The way people pay has changed enormously, but for businesses the more interesting story isn’t whether a customer uses cash, card or a digital wallet. It’s the data created by the transaction itself.
For businesses with access to first-party sales and customer data, transactions can reveal what people buy, how often they return, how much they spend and whether behaviour differs between products, locations or customer groups. Add geography to that information and another dimension emerges, where are your customers, and how does buying behaviour vary between different markets?
Understand what customers actually buy
Customer profiles can tell you a great deal about the characteristics of a potential audience. Transaction data adds something different: evidence of actual purchasing behaviour. Depending on the data available, businesses can analyse measures such as purchase frequency, average transaction value, product combinations and repeat purchasing.
Those patterns can be more useful when viewed across groups rather than concentrating on individual transactions. For example, customers around one location might purchase more frequently than those around another. Certain products could perform particularly strongly within particular markets. Or some customer groups may generate considerably greater long-term value.
The next question is why.
Compare customer behaviour between locations
A national sales figure can conceal substantial local differences. By combining transaction data with geography, it allows businesses to compare customer behaviour between stores, territories, catchments or other defined areas.
One location may have plenty of customers but relatively low average spend. Another could serve fewer customers who purchase more frequently. Elsewhere, a particular product category might significantly outperform the wider estate. Location doesn’t necessarily explain those differences, but it shows where they are happening.
Other evidence can then help investigate them. Demographics, consumer characteristics, competition, accessibility and footfall may all provide useful context.
See where your most valuable customer groups are concentrated
Not every customer contributes the same value to a business.
Transaction data can help identify customer groups with higher purchase frequency, greater average spend or stronger repeat behaviour. Mapping those customers can then reveal whether they are concentrated in particular geographic areas.
That can be particularly useful when considered alongside demographic and consumer data. Rather than assuming that everyone with a particular characteristic will behave in the same way, businesses can start with their own evidence – what characteristics and locations are associated with the customer groups already buying from us?
Those patterns can then be used to investigate other areas containing similar potential audiences.
Identify gaps between potential and actual demand
One of the most useful comparisons is between the customers a business already has and the wider potential market. An area may contain a high concentration of people matching an existing customer profile but generate relatively few sales. Another may achieve particularly strong customer penetration despite having a smaller potential market.
That difference deserves investigation.
Perhaps brand awareness is lower. The area may be poorly served by the existing network. Competition could be stronger. Or accessibility and movement patterns may make it harder for potential customers to reach a location. Transaction data tells you what is happening. Location Intelligence can help provide the context needed to explore why.
Learn from differences across the estate
For businesses with multiple locations, their own estate provides a valuable source of evidence. Why do customers around one site spend more? Why does another attract more repeat business? Why does a particular product perform unusually well in one market but not elsewhere?
Sometimes the answer will be operational. Sometimes it will relate to the proposition itself. But differences in catchment, customer profile, competition and local market characteristics may also contribute.
Comparing locations helps businesses move beyond simply ranking sites by sales and begin understanding the markets behind those results.
Turn transaction data into customer intelligence
Transaction data becomes considerably more valuable when it is connected to other information. Sales tell you give you insights into what customers are buying. Customer data can tell you who your customers are. Location adds where they are. Demographic, consumer, competitor and movement data can then provide further context around the markets in which those transactions are taking place.
Periscope® brings these different sources of information together geographically, helping businesses understand customer patterns, compare markets and identify areas worth investigating more closely.
The objective isn’t to track individual customers or predict what a particular person will buy next. It’s to use aggregated patterns to make better decisions about customers, markets and locations.
Discover how Periscope® can help you turn customer and transaction data into clearer market insight.
