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Location Analytics: A case study to identify specific customer segment in an area

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Pressto – Spain originated la tintorería & lavandería servicios (Dry cleaning & laundry) successfully marked its entry in India in 2008 and now servicing to more than 50,000 satisfied customers across Mumbai & Delhi. Pressto has an aggressive plan to increase penetration in the above two cities in coming months in addition to growing in newer cities in India. The client wants to assess the business potential for existing and potential stores to set an internal business target. Another objective is to identify a concentration of specific customer segment in an area to conduct focus marketing.

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Methodology

Quantta analyses customer segment and catchment area for each store. Socioeconomic profile of each segment is analysed on multiple dimensions like gender, age, income, etc. along with customer buying pattern. The customer profile for Pressto can be defined as all the households having the annual income of Rs 30 lacs and above per annum. There is no gender preference as the stores receive an equal number of garments from both the genders. It has been observed that people living within 1 km radius from the store are the most frequented customers. People living between 1 and 3 km visit the stores infrequently. Following steps are performed to determine business potential:

  • 3 km radius around a store is considered as a catchment area.
  • The entire area is divided into 1km × 1km grids to determine business potential at a micro level.
  • High-resolution satellite image processing technique is utilized to segment buildings into different categories like commercial vs residential, permanent vs non-permanent structures, open space vs inhabited area, etc.
  • Count total structures under each category
  • Estimated total number of household and total number of target household (profile similar to existing customer segment of Pressto) in each of this 1km × 1km grid
  • Validation of data using other external resources
  • Segment target household into multiple categories based on estimated business volume per customer
  • Business potential is further refined using a distance of household from the store.
  • Competition is mapped for each grid
  • Market share is projected using competition index

Benefits

  • Determine business potential for each store, which is used to set business targets
  • Micro level analysis helps the client to determine market share at each grid (1km × 1km).
  • GIS heat map helps the client to visualize each grid based on business potential and existing market share. This helps the client to formulate detail marketing plan by micro area
  • Estimated benefit is 20% additional revenue and 10% reduction in marketing cost

Sample Report

The report shows heat map by grid in terms of attractiveness. Darker the colour is higher the attractiveness of the grid and vice versa. It helps the client to identify the attractive areas around the existing store. Mapping competitors and other important sales generators (establishments those help increasing sales directly / indirectly) provides additional information about important POIs (point of interest) for marketing campaigns in and around the area.

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Ritesh Bawri
Ritesh is an entrepreneur with rich experience in setting up and running companies in India and the US over the past twenty years. He is currently the Founder of Quantta Analytics and Diduce Technologies, which are companies focused on analytics and innovation in search respectively. He was previously the Founder and Managing Director of Calcom Cement Plc. and also started Cijen, a California based Analytics Company. His passion in being a serial entrepreneur stems from the desire to ideate and to create and to build great teams that can take an idea from scratch and translate it into something that customer’s value. Ritesh is the serving President of the University of Michigan India Alumni Association in India. He serves on the Alumni Board of Governors of the Ross School of Business at the University of Michigan. He serves on the Board of Ujjivan, a company focused on micro-finance. He is an MBA from the University of Michigan (2001), Ann Arbor and a Bachelor’s in Economics from St. Xavier’s College, Mumbai.

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