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This Isn’t Your Grandfather’s Store Locator

BY CSA STAFF

By A.J. Clark, Thermopylae

First came typewriters, then we moved to word processors; from there, IBM’s Lotus emerged and changed the game by expanding capabilities into a suite of business tools that organizations could utilize to grab a competitive advantage. Microsoft crushed IBM’s domination with Office, bringing with it a revolutionary, interoperable approach to creating all sorts of business documents and presentations: documents, spreadsheets, presentations, workflows, etc. Now, we are in the midst of the cloud revolution, and another new era in productivity will once again push forward what we consider a standard toolbox.

What is the next leap in capabilities, especially for chain stores? Maps. Information visualization over a map is not necessarily a “new” document type, but the rise of democratized geo data and capabilities puts this in the hands of the majority — no longer just the GIS analysts. This is comparable to PowerPoint unlocking the ability for everyday users to build and display ideas without having to wait for a graphic designer to create presentation slides. Data with associated locations can be overlaid on a digital map, layered with other data sets, and manipulated to gain unique insights.

Chain stores can take unique advantage of this growing capability to make staffing, marketing, and other types of decisions. Perhaps the most powerful competitive advantage for chains is the insight gained to assist in franchise expansion, promotion, and sales efforts by visually displaying critical information regarding location, customer demographics, and business strategy.

Power in Location

Beginning with a simple plot of data — your store locations and competitors’ store locations — we already have a strong canvas from which to work and perform quick analytics like proximity to competition and regions of high or low coverage. Adding additional, more complex data sets such as store reach, local demographics, and traffic volume serves to now reveal many more intricate business intelligence scenarios. With 3D mapping capabilities, even more options become available. Imagine being able to visualize highway access to a store or even conduct line-of-sight analysis for optimal placement of signage.

The analytics that can be performed from visualized data start to become limitless and demographic layers that contain information on local populations are the key to unlocking the value of these analytics for chain stores. Data like household income, average spending, and household occupants can be set against automated analytic processes that are programmed to identify major areas of opportunity based on specific criteria. Identifying pockets of potential customers that meet your store’s targets can prove invaluable to planning store expansion, promotions, or competitive analysis.

For example, if your store targets duel occupant homes with a household income of $45k-70k that buy prepackaged food products more than three-times per month, you can automate an analytic to highlight these households/neighborhoods on a map, compare those locations to that of your current stores, and calculate the average distance from customer prospect to store.

Data Translated to Strategy

It’s not enough to just have data on a map or even the analytics that come with it if it isn’t informing business strategy. There are many areas where these answers can guide strategic decisions and shape campaigns. Promotions can be visualized by their varying degrees of success and failure; this can help predict success in new locations and guide future planning.

The demographic information discussed earlier shows whether or not a store would reach your target audience and help clarify the expected success of a new site. Site reach and radius will help location planners understand if market share is being cannibalized by self-competition.

The end result is a combination of more efficient and successful promotions, more accurate expansion decision-making, increased sales, higher customer retention, and greater probability of success. In other words: higher volume, reduced risk, and greater profit potential.

Critical decision-making requires more than just a single data point. When you are able to break down the silos that contain all that valuable business data and put it in a place where it can be quickly and easily understood, you start creating an environment where all the information necessary to make the right decision is available. Being able to visualize that information offers strategic decision-makers an easy-to-understand view of who, when, where, and how.

When integrated and visualized, business intelligence mapping creates ROI on information that is greater than the sum of its parts. Individual data points are limitations in the decision-making process necessary to create competitive advantages, but when combined and presented in a geospatial context, businesses have a powerful roadmap to strengthening existing stores and making the best possible decisions for expansion

A.J. Clark is president of Thermopylae, a leader in geospatial mapping technology, allowing organizations to harness, visualize and make sense big data they already have, using Google maps as a platform, and was named Google Enterprise Global Partner of the Year 2013 for Google Maps. He can be reached at [email protected].


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Deeper Dive On…Nordstrom

BY CSA STAFF

Nordstrom Inc. has become the first retailer to launch the Like2Buy platform, which allows Nordstrom.com customers to directly purchase items featured on the retailer’s Instagram page. The commerce-enablement of visually oriented social platforms, such as Instagram, Pinterest and Vine, is an inevitable development as social media becomes more focused on photos and videos and less on text. The preference most Millennials have for visually oriented social media reinforces the value that commerce enabling these platforms has for retailers.

(See original story)

However, Nordstrom’s Like2Buy rollout has a couple of interesting wrinkles. As previously covered in “Deeper Dive,” both Facebook and Twitter are tinkering with their own direct e-commerce functionality, while to date Instagram can only be directly enabled for e-commerce via third-party solution. But considering Instagram is owned by Facebook, it is presumably a matter of time before this changes.

In addition, it is interesting that a retailer targeting an older, more established base such as Nordstrom is pioneering Instagram e-commerce, as opposed to a more youth-oriented retailer. But Nordstrom has also been in pioneer in tying Pinterest to the in-store shopping experience, so perhaps it is indicative of a broader willingness to innovate in the social/omnichannel space.

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An offer Family Dollar can’t refuse

BY CSA STAFF

The Family Dollar board is under new pressure to walk away from a deal with Dollar Tree after Dollar General further increased an already more generous counter offer.

Early Monday Dollar General increased its all cash offer to $80 a share from $78.50 a share and increased the number of stores it said it would be willing to divest to 1,500 from 700. The company also said it would be willing to pay Family Dollar a $500 million reverse break-up if the deal failed to secure antitrust clearance.

Family Dollar already has an acquisition deal in place with Dollar Tree for $74.50 a share, consisting of $59.60 in cash and $14.90 in Dollar Tree shares. While Dollar General’s initial proposal was richer and all cash, concerns surfaced that regulatory approval could be an issue even though Dollar General indicated it would divest up to 700 locations.

“We are confident that our enhanced proposal sufficiently addresses any concerns that led Family Dollar’s board of directors to reject our prior proposal without any discussions between our companies,” said Rick Dreiling, Dollar General’s chairman and CEO. “Even as a secondary antitrust review supported our previous proposal, we revised our offer to demonstrate the seriousness of our commitment. Our revised proposal provides Family Dollar shareholders with significantly increased value over the existing agreement with Dollar Tree, as well as immediate and certain liquidity for their shares. If the Family Dollar Board fails to seize this opportunity to maximize value for its shareholders, we will consider taking our superior proposal directly to the Family Dollar shareholders.”

Dollar General believed its earlier 700 store divestiture commitment would have been sufficient to clear any review by the Federal Trade Commission and suggested those analyzing the deal on behalf of Family Dollar are using a flawed methodology.

“Perhaps Family Dollar’s advisors are analyzing this transaction as if it were a potential grocery store merger or utilizing data that tells a story much different than Dollar General's documents and data,” according to a Dollar General statement. “Dollar General is confident that this matter would not be evaluated as a traditional grocery store merger and that, as the acquirer, Dollar General’s documents and data would be more important to the FTC in its analysis than those of Family Dollar.”

Those documents indicate that Dollar General is more concerned about competition from Walmart than Family Dollar and it makes pricing decisions accordingly.

In a letter to the Family Dollar board, Dreiling expressed disappointment that the Dollar General’s earlier bid was rejected without any conversations but said the company was committed to the deal. The company took the added measure of engaging Richard Feinstein of Boies, Schiller & Flexner to independently review the company’s earlier antitrust analysis. Feinstein led the FTCS Bureau of Competition until 2013 and determined the deal can be completed on the company’s initial terms.

“We look forward to the time when our companies and their advisors are able to discuss these matters more openly with one another once you have taken the appropriate steps under your existing merger agreement to allow that to happen,” Dreiling said. “Only by engaging with us can you ensure that you have fulfilled your duty to your shareholders to be well-informed and that you have acted in the best interests of your shareholders to maximize the value of their shares.”

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