remember is instore customer mapping is just the beginning when it comes to the value a geographic approach to business can deliver.
“The real competitive edge lies in expanding geographic thinking across all facets of retail operations – from analysing customer demographics to better match products to stores; to better understanding the impact of promotions from competition around their store.”