5 heat maps for understanding retail data

Stephen Curran by Stephen Curran on November 29, 2018
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Understanding retail sales data is a difficult and complicated task in the era of 'Big Data'. It's all too easy to get lost in reams of Excel spreadsheets and miss the big picture or the golden nugget you were looking for. Specialty roles and consulting firms have been born out of the need to understand the plight of large volume retail sales data. But we can make this simple. Here at eSpatial, we've helped many retail giants such as Gamestop and Burlington understand their retail data in the following 5 ways using heat maps:

1. The impact of location on retail sales performance

i) Demographics

If you had to choose one metric to base the performance or potential performance of a store it would be demographics. Are we located where our customers are? Maybe you were once, but is that still the case? Most major cities around the world are facing some sort of housing crisis, this tends to play havoc with shifting demographics. An easy way to find out if this is happening to your stores, is to take a heat map of sales from 5 years ago and sales today. Have stores in certain areas started to outperform others? This is a strong indication that your target market has moved.

Heat Map on Demographic Data for Retail Stores
ii) Encroachment

Striking a balance between establishing a presence in the city and preventing sales encroachment is a tough one. Famously, Starbucks takes the hit on sales encroachment to give the “Starbucks on every corner” feeling. But is there a smarter way to achieve the same feeling? A heat maps of sales either by store or customer locations will quickly give you the picture you need to find the optimum balance of presence and sales.

2. Loss prevention strategies

Loss prevention is not the most glamourous and exciting topic when it comes to retail sales, but it is a very necessary one. A popular use case for heat maps amongst our retail customers to use them for loss prevention analysis. A heat map of thefts by store gives a good overview of where there is a significant problem and where further investigation is needed.

3. Efficient area management

Some stores are underperforming and others are doing exceptionally well. The heat maps above give no obvious indication as to why. The time comes for face to face visits. A heat map will tell you which stores you should prioritise and where. Combine this with other mapping tools such as routing, and the area manager gains the maximum amount of time face to face with store managers that need more attention.

4. Knowing where to expand

A heat map of retail sales is a great way to find gaps in the market for further expansion. For example, you have two stores in the north east of a city that started doing really well. However, this is not a traditionally popular area for your store and there is poor coverage for the North East as you can see by the store locations. It's time for expansion. Another quick example, online retail sales are growing, you decide to map them and find out where. Through your heat map you discover that online sales are growing in areas that were traditionally small outskirt towns but have since become rapidly growing commuter towns. Time for a new store?

Heat Maps for Retail Expansion

5. Optimum locations for distribution centers

This is another very common use case among our retail customers. It's important to regularly evaluate the efficiency of your distribution center locations. With the significant and continuous growth of online sales, the selection of distribution centers is no longer just down to store proximity, but rather the best location for all your customer base. Added to that, stores that have closed and new stores opened and the need to map everything becomes very apparent when making these decisions.

Heat Map of Distribution Centers

Need to analyze and visualize data for your retail organization? Try out eSpatial heat maps with our 7 day free trial.

Stephen Curran Written by

Stephen Curran

Stephen Curran is a graduate of Carlow Institute of Technology. Through his natural curiosity and continual interactions with our customers, Stephen gained many insights into their needs and wants when it comes to geographic analysis and mapping software.

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