How to use data analytics to make bricks and mortar a success

Picture this: you run a growing online business – and one day suddenly you lose all access to your metrics. You now have no idea what your audience read or view, how they found your content, or even who they were. Let alone demographics or fields of interest

That’s a modern-day apocalypse

After all, these addictive facts and figures are essential in maintaining your success and attracting new audiences. The digital world, still relatively young, has figured that out (66% of websites use analytics software, according to estimates from W3Techs).

But the physical world is somehow still lagging behind.

Location intelligence – understanding how people interact with the spaces around them – is key to succeeding in a traditional yet rapidly changing world of brick-and-mortar. Regardless of whether you own a high street shop, a restaurant or a mall, data is key. But let’s first look into the options out there for those businesses. They’re limited, and that’s a problem location intelligence companies like PlaceSense are working to fix.

Location Intelligence Option 1: Manual counting and surveys

Manual counting is useful in that it gives a snapshot of customers at a given moment and paints a picture of those customers. You find out who they are, why they’re there and when/how often they come.

The problem? It’s only one snapshot in a confined space. If you were there on a Wednesday morning in mid-May, would your numbers reflect a Friday afternoon in October? Probably not. But how would you know for sure? The main comparison you have is whenever that footfall survey was last done, which might have been a year ago.

Even surveys that are rigorous and use, for example, 30 count points over many hours and days ultimately fail to give a really granular, real time picture.

Location Intelligence Option 2: Laser counting 

An alternative is setting up automatic laser counters. That solves the problem of a small snapshot: suddenly you have access to constant data about how many people enter and leave whatever area you’re surveying.

That data, however, is severely limited. You’ve sacrificed an in-depth understanding for a broad picture. You know the number of customers, but nothing about their habits or even whether you have succeeded in attracting return customers or entirely new ones.

Location Intelligence Option 3: Cameras

So why not install cameras? It’s a similar story to laser counting: you get a lot of ongoing counting potential with little depth and understanding of your customers.

Sure, there is software out there that can take you a step further with cameras. Face detection software, such as the kind developed by the Fraunhofer Institute of Integrated Circuits, can estimate facial expressions, gender and age.

But you can’t underestimate the suspicion cameras cause. A proliferation of CCTV, watching people’s moves and, especially their faces, has connotations of a surveillance society that makes them, understandably, uncomfortable (even if, as in the Fraunhofer system, the software deletes the images and only sends the data). That’s especially true in a city like London, where there is one camera for every 32 people. And with targeted ads everywhere, we are all becoming more wary of how our daily interactions can be used to sell us products.

And that’s before we get into how capital intensive counting cameras are, from their acquisition (think $1,200+ each) to extra costs, including software (and possible training to run the software) and regular maintenance.

Luckily there is another option.

Location Intelligence Option 4: Smart phone data

More than 70% of the population in countries like the UK, Germany, the US and Canada have smartphones. That’s a massive – and under-utilized – resource.

PlaceSense and other location intelligence companies tap into both mobile sensors and user data in a given location, and the picture that paints makes a footfall survey look downright primitive. You can suddenly generate real time, complex data that tells you who your audience is, what they like, what they do, what they respond to and how.

For businesses that thrive on location intelligence, this is a dream coming true. Harnessing all that data would allow the physical world to leapfrog over the capabilities of your website’s analytics. You’re not limited to seeing how an audience interacts with your property – you can see how they interact with the entire ecosystem around you, including your competition.

With all this data at our fingertips, why hasn’t that been properly tapped? One challenge we face is GDPR. Harnessing that data without encroaching on individual privacy – or creating connotations of Big Brother – is tricky. You need to be able to anonymize it without losing the granularity that makes location intelligence the obvious alternative to footfall surveys. It’s why a lot of people jumping into this space are based in the US, rather than Europe, and why some European players limit what mobile data they access from users.

At PlaceSense, we believe we are taking on just that challenge, creating a solution by accessing mobile sensor data and (aggregated and anonymized) app data to pull together comprehensive real-time images of whatever location we need.

Another problem is that, in some ways, businesses still don’t fully comprehend the importance of all this. Carto’s 2018 State of Location Intelligence Report showed that only 17% of businesses analyze the most granular available spatial data. But at the same time, as the chart below shows, over two-fifths of those surveyed said they want data that helps them understand visitor patterns. A similar number want to know where they come from.

Right now, research companies exist to wander the high streets, count the people there and ask them why and how often they come. The property press still devotes precious bandwidth (not to mention physical pages) on those footfall surveys. Why? Because, primitive as it is, that data is incredibly valuable to changing property and retail industries trying to figure out how to cope with the future. As we can see, however, there are better options.

So what needs to happen? Awareness. Businesses should recognize why recent methods of collecting location intelligence are quickly becoming obsolete. Meanwhile, the tech industry, especially in Europe, needs to step up – like PlaceSense is doing – and provide a solution for those businesses. That solution has to be intuitive, accurate, and, of course, compliant with the growing demand for privacy.

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