Driving Business Value with Geographic Business Intelligence

By David Loshin

For nearly a decade software solutions for location intelligence have addressed a variety of information-driven business problems. During the last 30 years, technology has become increasingly effective in storing volumes of data, but information management solutions have not been able to keep up with the growing demands for data transformation, classification, matching and integration.

In parallel with these trends, the Internet has increased demand for rapid delivery from all information resources. In particular, the awareness of geographic information components, highlighted in the geo-spatial pervasiveness of the Web, has begun to inform Web audiences on the power of visual geographic data presentations.

Location intelligent solutions have the ability to solve many information flow challenges by delivering a single, data-independent platform for the design, deployment and visualization of business processes across the enterprise. The result is an ability to predict, analyze and gain actionable insight on all of an organization's business transactions by incorporating a spatial perspective on every relationship.

Many large corporations with extensive data sets and marketplace requirements are leveraging location intelligence technology to solve a variety of critical information management problems.

For example, the apparel company, VF Corporation, had as its goal to be the worldwide leader in the localization of merchandising by knowing what consumers wanted in each geographic area. VF needed the ability to analyze its data in order to ensure its buyers would have the right products, in the right place, at the right time.

VF is the world's largest apparel company. For more than 100 years the company has manufactured apparel for brands such as Lee, Wrangler, The North Face, Vans, Reef and JanSport. These brands span virtually every retail distribution channel to stores including Walmart, Sears, Nordstrom, Kohl's and many others.

To increase sales of VF products on the retail floor, VF and its retail partners developed a technique called Retail Floor Space Management. This technique supports point of sale (POS) validation and analysis, sales planning, product assortment, category management and product replenishment.

In the past, VF had purchased a marketing information product from a well-known supplier to work with its internally developed tools to analyze retail partnership data and store trade area information. This solution did not scale throughout the enterprise to provide timely results, did not reliably define syndicated trade areas, and did not accurately geocode non-spatial or tabular data.

To address these shortcomings, VF needed a solution that could be easily integrated with existing applications, could support the importation and processing of large amounts of POS data within reasonable time frames, and had accurate geocoding technology. The company needed the ability to analyze brand and product preferences matched to consumer lifestyles, to identify specific clusters of stores similar to existing locations, and to draw comparisons and match website registrants with lifestyle information, demographics and product attributes.

VF selected SRC's software solutions to integrate with VF's existing information technology. SRC's Alteryx solution allowed VF to simultaneously use spatial analysis for product placement and track consumer trends within specific stores based on POS data and demographic information.

With VF's implementation of the platform, retail floor space management teams were able to better match products with consumer demand, while supporting efforts to more accurately predict assortments and other product attributes at the individual store level. VF also implemented this technology to quickly access, store, manage, retrieve and analyze multiple sources of business intelligence, both spatial and non-spatial data, regardless of origin.

Performance throughout the entire retail channel improved significantly, enabling the process of integrating and analyzing data to take place in minutes, rather than days or weeks. The solution has led to the successful tracking of 10,000 retail locations, more than 100,000 SKUs (stock keeping units) and 200 lifestyle variables for every store. In fact, data are updated nightly from retail stores, increasing the accuracy and speed of reporting.

In addition to the retail floor space management strategies, VF uses its consumer demographics to evaluate new and proposed store locations and to assist planners and category managers with placing merchandise in brand new stores. For some stores, VF is able to complete these tasks up to six months in advance. With this type of analysis capability, VF also can periodically realign existing inventory levels and optimize product offerings at the style and color level.

Internal buy-in of the analytics process has given the company's business analysts expanded access to these technology tools. VF was able to save more than 50 percent of its marketing information costs by providing decision makers throughout the organization with powerful information management and analysis tools.

Companies like VF Corporation are able to reduce overhead, improve data quality and significantly reduce processing and analysis time to deliver current marketing information. Location intelligence applications deliver better retail product selection, enhanced business-to-business service delivery and decreased costs.

The ability to incorporate geographic information as a way of gaining market and consumer insight essentially changes the way business teams can exploit their operational data assets. Business analysts have many questions to ask that depend on geographic knowledge. All of these questions suggest a common need for businesses to incorporate geographic information and spatial analysis within their operational and analytical applications.

Apparent technological restrictions imposed by traditional GIS, business intelligence and relational database tools have impeded business analysts from making the most effective use of geographic data, yet these barriers and challenges can be overcome. Employing a platform that provides high performance and scalability, rapid integration of data from almost any format or structure, and improved control over data quality empowers more individuals within the organization with the ability to use geographic business intelligence.

Significant benefits can be achieved, especially when the analysts themselves can tailor their own deliverables with respect to their particular spatial intelligence needs. Democratizing location-based information can empower the organization to reach new heights in operations, strategic analysis and knowledge.

Published Wednesday, August 27th, 2008

Written by David Loshin

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