Oct 25, 2018

Creating a Geosocial Strategy for a Retailer

Geosocial data is quickly becoming a new criteria for retailers and restaurants when selecting new locations (case study). Approaches to using this data varies. We’ve already covered how it can improve sales projections for new locations (Payless Store Closings). This post describes the steps that can be taken for anyone (retailers, property owners, operators, brokers, and third parties) to create a geosocial data strategy for any brick & mortar chain. To illustrate this, we’ll create a geosocial strategy for Lululemon.

 

Geosocial and Yoga Pants

Lululemon prides itself on a strong brand that resonates with the personality of their customers. However, they are not currently using data on human personalities (geosocial data) in their site selection process.

 

Typically, Lululemon would have access to demographic data, traffic data, survey-based data, and online orders to evaluate these markets. Their geosocial strategy will allow them to measure and match consumers’ personalities and interests in these markets to their brand.

 

Lulu has come a long ways since they described (source) their ideal customer as “a 32 year-old professional single woman named Ocean who makes $100,000 a year.” Their diverse product offering has cultivated a diverse customer base. What personalities should Lululemon target when evaluating new locations?

 

The first step is to analyze the existing network of Lululemon locations. Spatial.ai maintains an advanced database of points of interest in the United States, including all Lululemon locations. Upon analyzing geosocial activity in the trade areas near each one, our algorithms selected the following segments as high performing:

 

Trendy

Hippie

Exclusive

Feminine

Health-focused

Girl Time

Outdoor Challenges

Earthy Granola Hip

Fresh Looks

 

(For a list of all segments, visit our Taxonomy)

 

Lululemon stores typically score highly for these segments, most of them intuitively resonate with their brand positioning. Their geosocial strategy will aim to match their existing strategy at identifying markets with high levels of these behaviors. It will also help them optimize their existing stores.

 

The following segments were identified as growth opportunities:

Wellness

Stylish

Yuppie Moms

Athletic Fashionista/o

 

How can the company known for inventing Athleisure justify locating their stores in markets with low levels of organic Athletic Fashionista behavior? The typical Lululemon location only scores in the 41st percentile for Athletic Fashionista behavior.

 

Lululemon’s geosocial strategy will aim to surpass their existing strategy at identifying markets with high levels of these behaviors.

 

Lululemon Geosocial Strategy

lulu_visual For a complete guide on geosocial marketing, read our case study.

Strategy in Action 

Now that we have identified segments to focus on, let’s use them to select a new market.

 

With over 260 U.S. locations, Lululemon is a strong brand poised to thrive in an evolving retail climate (source). Much of this growth will come from ecommerce and international expansion, but our team identified mid-size markets in the U.S. that present opportunities for further domestic penetration. The following markets have no existing Lululemon stores:

 

Fort Wayne, IN (greater metro area population over 600,000)

Rapid City, SD (greater metro area population over 114,000 with 30%+ pop. growth since 2000 source)

Columbia, MO (greater metro area population over 220,000)

Peoria, IL (greater metro area population over 380,000)

Montgomery, AL (greater metro area population over 370,000)

 

Here are the average scores for Lululemon and 5 malls in the proposed locations across these segments:

 

Lulu average --------------- 54th Percentile

Columbia Mall --------------- 69th percentile

Eastdale Mall --------------- 49th percentile

Glenbrook Square --------------- 57th percentile

Jefferson Pointe --------------- 68th percentile

Northwoods Mall --------------- 65th percentile

Rushmore Mall --------------- 45th percentile

 

Not only does Columbia Mall outscore the average Lululemon location by 15 percentiles, but it scores in the 87th percentile for Athletic Fashionista compared to Lululemon’s average of only the 41st percentile.

 

This is only part of the story. For a full analysis of how Lululemon scores across key social segments and how it compares to their proposed new location at Columbia Mall, download this sample report.

Download the Lululemon report

 

 

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