A Guide to Using Location Data for Competitive Intelligence

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Competitive intelligence is the foundation for how companies understand their market, develop their strategy, and grow their business. Yet, many companies are reliant on guesswork to understand the success and share of competitors in a market.

We’ve seen broad uses for location data in competitive intelligence. This data allows companies to:

  • Learn where competitors are located
  • Understand how many customers go to competitor locations and the trend over time
  • Develop an understanding of the type of customer that shops at a competitor
  • Analyze trends in market share and return rate

Collectively, this information can guide decision making around market planning, promotional strategy, marketing, and product assortment, among other uses.

In this article, we’ll take you through a representative use case in the grocery industry. We selected the Tampa, FL area as a growing metro and are going to focus on four grocers that compete in a similar segment of the market:

  • Whole Foods
  • Sprouts
  • Trader Joe’s
  • Fresh Market

We’ll go through a competitive analysis to look at how location data drives novel insights on competitor market planning, visitation trends, market share, customer profiles, and brand loyalty. This, in turn, helps brands better understand their true competition, market opportunity, and where they can differentiate.

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WHERE: MARKET DENSITY & LOCATION

Assessing competition starts with knowing where the competition is and the density they’ve built within a market. 

Among the competitors in our analysis, Unacast data shows that Sprouts has the most locations in the Tampa metro (12) followed by Fresh Market (5), Whole Foods (3), and finally Trader Joes (2). 

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Visualizing the locations on a map shows that Sprouts frequently has whitespace surrounding it relative to the three other competitors. Whole Foods, by contrast, is never more than 1 mile from its closest category competitor.

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While Fresh Market and Sprouts are more ubiquitous, Whole Foods and Trader Joes customers will travel further to their location.

This wider trade area means that customers are not necessarily choosing to go to the closest location. It’s oftentimes an indicator of a competitor that has developed strong brand loyalty and competitive differentiation.

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This type of dynamic trade area data supports more intelligent market planning. An area that looks like whitespace might actually be more saturated when considering the distance loyal customers will travel to reach key competitors.

Starting with a baseline understanding of competitor locations, market density, and trade area helps a brand understand who they’re likely to compete against and provides insights on a competitor’s market planning strategy and brand strength.

MARKET SHARE: VISITATION COUNT AND TRENDS

The next step after understanding the competitive location profile is to understand visitation patterns. Which competitors are most popular? Who’s gaining and losing share in the market?

In the Tampa market, Trader Joes has the highest foot traffic per store. Their numbers are well above Fresh Market and Sprouts and slightly higher than Whole Foods. 

Due to its low store count, this could be a sign that customers are seeking them out at a higher rate and aligns with the wider catchment area seen earlier.

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Using Unacast visitation data, we can look at the bigger picture to understand market share and share shifts over time for premium grocers in the market. Of the customers that visit these 4 locations, what percentage of visits are happening at each store?

Foot traffic data reveals that Sprouts and Whole Foods have been gaining a higher percentage of visitors over the past 3 years while Trader Joes and Fresh Market have been declining in share.

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This growth is largely attributable to store count growth. Whole Foods opened a new location in 2021 and Sprouts opened multiple stores during this time period.

That said, even after controlling for only stores open during the entire period, we still see share shift toward Sprouts. Their total share of visits increased from 42% to 45% between 2020 and 2023 YTD among locations open during the whole time period.

Total visitation volume for these 4 brands from 2020-2022 was largely flat (excluding new stores), which means that share shift is an important driver of growth above and beyond customers new to the category.

While Trader Joes is the most popular on a per store basis, Sprouts’ convenience and continued location growth is giving it an edge in gaining additional foot traffic in the premium segment of the market.

CUSTOMER PROFILES

Ultimately, competition comes down to winning against the brands where you compete for the same customer. Even though these grocers all operate in the premium segment of the market, do they compete for the same customer?

Unacast psychographic data unlocks insights not just on visitation patterns and trends, but who is visiting the store. 

Let’s zoom in on the area west of downtown Tampa where all four grocers operate in close proximity and look at whether the brands are attracting similar segments – suggesting direct competition – or whether the shopper profile varies.

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The Unacast Insights platform surfaces the top customer segments for each of these locations. Visitors to the Whole Foods, for example, tend to be much younger than customers at competitors. Young Urban Singles and Young Professionals total more than 40% of the top customer segment at this location.

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Trader Joes has a similar profile attracting young and diverse shoppers to its location, though their customer profile is less concentrated in the top category than that of Whole Foods.

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At Fresh Market, by contrast, the Young demographic segments comprise only 26% of shoppers. This Fresh Market location is more likely to attract higher income households and an older demographic.

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Finally, Sprouts has the most mixed and diverse shopper profile. This is likely why they’re able to operate more locations than the other brands – their customer base is more diversified and general population compared to Whole Foods’ niche segment.

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These shopper profiles suggest that Whole Foods and Trader Joes are more likely to be competing for the same customer, while Whole Foods and Sprouts are less likely to be competing head-to-head even when located near each other.

This information can be used to craft marketing messages and customer acquisition strategies that show differentiation not just from the market as a whole, but from the competitors where the brand is directly competing for the same customer.

Further, this information can be used to align product assortment & displays with the shopper profile. The products bought by a younger consumer will likely look slightly different than a household shopping for a family, and a clear understanding of the shopper profile can be used to tweak the store to best cater to the target shopper, maintaining better customer satisfaction.

RETURN RATE & CUSTOMER LOYALTY

On the topic of customer satisfaction, a final benchmarking tool for competitive intelligence is the rate at which a brand and their competitors are retaining customers. How many customers return quarter-over-quarter and shop at the location again? 

The metric we’ll use to gauge this is the return rate – the percentage of customers that visited in the prior quarter and returned in the current quarter.

When the return rate slips, this suggests opportunity for share gain from competitors. When it rises, it suggests brand strength and affinity – loyal customers.

Staying with the cluster of stores identified above, we can look at which competitors are best at keeping customers and benchmark performance against each other.

Whole Foods has the highest return rate of the four grocery stores at 27%. Sprouts and Trader Joes have the lowest.

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While Trader Joe’s is known for its avid customer base, this data indicates that they may also have a large portion of customers that try their brand and decide it’s not for them. 

Trader Joe’s is an outlier in the industry given their reliance on private label goods. This may lead to lower retention due to customers that try Trader Joe’s but decide they prefer the name brand CPG products that can be found at other stores.

As another supporting data point, Unacast cross-visitation data shows that customers that visit this Trader Joe’s also have high cross-visitation to places like Costco, Walmart, Publix, Whole Foods, and Fresh Market. This may support the theory that a high percentage of visitors try Trader Joes, then revert to a more traditional grocer. 

Whole Foods, by contrast, has lower cross-visitation with other grocery stores and a higher return rate. Their target customer is more niche and they cater to this customer with their product selection and store experience. This makes switching more difficult because there are fewer options within their segment of the premium market.

The return rate is a clear and objective measurement to understand how well a brand and its competitors retain customers, particularly in grocery where trips happen more frequently than, for example, a retail clothing store.

Tracking which competitors are vulnerable helps companies identify where to focus their customer acquisition efforts and marketing along with developing a baseline understanding for their performance benchmarked against competitors.

CONCLUSION

Location data unlocks new ways to approach competitive intelligence questions. It enables precise, objective data to benchmark a brand’s performance, understand competitor performance, and be highly targeted in customer acquisition efforts.

It also supports measuring the impact of key marketing campaigns or customer acquisition strategies within a market. When you launch a campaign, do you see share shift in the market? If yes, where is that shift coming from?

Building an understanding of competitive activity in a market drives better strategic decision making. Location data powers these competitive insights by providing views into previously inaccessible information like competitor foot traffic & performance, customer profiles, and market-wide industry trends.

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