AI and machine learning combine with business intelligence and shopper insight to deliver optimal retail solutions.
Trackernomics provides retailers with the data they need to optimise their store networks, store formats and product and service solutions.
Craig Phillipson, founder of international retail consultancy Shopworks says, “Trackernomics combines multiple streams of tracking data that are available on a macro, mid and micro level with Artificial Intelligence and machine learning to help predict and secure retail profitability.”
“In the future there will be fewer, better shops,” says Phillipson. “The Covid_19 pandemic and trend towards online shopping is forcing many retailers to re-evaluate their physical estates. Retailers know that they need to have bricks and mortar stores in the right place, with the right format and the right product and service offering if they are going to thrive, and Trackernomics delivers the data and insight necessary for confident, future-focussed decision making.”
Building on 20 years of research and insight Shopworks launched Trackernomics in November 2020 and are already in discussions with multiple retailers about how it can be used to define, support and strengthen future retail strategies.
At a macro level, network optimisation informs current location issues and identifies opportunities across retail networks. Harnessing geospatial analytics to understand the complex relationships between people and places, Trackernomics combines multiple data sources with a retailers’ own business intelligence to make accurate revenue predictions for both existing and new store locations.
It draws from multiple external data sources including open data census and demographics; points of interest such as restaurants, parks, hotels, QSR’s competitor stores etc; human mobility data, based upon work/home mobile phone location analysis; vehicle mobility data from GPS tracking; psychographics and consumption and purchasing data for different categories based upon credit card data analysis. When combined with business intelligence such as sales volumes by store location retailers are able to gauge not only which stores in their network are performing well, but to what that success can be attributed. Having understood what good looks like and why, it is possible to identify other locations where success can be replicated.
“It’s a rich mix that enables retailers to understand their catchment areas and competitive set,” says Phillipson. “It gives a fix on the optimal number of stores needed within a network; where retailers should invest and divest to maximise ROI; what type of store is required in a given location and how profitable it will be. It can also help to determine network white spots where a retailer has no coverage but where profitability and potential is high.”
At a mid level, format optimisation maximises format potential across a network, drawing on data derived from business intelligence and shopper research to understand shopper profiles, shopper motivation, mission and movement within the retail environment.
“Format optimisation is a key area of focus at Shopworks,” confirms the company’s head of research Caroline Myall. “Once we have determined the best place for a store to be located, we have to determine the format proposition that will best serve and appeal to the local catchment.”
“First, we analyse basket sales and loyalty data to determine current prevalent shopping missions that can be attributed to a format. Then, we conduct shopper research to validate format attribution and explore future missions potential. Once we understand all of the shopping missions that are relevant to format, we can identify the categories and services that are critical to delivering them, ensuring that the retailer maximises the footfall potential within their environment.”
At a micro level, space optimisation enables retailers to increase sales performance and profitability with AI-enhanced category management and space planning tools that analyse, predict and suggest actions to drive the growth of products and services. Retailers can also learn how to drive product innovation, understand the impact of pricing and promotional strategies, maximise profit and improve ROI.
Shopworks have been doing a combination of network, format and space optimistation for their customers such as Shell, Emarat and Vue cinemas for many years.
Phillipson concludes, “The real breakthrough here is that our new data analysis tools are allowing us to combine external demand with internal supply data inputs to deliver bigger, more holistic success for our customers.”