4.1 Competition, Trade Areas, and Sites Characteristics

Competition

In striving to gain a market dominance or preference, businesses create advantages for their organization and consumers. The process drives competition and innovation to meet customer needs; often improving products or services beyond the initial designs of a company's plan. Companies analyze their market and improve strategies to gain advantages or disadvantage competitors. Interestingly enough, competition can be defined as seeking to gain or win something and contending for an achievement. Competition appears in multiple forms or environments:

1. A business Competitor, such as a corporation, firm, or commercial organization.
2. Competition between entitites, look at the pharmaceutical company direct-to-consumer (TV and Digital) advertising, or
3. Competitive environment, a market sector

Buyers, when purchasing goods or services, seek a simpler, more customized experience to select products and services that meet their particular needs. Many buyers may have exactly the same needs; but it's their choice to select where they shop, who they buy from, and which product(s) they select. A business designs products to meet needs and preferences, analyzes consumer behaviors to determine where to attract customers, and performs extensive business analysis to organize the retail experience.

Relating back to the principles of commerce, there are strategies to leveraging competitive factors in business in order to achieve and advantage:

1. Business optimization and improving an organization to be the most attractive for customers to conduct their transactions
2. Customer experience, to enjoy shopping or encounter the least pain to find the product one's seeking
3. Financial improvements of decreased costs, increased reach to high potential customers, decreased ineffective customer leads, increased sales, or increased profit margins.

Competitive Location Data

Location analysis explores geospatial and business data to determine where to locate a business. Data is widely available and at times expensive. One must decide what is important about the geospatial and business data a company seeks; what level of detail, precision, and current information is needed. A business may use general marketplace information for strategic decisions or highly detailed to make a critical investment decision. Assumptions made in the early stages of business analysis are based on relevant information; and accurate geospatial information adds credibility to the stated assumptions.

Where - in what retail environment does a business sell products to its customers?

1. At a physical site, e,g, brick-and-mortar, Big Box, or retail store, or
2. Through e-Commerce, where products are shipped from the locations of business functions.

An online location can also be defined and optimized by selecting the best domain name for the business, launching online advertising campaigns, and employing search engine optimization (SEO) so consumers can find your business. SEO is a fundamental principle of online retail to attract as many potential buyers to a business website and e-Commerce applications.

To understand consumer behaviors and model their buying patterns, business location analysis also considers demographics, psychographics on consumer behavior, census, market information on channels and products, and geospatial data. Later lessons in the course introduce omni-channel marketing plans, use of technology and IoT to interact with customers, and integrated market research.

Companies develop tools and build databases for their Operations and Marketing professionals to view business functions in a similar format with the latest actionable data. Analytical tools include dashboards, ad-hoc analytics, extensive modeling and customer graphs. The Data Environment spans:

1. Customers
2. Marketing
3. Channel
4. All Sales and Service Interactions

Geospatial analysts have a role in predictive and prescriptive analysis for a business to identify the structure for their sales, product portfolio to meet customer needs and maximize profits, and decide between competing priorities facing the company in a competitive marketplace. Predictive analysis for location intelligence is based on modeling geospatial and business information to answer a business question. Other analysts in business departments, e.g. Marketing, Business Analytics, Operations, conduct business forecasting and strategic planning using similar or different data with more focus on quantitative results than geospatial relationships. One objective of this course is to expand the knowledge, modeling skills, and experience of geospatial data scientists to provide value across an organization's structure.

One could say, "businesses measure everything." Modern companies collect data on every transaction, each event in the manufacturing process, and consumer behaviors that may impact the products the company builds. Third-party data providers collect and analyze Big Data in enterprise and relational databases, preparing reports - or access to structured data - for businesses to purchase. This saves effort and, possibly, money for a business to gain the market and consumer data they specifically require to stay relevant.

Customer relationship management (CRM) is a business of itself with software, products, dashboards, interfaces for sales and marketing, and connections to marketing campaigns. CRM always has a location component; providing a linkage of business and geospatial data to produce location intelligence. A known customer who willingly or passively provides purchasing data assists a business in market studies. Consider the questions a business may ask to understand, quantify, or verify their market position compared to competitors. Third-party providers detail and summarize consumer behavior to relate:

• Which marketing message a customer viewed and the products they recently purchased,
• How many competitor's products the customer purchased and whether they bought from this business,
• Where the customer purchased different items, the volume and frequency of shopping, how many items/sale at various store locations,
• Through demographics, what group is a customer most similar to?

Every encounter with a potential customer costs a business money; whether that is through marketing, paying employees for extended hours, answering detailed customer questions, providing live customer-service, or reorganizing retail spaces to address consumer changing preferences. A current CRM provides the business detailed information about customer behaviors for market and location intelligence analysis. To understand the value of using their own customer's information, a business must only look at the wasted dollars spent on direct mail advertising campaigns that never attract a new customer or digital ads on Social Media platforms where users click "Skip Ad" and rarely access the company's product website.

A valid customer lead, pre-vetted contact information, or request for contact from a potential customer provides a company advantages over their competitors. The challenge is to recognize these leads, respond to customers, and provide the products they need or desire.

Trade Areas

For a community, a trade area is an economic zone with generalized or defined geographic boundaries. This is a region where commercial organizations conduct business, where stores are sited for customers to purchase goods, business entitities lease or own space to engage with clients and perform services, or buildings are erected to offer space to attract commerce. A trade area may be determined by the farthest distance a consumer is willing to travel to purchase goods they need; communities often designate trade areas in a convenient location for citizens to purchase goods or services (optimizing time, effort, and value).

Two common methods of defining and mapping trade areas examine radial distance-based concentric rings and travel time-based irregular shaped polygons. The method for analyzing trade areas often includes existing customers, competitors by locations and products, and the geographic distribution of potential customers who would travel to the shop or receive delivered goods in the trade area (Horan, 2022, pp.72-75).

Murphy (2018, p.36) describes a geographer's approach to spatial arrangements:

They seek to identify and explain the significance of spatial patterns. They explore what variations across space tell us about the forces shaping biophysical and human processes. They investigate the nature and meaning of interconnections across space and scale. And they look critically at the spatial ideas and frameworks humans use to understand, navigate, and seek to change the world around them.

Site Characteristics

Buckner relates how site characteristics describe the qualities of a location rather than quantitative measures. While there is amazing competition between retailers over the "best" anchor position in a shopping mall, human factors significantly impact the potential sales of a business location. Detailed market studies consider all factors to include visibility for consumers, parking, accessibility to shop for products; and most importantly, assess the context and relation of characteristics to the community (Buckner, pp.70-73).

We find value in examining variations from place to place. Murphy discusses the interconnections across space and scale for readers to understand that a site, a store, or an event exists in relation to other places or factors. Studying the attributes of one individual place reveals a response or adaptation from the characteristics of another, proximal space. Communities and economies depend on trade, customers, competition, and development. Question how a trade area expanded in an area of the city, why certain shopping areas are busier or more profitable than others, and where consumers may prefer to shop in the future. Thinking critically of geography, technology, mobility, and human behavior, Murphy writes:

Another revolution in mobility and connectivity is looming - driven not by a single transformative invention but by a suite of technological innovations and social-environmental concerns that are likely to have profound consequences in the years ahead: driverless cars, electric vehicles of various sorts, ride-sharing, super-high-speed trains, and an increasingly pervasive internet. Collectively, these will influence how billions of people experience and comprehend the world around them.