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Using GIS to Understand Retail Customers

Using GIS to Understand Retail Customers. Subir Bandyopadhyay Joe Ferrandino Professor of Marketing Assistant Professor of Criminal Justice Indiana University Northwest Indiana GIS Conference Indianapolis May 7-8, 2014. Introduction.

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Using GIS to Understand Retail Customers

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  1. Using GIS to Understand Retail Customers Subir Bandyopadhyay Joe Ferrandino Professor of Marketing Assistant Professor of Criminal Justice Indiana University Northwest Indiana GIS Conference Indianapolis May 7-8, 2014

  2. Introduction GIS maps have been used in marketing for several applications • Retail site location • Coupon optimization • Sentiment analysis • Billboard advertising • Real estate appraisal

  3. GIS and Economic Development • Cities and regions can identify suitable locations to attract investment from different industries • Combine national and commercially available databases with local proprietory databases to refine location analytics

  4. Integration of Data Sources • US Census Bureau (block group data) • Indiana Map (parcel data, interstate ramps) • City of Gary (existing business locations) • Business Analyst ® (Health Spending Index) • Gary Police Department (homicide and shooting event data) • INDOT (traffic counts) • These types of files are available, but many smaller firms or businesses may not technology or expertise to utilize them

  5. Supermarket Location Parameters A mid-sized supermarket chain would like to open a new outlet in Gary, Indiana. The chain typically uses the following location criteria: • It should be within 1 mile of an exit from an Interstate. • The site must sit on a road with an average 500/car per hour traffic volume • There should be no other competition within 0.5 miles from the proposed location • The average income should be $30 K or more in the area within 1 mile radius of the proposed location, • The population should be 5,000 or more in the area within 1 mile radius of the proposed location. • The annual shooting incidents should be 10 or less in the area within 1 mile radius of the proposed location.

  6. Step 1: All city parcels, streets and existing grocery store locations

  7. Step 2: Identification of all parcels within 1 mile of interstate ramps

  8. Step 2: Parcels within 1 mile of interstate

  9. Step 3: Identify roads with an average traffic volume of at least 500 cars/hour

  10. Step 3: Identify remaining parcels on roads with desired traffic volume

  11. Step 4: Create 0.5 Mile Competition Buffers

  12. Step 4: Identify remaining parcels that meet competition criteria

  13. Step 5: Exclude parcels with existing businesses

  14. Step 6: Remaining parcels after public safety and demographic criteria included

  15. Pharmacy Location Parameters A national drug store chain would like to open a new store in Gary, IN. The chain selects a new location if it satisfies the following criteria: • It should be on a state high road with traffic movement rate of 500 cars or more in a hour from 9am to 9 pm. • There should not be more than 1 drugstore within 1 mile radius area around the proposed location. • The annual shooting incidents should be 5 or less in the area within 1 mile radius of the proposed location. • The population should be 1,000 or more in the area within 1 mile radius of the proposed location. • The area should have a high senior population • The area should have a high health spending index score

  16. Step 1: All parcels, streets and existing pharmacies

  17. Step 2: Identification of roads with an average daily traffic volume of 500 cars/hour

  18. Step 2: Identify remaining parcels on roads/streets meeting traffic criteria

  19. Step 3: Buffer/Intersect utilization to eliminate parcels with more than 1 pharmacy within 1 mile

  20. Step 4: Eliminate remaining parcels with existing business

  21. Step 5: Remaining parcels after safety data (homicides and shootings) taken into account

  22. Step 6: Identification of potential location areas for market demographic analysis (senior population) within 1 mile

  23. Step 7: Comparative site location parameters for final decision making

  24. Implications for Business • More accurate location analytics by incorporating local databases (e.g., crime data, traffic data etc.) in the decision mix

  25. Implications for Local Government • Identify suitable locations for different businesses within the city as a prerequisite to attempts to attract business (proactive and data-driven economic development) • Help in decisions to develop areas for potential investments (creating attractive sites and understand why some areas are underdeveloped) • Make professional presentation to potential investors (make data available, in GIS formats, for any potential business owner or entrepreneur)

  26. Concluding Comments • Regional and City administrations have limited human resources to carry out location analytics outlined here • Potential for active collaboration between universities and cities in business location analytics • Similar collaboration already happens in the field of crime analysis in Northwest Indiana

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