Using maps and location as a tool in understanding customer behaviour

GIS (Geographical Information Systems) has been  used in various segments since the early 70’s, and retail & marketing has been one of the early adaptors. It has become a tool that you should know about at least on some level – so I’ll try to clarify some of the most basic fundamentals and basic concepts trough a few examples. These concepts should give you some ideas how GIS can be used as a tool for understanding customer behavior.

All maps have basemaps; it may be a high resolution satellite image map – or it might be a grayscale map with only the rough edges of country borders. Basemaps are chosen so that they help in understanding and “locating” the actual information on top of the basemap.

Examples of Basemaps. Provided by www.esri.com

Examples of Basemaps. Provided by http://www.esri.com

Layers

Layers contain information that is important or interesting to somebody. It may be business data, like the locations of a company’s own shops, Demographic data like information about the inhabitants of the area..or maybe all the mobile phones with their WLAN switched on. In short, layers can contain anything relevant (or even irrelevant) data that contains a location.

paikkatietoakkuna

All the bus stops near the Myyrmäki Campus area provided by http://www.paikkatietoikkuna.fi

In the picture above, you see a screenshot with a basemap(layer) and a business data layer. In this case the business data is all the long-distance bus stops near the Myyrmäki area. Now, what if were to enrich the data with e.g. information about the average wealth in the area? Could we recognize e.g. the bus stops where a certain advertisement should be shown? What if we calculate the average walking time from different bus stops to the campus area? Or calculate from where the advertisement can be seen?

Network

The easiest way to measure a distance between two points is a straight line. In real life, travelling in a straight line is not plausible, so instead a road- or transportation network information is needed. Depending on the data, the network may contain such information like speed bumps, traffic data in relation to the time of day, usual traffic amounts etc. Don’t be too narrow minded though, roads are not the only networks around us. For example, a large shopping mall has a network of walking paths also.

Drivetime zones

Drivetime zones are something that can be refined from the network data. These can be used to answer questions like

I’m located in Myyrmäki campus. I want to advertise to customers within a 30 minute drivetime. Where are they?

drive_time_zone_30min

This simple GIS Analysis was done with ArcGIS Online. Looks interesting enough but what if..

Analysis

Analysis are where the soul and heart of GIS truly is. Maps, software, data.. they are only means to an end. Common analysis used today answer problems like “where should I locate my next supermarket” or “Where are my most valuable customers?” Now, to make things a little bit more interesting I created an example map with imaginary data which hopefully gives you some ideas what can be done now a days in minutes.

1. I used a data set found from here. For these purposes let’s just assume that this would be an interesting data set for us – maybe they are our potential customers e.g. for my upcoming pizza service where I target hungry dentists with a service promise of 15 minutes baking + 15 minutes drive time.

2. I added those points to a map

3. I created a drivetime analysis of 15 minutes

4. Just for the kicks, I used information from statistics Finland about purchasing capability of the people living in the area. Maybe rich people + dentists equal good business (probably not though) ?

dentists_drivetime_pizza

Hmm.. It may be that I may have to change my promise to 15 minutes bake + 20 minute drive to get those rich dentists from the west..

All this took me about 10 minutes, and the point was merely to demonstrate what is easily possible. More advanced analytics give better predictions but..

Lies, damn lies, statics.. and then maps

GIS is only a set of tools – although a powerful and a useful tool, but it does have it restrictions; and at least two of these one must realize:

  1. Data. It is all about data. Poor data means poor accuracy, great data means great possibilities
  2. The need for proper analyzing. Great data may mean great possibilities but as with analyzing tools the chosen methods must be correct for solving the business problem in case.

Keeping these restrictions in mind, I encourage you to go out and play with maps – they will give you insight hard to mach by anything else.

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About lainiola

https://www.linkedin.com/in/lainiola
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One Response to Using maps and location as a tool in understanding customer behaviour

  1. seijamikkonen says:

    A very interesting and professionally written post. It made me better understand how location services are created.

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