Customer Spotting Techniques in Retail

Customer spotting techniques include several methods by which the retailer attempts to “spot” customer origins on a map. By carefully observing me magnitude and arrangement of these origins the retailer can identify the dimensions of the trading area. Retailers normally define customer origins by home addresses, although customers place of employment are also important. Some of the more common customer spotting techniques include surveys of customers’ license plates, customer surveys, analysis of customer records and studies of customer activities.

  1. License Plate Surveys. By recording the license plate numbers of automobiles in the store’s parking area, retailers can obtain customer home addresses. Sampling normally includes the checking of licence plates at different times of the day, different days of the week and different weeks of the month to ensure a representative sample. The major advantage of this technique is it is relatively in expensive method. However, the advantages are; (1) It is not possible as to who drove? Was he a customer? (2) There is no revealing of information on the shopping behavior as  what they bought ? How much they bought ? Where they bought ? why they bought ? or not bought anything? (3) The number of purchases and purchasers in each car cannot be determined. Still it is alternative method as they cost least in terms of cost and time as they provide general information.
  2. Customer Surveys. Either a personal interview, mail questionnaire or telephone survey can be conducted to provide information on who lives or works in a given area and who either current or potential customers are. Actual customers can be surveyed on the premises by either personal interviews or take-home-back questionnaires. Good surveying techniques must be employed to ensure an un-biased, truly representative sample. Customer surveys can provide a significant amount of information regarding demographics and the shopping behavior. However customer surveys suffer from the limitations of cost, time and necessary skill needed to do the job efficiently and effectively.
  3. Customer Records. Retailers have several ways to obtain addresses of current customers as well as additional valuable information. Customer credit, service and delivery records contain good deal of information if developed and maintained properly. From their records, retailers can find customer addresses and places of unemployment, age brackets, family status telephone numbers and types and amounts of purchases. Though customer credit, service, and delivery records are a fast and inexpensive ways of obtaining information, they are biased because cash customers, who require no service or delivery, are omitted from the analysis.
  4. Customer Activities. Any method that seeks or requires customers to provide their names and addresses can help in identifying an existing or proposed trading area. Promotional activities such as contests and offers takes can be effective in obtaining names and addresses. Unfortunately, these tend to be biased toward the consumer who is willing to participate. Discount coupons that require the consumers to provide minimum information also have been used in identifying trading areas.

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