How human mobility data can drive better business decisions

It’s often difficult to tell what people will do next, but understanding human movement patterns throughout the world is crucial for creating a baseline for the pandemic’s consequences and forecasting the future. In the COVID-19 era, location data has demonstrated how mobility insights are directly connected with adjacent events like supply chain interruptions and inflation. What are the connections between these and what conclusions can organizations draw from them? What’s more, why do they matter?

How the pandemic changed movement patterns

A migration wave to the U.S. occurred due to the pandemic, the shift to remote employment, layoffs and lockdowns. The Joint Center for Housing Studies at Harvard discovered that an abnormally large number of people made permanent moves early in the pandemic and again at the end of 2020, indicating a 12-14% increase over previous years. Temporary relocations increased by 18% in 2020 compared to 2019.

By looking at human mobility data, we’re able to pinpoint where population growth has happened, as well as what changes in population income groups mean for impacted communities. Consumer flow, reaction to catastrophes and neighborhood changes are all events that can be captured using movement data, which has massive consequences for the health of businesses.

A confluence of issues

We can use location data to expose more than simply human movements. For example, location data may tell you not just whether individuals are visiting a specific store, but also when and for how long. Looking at this kind of data can help business owners figure out how supply chain disruptions are hurting their customers. Reduced dwell time, for example, could signal a scarcity of stock as customers are unable to locate what they want to buy.

Studying seasonal and hourly visitor patterns can also reveal whether customers are expecting to snag a previously unavailable item. Everyone remembers the days when grocery store lines snaked around the block searching for toilet paper.

Inflation has a significant impact on foot traffic and buying decisions as well. We were able to measure visitation to gas stations using location data in these days of soaring gas costs. In 2021, COVID-19 appeared to have a greater impact on total visitation than pricing factors. This year, we’re seeing pockets of significantly reduced visitation for poorer Southern states like Alabama and also for high-poverty cities like Minneapolis and Chicago. Changes in consumer behavior around buying gas will undoubtedly have a downstream effect on purchase of higher-priced items like cars and electronics. Location data can be used to forecast these changes long before they affect business bottom lines. 

My team’s research indicated that, despite lower foot traffic, consumers who do go to stores spend more (adjusted for inflation) than they did before the pandemic. The trend prior to COVID-19 was the inverse: more traffic with less spending, reflecting historically higher browsing activity. Customers at in-person retail outlets appear to be shopping with a specific purchase in mind these days. If there are no supply concerns, they also appear to be more likely to complete the purchase than in 2019.

This is supported by an examination of the latest Amazon shop closures. Amazon is shuttering subsidiaries such as Amazon Pop-Up and Amazon 4-Star, which aimed to let customers “try before they buy” by allowing them to come in, browse and see what caught their eye. Sadly, for Amazon, the pandemic seems to have put a damper on this venture. 

Using what you’ve learned

So, what’s the upshot of this information and what should it be used for? One of the most significant advantages of mobility data is that, unlike static census data, it provides businesses with real-time, up-to-date insight about brand locations, neighborhoods and movement trends. It’s also possible to conduct research on a global scale. In today’s fast-paced environment, dynamic data is essential. Companies and organizations that rely on static and out-of-date data are bound to make inaccurate assumptions and lose out financially. The pandemic, supply shortages and growing inflation have all heightened the possibility of these negative outcomes.

When mobility data is used efficiently, it allows for more efficient resource allocation, resulting in increased growth and profit. Examining how foot traffic changes or does not change with respect to inflation and supply chain serves as a projection model for improved resource allocation. For example, if you notice more business at your gas station on Wednesdays, it may be a good idea to schedule additional personnel on that day. Alternatively, you might be able to use what you know about stock shipments to reroute deliveries to stores where increased traffic is expected and more stocked shelves are needed.

Furthermore, for businesses that rely on face-to-face sales — such as motels, vehicle rental services and self-storage — foot traffic is strongly linked to revenue. Predicting income for significant brands is important not only for financial analysts and investors, but also for companies seeking inside information on the competition’s performance. Long-term strategy and focus may be informed by understanding why a competitor is functioning effectively. Long before quarterly statistics hit the headlines, businesses can predict changing patterns of consumer behavior.

Insights about how residents and non-locals use space in the neighborhood are also available, which helps to paint a picture of what they need. For example, if you know a location attracts many people from more than 30 miles away, it suggests an underserved area in the location they’re coming from. Inflation, in particular, has an influence. Companies can use location data to find out if consumers are seeking cheap products inaccessible in their immediate area; this helps with site selection for firms seeking expansion and receptive buyers.

Meeting changing consumer needs

Once you start diving into and analyzing the data, foot traffic and location intelligence may give you important insights. Foot traffic analysis indicates the impact of inflation and supply chain interruptions. The bottom line is that the pandemic, as well as the accompanying supply chain disruptions and inflation, have permanently altered movement patterns and consumer behavior. Brands use location data to monitor their internal performance, benchmark against competitors and discover new opportunities. All of these are critical elements for surviving in today’s changing consumer environment.

Elena Solodow is the manager of content and insights at Unacast.

Originally appeared on: TheSpuzz