Advanced Geospatial analytics A powerful tool for retailers to create value in Omni channel retail

–  Think Tank: McKinsey & Company

        Report summarized by : Bummary

Introduction

Sophisticated retailers are closely analyzing the interplay between offline and online customer decision journeys. Taking an omnichannel view of store performance allows the store to ‘get credit’ for all the sales in which it played a role, whether those sales happened online or offline. This approach is helping retailers get a better view of each store’s true economic performance and making better decisions about their omnichannel presence.

Stores aren’t going away anytime soon. McKinsey estimates show that 75 to 85 percent of all retail sales till 2025 will come from brick and mortar retail stores. However, stores tomorrow won’t be a place just to sell stuff. It will be experience centers to display products, a place for groups of friends to walk in and take selfies or act as fulfilment centers to deliver products. The probability of a store having weak sales in numbers but being a key driver to generate sales elsewhere in the omnichannel route is a big possibility in the future.

Data analytics and related tools are now capable enough to help figure out which stores play a positive effect on product sales through other channels and which ones play the role of cannibalization. McKinsey research shows that a stores Halo effects could lead to 20 to 40 percent total economic value addition for retailers.

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