Retail Mapping: Leveraging the Power of Location Intelligence for a Telecommunications Provider - Part One

By Abhishek Bhardwaj

The “What” and the “Why” of Retail Mapping

To understand the need for retail mapping we have to understand the extent of the sales territory for a telecom sales manager. A city may be divided into one or more distributors demarcated generally by a main road. For this article, we’ll use a hypothetical territory in the city of Bangalore, India (See Figure 1). The star markers indicate the shops in the area selling telecom products. We need to emphasize here that initially an organization doesn’t even have a list of these shops, let alone a map on which they are plotted.



Figure 1: Example of a sales territory - Part of Bangalore City, India, map taken from Google Maps
 
These outlets can be categorized in many ways. For example, we can have the following categories –
Categorization of Outlets

  • Multi-brand outlets – Those that sell telecom products of more than one telecom provider. These retailers are specialists in the telecom sector having an accurate understanding of a telecom customer. They end up being the biggest advisors to any sales manager and also the biggest source of info regarding the competitors.
  • Branded retail outlets – Those that sell telecom products of a single organization. These outlets are frequently company owned-company operated (COCO). However there can be other forms like franchisee owned-franchisee operated (FOFO). They are generally located in an up-market area where there is more customer foot traffic.
  • Kirana stores (Mom and Pop stores) – These are friendly neighborhood shops selling a variety of products for daily consumption in a household. Many times these shops contribute only a small amount of business to the telecom organization. However, they definitely increase the visibility and reach for any telecom organization.

For any telecom organization to do business it needs to place its products within these outlets. They are the customer touch points and the breadth and depth of the sales channel. Therefore, having a list of these outlets is one of the foremost and critical steps. This activity can be referred to as retail mapping.

How to do Retail Mapping

Below are few of the common ways to do retail mapping. It is not, however, an exhaustive list.

  • Obtaining and referring to an existing database - Many times channel sales managers and distributors of existing brands offer a new brand in anticipation of a larger salary and higher margins. They end up becoming an extremely important source of this information. These people bring with them an already existing list either in the form of a file or their awareness of the geography. The aforementioned method is the “easy way out.” This would help you directly go to those shops. But no telecom organization will consider a ready-made list as absolute. Even if a ready-made list exists, validation and verification are the necessary steps.  It is definitely unethical to disclose confidential information of the list of outlets of a competitor. However occurrence of this conduct cannot be ruled out.
  • Traversing the geography and visiting the outlets - Every morning all the channel managers and the employees of channel partners traverse the roads of their respective territories. They stop at every outlet selling telecom products. They search for posters, danglers, streamers, non-lit boards, lit-boards and other such branding elements. They stop at these outlets and record the information as needed.

What Should Retail Mapping Information Convey?

The information collected in retail mapping is extremely critical to make strategic decisions for various functions in a telecom organization. This information not only ensures an effective launch but also establishes a solid foundation and direction for the organization by aligning its strategy based on the truths of the geographical territory. This territory is analogous to a battleground where the competitors fight everyday to get a bigger piece of the customer share.
The main information sought about an outlet is the number of activations and amount of recharge done for various telecom providers. This information helps assess the importance of that outlet. An outlet doing high activations and selling significant recharge is definitely a very critical outlet in which to place stock.
An illustration of the information and its impact on the strategic thinking of marketing and sales functions in a telecom organization is provided in Figures 2 and 3 below.

Retail Mapping Info and Strategic Decision Making

Figure 2: Sales strategy for retail outlets based on info gathered about them

Figure 3: Marketing strategy for retail outlets based on info gathered about them
 
As-is Process of Retail Mapping

Each sales representative visiting an outlet would have a template form on printed paper. He would visit the shop and enquire about its performance. He would fill the form with the details as per the template. This activity would be done for each outlet. This information has to be consolidated for each road, colony, area and territory. Then it needs to be put into an electronic form, such as an Excel spreadsheet. Ultimately such lists are consolidated for various districts and add up to become the retail mapping tree for the entire state (refer to Figure 4).

Figure 4: As-is process diagram of retail mapping

An illustration of the form template used for retail mapping is given in Figure 5. There is a categorization criterion to pigeon-hole the outlets based on the recorded information. This helps in developing marketing and sales strategies, as explained above.

 



Figure 5: Form template of retail mapping with sample data

 
Illustration of Categorization of Outlets

Monthly Activations Category of Outlet
<50 D
51 - 100 C
101 - 200 B
> 200 A
Only Recharges E


Noise in the As-is Process

This process has sources of errors which can lead to significant loss of time, money and resources for the organization. Since this is a communication channel, we can term this as “noise” in the process.

Figure 6 shows the noise that can be introduced at various steps in this process and also the common issues that are faced due to the noise.

Figure 6: Sources of noises
 
Consequences of Noise

  1. Incorrect branding –Signs to be put on the retail outlets generally contain the name of the outlet. Noise can result in incorrect names being printed. This not only is a disincentive to the retailer but it also implies financial loss to the telecom organization in the process of printing, transporting and setting up a wrong sign at the outlet.
  2. Incorrect category – A slight mistake in writing “C” instead of “A” can lead to less sales and marketing attention being given to the respective outlet. Generally the master retail planning is supplied to the marketing team and vendors for branding purposes. This leads to incorrect marketing and sales efforts being made. “A” category outlets have the maximum sales and hence also expect more attention and respect from the telecom organization. Rivals are always looking to satisfy their expectations by reward and recognition. “A” category outlets have the bargaining power of customers as per Porter’s Five Forces Model. Hence it is important to make consistent and appropriate efforts toward ensuring their support in the channel.
  3. Inconsistent representation – People use different fonts and conventions to represent data. This leads to a lot of time wastage in making it uniform while making a consolidated list.
  4. Multiple versions – Many times during the course of review of the lists, amendments are made at every level. The sales representative may amend his list. The person at the backend consolidating the list will again have to make changes and create another version. This leads to a lot of rework and wastage of time and resources.
  5. Duplicate entries – Often more than one person may visit the same outlet leading to duplicates in the list as well as unnecessary efforts.


To-be Process of Retail Mapping

Each sales representative would have a hand-held device that is GPS-enabled. He would visit the shop, gather the data and feed them into the mobile enterprise application running on the hand-held device. This information would flow to a server in near real-time and update the central database. Additionally, the latitude and longitude of the outlet would also be recorded and updated. The server would record information from all the sale representatives and collate that information into a single master list.  Figure 7 below is a representation of this process.

Figure 7: To-be process diagram of retail mapping
 
This process will eliminate the issues present in the as-is process of retail mapping. Additionally, there are many other advantages to using this process and they are elaborated further in the next section.

Advantages of To-be Process Utilizing IT

Better Strategy Formulation

Since sales are all about handling the geographical territory, it makes great sense to map the parameters (refer to Figure 8). This can give vital inputs in formulating an efficacious strategy.


Figure 8:
Detecting the high potential sales areas – example scenario (Part of Bangalore City, India, Map taken from Google Maps –  ATL = Above the Line)

HYPOTHETICAL SCENARIO

Consider a hypothetical map and assume the plotting of retail outlets with recharge sales > Rs. 5000/- from 25th Aug 2011 until 3rd Sep 2011. The clutter in the encircled region shows many cellular phone recharges happening in that area during this period. Further investigation reveals a majority Muslim community in that region. The company can offer special “Full Talk Time” promotions for Rs. 786/- to generate maximum sales from that area during the festival period of Eid the following year (refer to Figure 9).


Figure 9: Detecting the timing and location of selling a product – example scenario (Part of Bangalore City, India, Map taken from Google Maps)

Better targeting of low performance areas

The zonal manager often deals with a large area with many sales reps reporting to him. It is not feasible for him to cover the entire territory during his visits. He needs to identify the areas which require his attention and target them during his visit.

HYPOTHETICAL SCENARIO

Consider a hypothetical map showing the initial “A” category outlets with last month’s sales being less than 200 units (refer to Figure 10), indicating that they have not made sales commensurate to “A” category. The zonal manager can visit these outlets and areas to understand the causes and take corrective action.

Figure 10: Detecting under-performing areas – example scenario  (Part of Bangalore City, India, Map taken from Google Maps)

Summary: Elimination of Noise Present in As-is Process of Retail Mapping

Usage of information and location technology eliminates the noise generated during the as-is process and reveals the following conclusions:

  1. The activities of manually generating the electronic form of the list by sales representatives and also manually collating the list by a backend person are eliminated in the to-be process. Hence noise, such as incorrect data entry, incorrect outlet names and categories, is not present.
  2. Multiple versioning can be taken care of by the server. Whenever there is an update made regarding any outlet, it flows to the server and a new version can be created. The versions can also be tracked and controlled by the server.
  3. The effort is drastically reduced as two steps are eliminated. The sales force can concentrate on other priority activities like channel management and feedback from market.
  4. Wasteful expenditure in creating incorrect branding elements is eliminated.
  5. The real-time capture and update of store performance data can help to effectively tune the sales and marketing strategy.

In part-two of this article, we’ll discuss the scenarios that demonstrate the power of retail mapping for strategic, rather than tactical, site selection and decision making.


Published Thursday, May 10th, 2012

Written by Abhishek Bhardwaj


Published in

Location Intelligence


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