Eason Lin

Business Analyst

January 28, 2016

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Mobile payment: from data collection to trade zone analysis

KFC, McDonald's to accept Alipay in China

KFC alipay

KFC China fast food restaurants accepted Alipay mobile payments since July 2015. McDonald’s China also adapted Alipay in September 2015. Consumers now can use unique Alipay QR code in their smartphones to pay for the orders, which transactions will take only two seconds or less. It will be more convenient and efficient for both customers and cashiers. All KFC restaurants in the country only accepted cash payments in the past 27 years. Though Alipay simplifies the payment process, yet the benefit of creating consumer behavior database has been the main reason to accelerate the cooperation of these two industry giants.

For retailers in food and beverage or FMCG industry, knowing consumer behavior and target customer segments for different trade zones is as important as improving product and service quality. Classify customers into different groups in terms of different needs and characteristics to optimize its products and marketing mix for store performance improvement.

Usually, brand owners could pull out consumer behavior data from CRM database. Yet it’s hard to attract people to sign up for the membership program without big incentives such as discounts or exclusive deals. Now collecting consumer data through mobile payment makes it easier. Using big data technology to build customer profiles, to forecast the spending potential from purchase orders. Specify demographics like age, gender and behaviors like product-purchase interests in local areas. Identify high potential customers regarding different trade zones to enhance sales promotion and market strategy planning for better store performance. Different target segments in different trade zones could also be a good reference for the new store location selection, sales forecast and lease negotiations.

Mobile payment not only provides superior customer shopping experience, but supports the demands of O2O commerce. Retailers could also use big data analysis to find out who are the most desirable customers, and then create personalized offers which they are likely to buy.

 

Featured image credit : pintu360.com

 

 

Sherry Shi

Project Specialist

March 2, 2015

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General Schema of Retail Site Location Assessment_part 2

Site Analysis at the Micro-Scale

site accessment

Fig.  Classification of assessment location explanatory variables

 

Previously we have talked about what elements to look at when evaluating a retail site in a macro perspective.  (Click to read more) Now we will formulate a location strategy of prospective sites into micro analysis.

 Micro Problem

Micro problem is the other main component of assessing a site location. Retailers have always understood location as paramount, but understanding all aspects of store performance, site potential in addition to consumer behavior demands a great amount of information. This involves an understanding of the geographical, demographic, socioeconomic, and competition data in the area. The figure above suggests a possible classification of assessment location explanatory variables. In opposition to trade zone evaluation (demand and competition), the site and store variables intend to evaluate internal factors or the new store offerings.

The retail sector is going through a restructuring phase, driven by factors such as increasing consumer mobility, increasing electronic commerce, changing household size, concentration of market power, market saturation, and changes in planning legislation. These changes require retail groups to invest strongly in stores of smaller dimension while focusing on a strategy that prioritizes proximity to the target customer and quality of goods and services. This investment has a long – run as well as smaller economies of scale, which forces careful decision-making.

 

 Also worth reading:
General Schema of Retail Site Location Assessment_part 1 (Decision-Making In A Macro Perspective)

Sherry Shi

Project Specialist

February 5, 2015

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General Schema of Retail Site Location Assessment_part 1

Decision-Making In A Macro Perspective

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Crucial aspects for the success of smaller retail stores include location, dimension, services offered, and the targeting of specific market segments. Here we consider a phased decision methodology where we separate decisions about choosing geographic regions from choosing store locations within the region.

Macro Problem

In the first phase, define the Macro Problem based on: strategic policy for a network, zone, or region where new stores will be installed; the number of units to be built; along with implementation timing.

In the second phase, make the final store-site choice by narrowing down a selection of available locations, usually with the help of real estate agencies. For this decision level, the number of commercial and academically published models suggests that researchers feel a need for rational and formal use of information.

The third decision level, concerning store and services design is the level most linked to the concept of service quality and customer satisfaction. Focus on models that take into account store location (level 2) and the physical design of the facility. Furthermore, some application can be extended in the store characteristics and services definition (level 3).

Tab.  Decision levels involved in the expansion strategy of a retail network

table

 

Also worth reading:
General Schema of Retail Site Location Assessment_part 2 (Site Analysis at the Micro-Scale)

Sam Ho

SVP, Data Intelligence

September 11, 2014

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Doing Business In Emerging Markets – Part 5 – Accessing Intelligence

A video interview series featuring Sam Ho, SVP of Data Intelligence at getchee.

Screen Shot 2014-09-11 at 4.23.44 PM

In this video series, Sam Ho, SVP of Data Intelligence at getchee will discuss doing business in emerging markets. Sam will cover the risks vs rewards, the difference between emerging markets and new frontier markets, the pace of business, challenges with intellectual property rights and more. Subscribe now to receive the new updates each week.
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