By Elena Solodow, Unacast
Human behavior isn’t always predictable, but insights into how people move about the world are proving essential to establishing a ground truth of pandemic effects and forecasting for the future.
Location data in the era of COVID-19 has shown how movement insights can be directly correlated with ancillary events such as supply chain disruptions and inflation. How exactly do these connect, and what conclusions can be drawn? More importantly, why do they matter?
Movement Data During The Pandemic
The pandemic, the switch to remote work, and factors such as lay-offs and lockdowns ushered in a U.S. migration wave. Analysis of U.S. Postal Service change of address data by the Joint Center for Housing Studies at Harvard found that an unusually large number of people made permanent moves early in the pandemic, and again at the end of 2020, marking an increase of about 12-14% from prior years. Temporary moves also spiked in 2020, about 18% higher than in 2019.
We’ve been able to assess exactly where population growth has occurred, and more importantly, what changes in population income brackets mean for impacted neighborhoods. Movement data lets us capture on a grand scale consumer flow, reaction to catastrophic events, and also predict neighborhood changes with vast implications for business health.
COVID-19 And The Adjacent Supply Chain And Inflation Issues
It’s not just the migration of people we can illuminate with location data. It’s now evident that analysis of foot traffic can be correlated to supply chain disruptions and inflation impact.
For instance, location data can tell you not only if people are visiting a certain store location, but when and for how long. If you’re a business owner, examining this kind of data can give you more insight into how supply chain disruptions might be affecting patrons of your store. Decreased dwell time, for instance, could indicate a shortage of stock as consumers fail to find their target purchase.
Examining seasonal and hourly visitation trends also can reveal whether or not consumers are hoping to bag a previously out-of-stock item. Everyone will recall the days when grocery store lines were wrapped around the block as people sought to find much-prized toilet paper.
Inflation is also a huge factor for foot traffic and purchasing decisions. With location data, we’ve been able to assess visitation to gas stations in the reality of skyrocketing gas prices. In this instance, it appears COVID-19 risk impacts consumer gas usage more than price considerations, but visits to gas stations have indeed shown a downward trend since the pandemic’s onset.
Analysis conducted by Unacast found that though foot traffic was down, people who do go to stores are spending more (with inflation-adjusted figures) compared to the pre-pandemic period. The pre-Covid era showed the opposite trend: greater traffic with less spending, indicating historically higher browsing behavior. These days, it appears that customers at in-person retail locations shop with a purchase in mind. Barring supply issues, they also seem more likely to follow through with that purchase compared to 2019 figures.
An exploration of the recent Amazon store closures bears this out. Amazon is closing off-shoots like Amazon Pop-Up and Amazon 4-Star that were geared toward the "try before you buy" approach, meaning they wanted people to come in, stay awhile, and see what they liked. Unfortunately for Amazon, this just isn't the kind of focused consumer that exists anymore, especially when shoppers need to take Covid risks into account while indoors.
How To Apply This Data
So, what does all this mean? What should be done with this information? One of the major benefits of mobility data is that, in contrast to static census data, it gives businesses real-time, up-to-date intelligence into brand locations, neighborhoods, and overall migration trends. We also can perform analysis on a global scale. Dynamic data is necessary in today’s fast-paced world. Companies and organizations utilizing static and outdated information will inevitably make incorrect assumptions and see financial losses. The pandemic, supply shortages, and rising inflation make this likelihood starker than ever.
Mobility, when employed effectively, aids in more efficient resource allocation, which results in higher growth and cash flow. Looking at how foot traffic is or isn’t changing in relation to inflation and supply chain serves as a forecast model that better allocates resources such as staff. For instance, if you see that more people are coming to your gas station on Wednesdays, that might be an indication to increase staff on that day. Or, maybe you’re able to take what you know about stock shipments and re-route deliveries to stores where higher traffic is anticipated and filled shelves more necessary.
In addition, foot traffic is highly correlated to revenue for businesses reliant on face-to-face purchases, like car rental services, hotels, and self-storage. Predicting revenue for major brands is not only useful to financial analysts and investors, but it’s vital for businesses seeking inside knowledge on competitor outcomes. Understanding why a competitor is performing well can inform long-term strategy and focus. Businesses can even infer changing patterns of consumer behavior long before quarterly reports hit the news.
Neighborhood mobility insights are also available to describe how residents and non-locals utilize space, which informs a picture of their needs. For instance, if you know a location is drawing a majority of visitors from over 30 miles away, it indicates an underserved area in their location of origin. Inflation, especially, has an impact here. Location data can inform whether or not consumers are seeking budget products not available in their immediate area, for instance, which aids in site selection for brands seeking expansion and receptive markets.
Evolving With Data
Foot traffic and location intelligence can tell bigger stories once you start digging into and analyzing the data. Analysis of foot traffic reveals how inflation and supply chain disruptions are having an impact. The takeaway is that the pandemic and subsequent supply chain and inflation have caused permanent changes in migration patterns and consumer behavior. Using location data is an effective way for brands to assess their performance internally, benchmark against competitors, and find new opportunities. These are all vital aspects of survival in today’s evolving business landscape.
About The Author
Elena Solodow is Manager of Content and Insights at Unacast.