Location analytics built on spatial data can help find your next business location, but it's only when it's combined with other data that you can understand your customers, manage supply chain issues better, and make your next investment smarter.
First question: Do you need a location analytics solution? Or are you looking for specific data like foot traffic data or points of interest?
What people mean when they refer to “location analysis” or “location intelligence” can cover a lot of ground. Let’s take a look at how they’re typically defined:
Location Analysis: Location analysis, also called site selection, is the process of collecting and analyzing data on specific locations to ensure its suitability for a company’s specific objectives or planned usage. In other words — “Does this specific site we’re considering have the potential to successfully meet our needs?”
Location Intelligence: On the other hand, Location Intelligence is the practice and processes of gleaning insights by layering and visualizing geospatial data sources with other data sources in order to drive better-informed business decisions.
Geospatial Data: Geospatial data are the specific types of geospatial data that can inform and shape both location analysis and location intelligence. These data types are incredibly varied and can include foot traffic data, points of interest, historical census data, and much, much more.
So the first question really is — which solution is right for you?
These use cases are far from exhaustive — but by understanding your needs, you can determine which type of solution is right for you, helping narrow down your search early on. If you're not sure, schedule a meeting with Unacast and we'll be happy to help walk you through things.
Second question: What other data sources do you want to work with?
Unacast routinely works with consultants, software companies, investors, insurers and others that want aggregated location data to supplement their own data streams (e.g. demographic data, transaction data). In this case, clearly defining how location data is expected to interact with and add to the output of the combined data stream is essential.
The use cases for finance, insurance, real estate, telcos and supply chain logistics are all very different. Dealing with a location data provider with experience servicing the unique needs of your own industry is important. Otherwise, you’ll likely overspend on a kludgey data set that's tough to ingest and even harder to use.
While the demographic data requirement (age, education, income etc.) is most pronounced in retail site selection use cases, it is becoming very common for the insurance industry and real estate investment industry to want some level of insight into the demographic makeup of a given region or consumer profile.
Likewise, when combined with a company’s transactional or customer data, location intelligence and human mobility data can paint a portrait of movement, intent, and consumer action. Further fused with the accurate demographic data mentioned above, this often reveals hidden insights.
So maybe a better question to ask is what data types are available and how are they typically used?
Third question: Are you more interested in geospatial data as a tool of competitive intelligence?
Location analysis for site selection is important, but it's only a single part of a broader location intelligence effort. Location data can be used throughout the enterprise, to help manage the supply chain, keep an eye on the competition, improve business processes, or conduct a growth analysis.
In one supply chain use case, a leading paper goods supplier studied how the exodus from offices affected their need to deliver goods. They discovered which products — and when and where they needed to move them — had drastically changed in downtown business areas.
In one very cool use case Unacast examined, a major retailer conducted a detailed competitive intelligence process to find out where their target market currently shops and how they move between different brand locations and then used this data to find their ideal location.
Business processes can be improved by location analysis in a variety of ways.
For instance, by understanding when customers shop by analyzing foot traffic, you can more efficiently schedule your staff. By understanding how your host community or facility is growing, you can plan your own growth more intelligently. By understanding who else your customers visit, you can inform key marketing relationships and tactics.
The point is, the business applications for location analysis are as broad as the datasets at your disposal. Narrowing down to what matters for your specific use case is part of the art of location data science.
A few words about site economics and logistics
It’s important to consider the total costs of a potential site for your business. Even if the location seems perfect, several factors can impact its economic feasibility, causing the business to be unsuccessful. You probably know them well, but here are a few basics to consider:
- Do you want to buy, build, or rent space?
- What renovations are required before you use the space?
- Who is responsible for maintenance and repairs going forward?
- How close is the site to distribution centers and your suppliers?
- How will your staff get to and from work?
- Ditto for customers getting to and from your location?
- Is your host community growing?
- If so, how are demographics shifting?
- How does that affect your potential workforce?
- What does it mean for localized foot traffic patterns around nearby points of interest?
Frequently asked questions about location analytics
What does location analysis include?
A location analysis should include the following elements:
- Demographic analysis: Understanding population data, such as age, income, and lifestyle, can determine if your target market is present in the area and if your products or services will be in demand.
- Market analysis: Understanding the local competition, market saturation, and market trends.
- Site analysis: Evaluating the physical characteristics of a potential location, including access, visibility, and foot traffic.
- Accessibility analysis: Analyzing transportation and connectivity, such as proximity to highways, public transportation, and pedestrian access, can help determine the accessibility of the location for customers and employees.
- Economic analysis: Understanding the local economic conditions, such as unemployment rate, per capita income, and real estate market, can help determine the economic viability of a location.
- Environmental analysis: Evaluating environmental factors, such as natural hazards, environmental risks, and sustainability, can help determine potential risks.
- Geographic information systems (GIS) analysis: Utilizing GIS technology and geospatial data, such as human mobility data and demographic data, can help you make an informed decision about your potential investment.
What is the importance of location analysis?
Location analysis helps businesses make informed decisions about selecting their ideal physical locations, which can have a significant impact on their success. It also helps businesses make better decisions more quickly in the future. Some of the key benefits of location analysis include:
- Intelligent site selection: A thorough location analysis helps businesses make the best possible choice for their business in determining a new location.
- Better market understanding: Location analysis requires companies to gain a comprehensive understanding of the local market and determine the potential demand for their products or services.
- Increased efficiency: By analyzing transportation and other accessibility factors, businesses can determine the best locations to optimize for foot traffic, efficient operations, supply chain, and distribution.
- Reduced risk: Location analysis can help mitigate potential environmental and economic risks.
What is location analysis in the context of a business plan?
As discussed above, location analysis is the process of gathering and analyzing data in order to analyze a site, or multiple sites, for a potential business location. A location analysis is part of a comprehensive business plan that includes examination of the physical, economic, and demographic characteristics of a potential location. The purpose is to determine the viability of a particular location for the business and to provide information that will inform strategic decisions.
What are the different location analysis methods?
How you approach your location analysis depends on your needs, but several common methodologies include:
What is the purpose of a location strategy?
The purpose of a location strategy is to ensure that a business is located in the best possible place to maximize its chances of success.
Don't just ask questions about location analysis, get the answers you need. Schedule a meeting now with one of our friendly location data experts, or request a data sample to get started.