Understanding foot traffic analytics is pivotal for businesses aiming to optimize their physical locations and make data-driven decisions. This guide dives into how foot traffic analytics can revolutionize your business strategy, providing in-depth insights into customer behavior and location analysis.
Harnessing Foot Traffic Analytics for Strategic Business Decisions
Foot traffic analytics offer unique, versatile, and comprehensive insights into the data that influence today's critical business decisions. By monitoring foot traffic, organizations gain insight into consumer mobility patterns, which are crucial in selecting or deselecting their next retail or business location.
Today’s foot traffic analysis employs a variety of methods to understand the value of a physical location. Ground truth data is a key term that refers to any information that is ascertained by direct observation, as opposed to inference. The ground truth of a business site, for example, is measured as a target variable and harnessed as trusted information to investigate how valid and accurate other data sources are.
The Story Told by Foot Traffic Analytics
Foot traffic analytics tell the story of where and how people choose to spend their time. By combining this information with real estate data and other sources, businesses can forecast the future viability of a proposed location or evaluate the current success of a brick-and-mortar business.
Comparing ground truth information with other foot traffic data can tell the complete story of the business in question. Store performance metrics can be utilized to understand your target audience and its spending patterns in an area that can influence layout, inventory, and marketing. Is a specific product resonating with your audience? Are individuals within your target demographic visiting your location – and if so, at what times of the day?
Customer visit patterns can be analyzed over a specific period of time to understand how your target audience interacts with a location on a daily, weekly or monthly basis.
You can also gain insight into how one particular location is performing compared to other businesses within your organization, or compared to your competitors.
Combined or harnessed individually, foot traffic analytics can measure the success or gauge the future opportunity of a business over a targeted period of time. These numbers can drive decisions regarding inventory planning and staffing, as well as future growth opportunities.
Does your retail traffic analysis show an influx of new business over the last quarter? Has your customer base dwindled as compared to the same period of time last year? This actionable insight helps you better understand external factors, inform business decisions, and gain customer insight.
Utilizing Foot Traffic Analytics for Informed Business Decisions
Let’s examine how businesses can deploy foot traffic analysis strategies to measure success.
Foot traffic analytics can augment the visibility of a variety of key business metrics. These insights can be harnessed to predict quarterly revenue outcomes and determine future site selection opportunities. Your organization can leverage foot traffic data to analyze key business criteria, including:
- Store Performance. Physical store analytics helps with understanding your target audience, their lifestyles, and their visitation habits. This will help you strategize store layouts, inventory levels and types, as well as the marketing necessary to capitalize on popular products.
- Customer Visitation Habits. How often does your target customer visit your location – or your competitors, or even the businesses in the surrounding area – on an hourly, daily, weekly and monthly basis? Where are they traveling to and from? The shopping patterns of residents within your targeted geographical region can boost confidence in your decision making. Understanding demand forecasting from the perspective of foot traffic will allow you to use venue-specific data as a proxy.
- Site Selection. If your business model is one based on expansion, detailed retail analytics regarding the health of your current locations can allow for adjustments and strategy shifts prior to opening your next store. Is your existing business portfolio hitting forecasted traffic targets and servicing your intended customer base? Furthermore, foot traffic analytics can provide insight into the next best areas to open a location, utilizing information like physical market gaps, emerging popular areas, the home and work locations of your existing visitors, and more.
- Competitive Intelligence. Understanding your competitive landscape enables you to determine the viability of your business amongst other locations in a given area. What’s more, foot traffic analysis offers important insight into the visitation patterns of competitors' audiences.
- Portfolio Benchmarking. If you’re interested in how individual stores within a brand are performing relative to the industry itself, portfolio benchmarking can help. From competitor analysis to inter-industry comparison, foot traffic metrics can be utilized to determine your viability and positioning within not only your location, but your vertical itself.
Effective analysis of foot traffic provides end-to-end visibility into the habits of your intended customers. From capture rates to consumer retention levels, the comprehensive, encompassing interpretation of aggregated datasets can unlock new growth opportunities for your organization. Seeking out a foot traffic data provider can augment your ability to decipher these and other important metrics.
Case Studies: Real-World Applications of Foot Traffic Analytics
We analyzed the foot traffic data of convenience stores across the country in order to determine who would be crowned king of road-trip pit stops. Beyond traffic, we also examined the visit duration for each of the major retailers, to gain insight into which brands were able to lean into the grocery store market, signified by longer shopping trips.
The data revealed not only the visitation champion, but also offered precise insights into a vulnerability that could offer future success. On a regional level, convenience brands like 7-Eleven and Circle K owned large shares of their market with no real competition. In terms of visit duration, Circle K could identify an opportunity to market themselves along the lines of a grocery store, as their average customer stay was longest, at around 20 minutes.
7-Eleven identified that Thanksgiving weekend was particularly slow for business. With a targeted marketing campaign centered around the holiday, their fortunes could change in the coming years.
Foot traffic is a predictor of financial performance for industries that rely on in-person transactions for a portion of their total revenue. The correlations between traffic and revenue are particularly high in businesses like hotels, movie theaters, convenience stores, and restaurants.
Perhaps no other business marries the concepts of human mobility and in-person transactions as well as hotels. The business model depends on human migration, and the transactional nature of purchasing a room for the night allows for unique insight into the importance of a desirable location. Studying foot traffic analytics and location data allows hotel business operators to further segment their guest bases across demographics, in order to target future marketing and meet specific needs.
The Predictive Power of Foot Traffic in Various Industries
Foot traffic is a predictor of financial performance for industries reliant on in-person transactions. The correlations between traffic and revenue are particularly high in businesses like hotels, movie theaters, convenience stores, and restaurants.
This information can be incredibly powerful for businesses and investors that need leading indicators for revenue. To learn more, book a meeting with us.
Data Sources and Privacy Considerations
Foot traffic data is extrapolated from mobile phones, cameras, and sensors. With privacy laws and governance protocols in place, the collected information respects individual privacy while providing valuable collective data.
Unacast has a multitude of location data sources and data offerings that inform its machine learning powered location insights. For more information on our methodology, check out our location data page.
FAQs About Foot Traffic Analytics
What is Foot Traffic Analytics?
Foot traffic analytics involves the collection and analysis of data regarding the movement and presence of people in a specific area. This is especially relevant for retail and business locations, where understanding customer movement patterns can inform strategic decisions.
How is Foot Traffic Data Collected?
Foot traffic data is primarily collected through sensors, mobile device tracking, and cameras. Technologies like the Internet of Things (IoT) and geolocation tracking on smartphones contribute to gathering this data, ensuring accuracy and comprehensiveness.
Why is Foot Traffic Analytics Important for Retail Businesses?
For retail businesses, foot traffic analytics is crucial for understanding customer behavior, peak visiting times, and shopper demographics. This information helps in optimizing store layout, marketing strategies, inventory management, and improving overall customer experience.
Can Foot Traffic Analytics Predict Business Performance?
Yes, foot traffic analytics can be a significant predictor of business performance. By analyzing the volume and patterns of foot traffic, businesses can correlate this data with sales figures to forecast revenue and make informed decisions about marketing and operations. Check out our in-depth report, Can Foot Traffic Predict Quarterly Revenue?
How Can Foot Traffic Analytics Help in Choosing a Business Location?
When choosing a business location, foot traffic analytics provides insights into the volume and patterns of potential customers in the area. This helps businesses select locations with high customer engagement potential and align their offerings with the local market demand.
Are There Privacy Concerns with Foot Traffic Analytics?
Yes, privacy is a concern in foot traffic analytics. However, Unacast adheres to the most stringent privacy laws and regulations worldwide. Our focus is on aggregated data that respects individual privacy while providing valuable insights.
How Can Small Businesses Utilize Foot Traffic Analytics?
Small businesses can use foot traffic analytics to understand their customer base better, identify peak business hours, and optimize their marketing and operational strategies. Even simple forms of data collection, like manual counting or basic sensors, can provide valuable insights. Unacast Insights, our location analytics software, provides easy-to-use foot traffic analysis without the need of data scientist support.
Unacast: Offering Customized Foot Traffic Data That Matters
Unacast partners with today's business leaders to create bespoke consumer foot traffic tracking strategies. We offer worldwide GPS data, aggregated location data, and location analytics software to provide businesses with unrivaled insights.
Foot traffic metrics tell the story of your business, whether offering new insights into your current location, or forecasting future growth. These datasets can be cross-referenced to account for the historical impact of catastrophic weather and other large-scale events (like pandemics) in a given area. This information can offer site selection considerations from another vantage point, as weather events and other non-business related disturbances can affect the population growth of your proposed locations.
By analyzing the key metrics related to the migration patterns of your target consumer, you’ll be able to make informed decisions for site selection or deselection. Teaming with our experts will afford you the opportunity to learn how you can boost your competitive advantage.
Our data-informed human mobility insights offer you the ability to understand foot traffic to your existing venues, as well as trade area analysis and cross-visitation trends. By accurately assessing the health of your current operations – and understanding how your market penetration efforts would impact a proposed future location – you’ll have everything you need to make empowered business decisions.
To learn more about how Unacast solutions can help your organization understand foot traffic metrics, check out our Retail Site Selection eBook. This resource will illuminate the power human mobility data can offer in order to determine the ideal location for your growing business.
Conclusion: The Future of Business with Foot Traffic Analytics
Foot traffic analytics play a crucial role in understanding and forecasting business success. Whether you're assessing your current operations or planning future expansions, these insights are invaluable.
Ready to leverage foot traffic analytics for your business? Contact us for tailored solutions.