Spring, 1996

KEEPING PACE WITH CUSTOMERS USING GEOGRAPHIC INFORMATION SYSTEMS

 

WHAT ARE GEOGRAPHIC INFORMATION SYSTEMS?

Nothing changes faster these days than customer shopping preferences, except maybe the computer technology we use to analyze these same customers. As retail shopping habits and patterns quickly fluctuate, people in the retail and shopping center industry struggle with ways to quickly and efficiently assess market changes. One of the analytical tools that has become more common in this industry has been GIS, or Geographic Information Systems.

 

So what exactly is a Geographic Information System? GIS can be defined in a variety of ways. For our purposes here, GIS will refer to any combination of computer hardware and software which is used for spatial analysis. GIS applications may range from a simple atlas program on a single user PC to a complex integration of spreadsheet, database, and GIS software operated on a network which may serve several dozen users, or more. The key factor in defining a Geographic Information System is that it manipulates data on a spatial level, and does so via a digital format, or in other words, through a computer.

 

While Geographic Information Systems may include a wide range of factors, GIS software refers to computer programs or packages specifically designed for the incorporation of boundary files (e.g. census tracts or zip codes), the incorporation of associated data (e.g. demographic variables), and the ability to do spatial analysis, either simple mapping or complex analysis. For example, Atlas*GIS (Strategic Mapping, Inc.) and MapInfo (MapInfo Corporation) are two more commonly used GIS software packages.

 

GROWTH

Several factors have promoted the growth of GIS in the shopping center industry. Advances in computer hardware and software, along with affordable prices, have made GIS applications available to a wide range of users. The technology that once limited GIS use to public agencies operating on large mainframe computers has been replaced by the proliferation of desktop GIS packages. GIS software has been made easier to use and competition in the industry, among such companies as Strategic Mapping Inc., MapInfo, ESRI, and Tactician, has encouraged lower prices. While you can still spend several thousands or tens of thousands of dollars on a system, you can acquire a basic GIS package for around $1,000.

 

APPLICATIONS

GIS systems can be used for a variety of analyses. In the shopping center industry, GIS can be used to evaluate market demographics, assess customer and competitive locations, define trade areas, and a assist in a variety of other market issues. Applications are largely limited to a user’s imagination. While there are many applications, there are also many levels of analysis when using a GIS. GIS analysis can be categorized into three areas: basic mapping and report generation, low-level spatial analysis, and high-level analysis and customization.

 

Basic mapping and report generation is probably the most common use of GIS software. GIS can represent a variety of data spatially. You can map demographic factors like income, and show the locations of stores and customers on the same map. Visual representation can be a much more powerful tool than simply looking at a spreadsheet, or even a graph. In addition to the mapping, many GIS software packages also come with demographic data that can be produced through report functions within the software.

 

While basic mapping can provide many answers, GIS can also provide some more advanced analytical tools. GIS software provides many functions/commands that assist in defining trade areas, aggregating sales data, calculating distances, and estimating markets shares, to name a few. The level of functionality will depend on the software itself. Several of the GIS software packages available contain similar functionality, with variations in terminology, commands, and procedures. However, there are packages that severely limit analytical procedures while others provide a wealth and depth of functionality, often at a higher cost and steeper learning curve.

 

The greatest potential with GIS software is the ability to develop and perform highly complex spatial analyses. This may include developing and integrating a sales projection model within a GIS package. While GIS software often provides the basic functionality to make such analysis possible, it is likely that a high-end analytical procedure would require customization of the basic GIS module. Most GIS software does allow for customization of their basic modules, either through their own programming language or a common language like C++ or Visual Basic. Customization can also automate repetitive functions and provide user-defined interfaces.

 

USE

GIS is indeed a powerful analytical tool, be it on a basic or complex level. However, it is important that users recognize that a GIS is simply that, an analytical tool, not a black box with answers. Behind every good GIS analysis is a qualified and well-trained user. For example, while a high-end GIS package may allow for integration of a sales projection model, behind that software and model is the knowledge and experience of the developer. While GIS has many benefits, users must be aware of the problems that can arise, e.g. data inconsistency and erroneous spatial definitions. Knowing the limitations will help in providing results that are meaningful and accurate.

 

Used properly, a Geographic Information System can be an effective tool for analysis. In today’s competitive and rapidly changing retail environment, quick and efficient analyses are no longer simply helpful, but required. Retailers and shopping center developers and management need to know who their customers are, where they are, and how to optimize their potential. A well-used and maintained Geographic Information System can help to do just that.

 

 

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