Downturn is time to invest in location data
Working with the right data can save occupiers money committing to leases in the wrong markets while trying to grab market share during a recession, writes Geoff Michener.
Having barely recovered from the financial fallout of Covid-19, companies now face the dizzying prospect of another economic downturn. Many will be tempted to tighten their belts. This has been the go-to playbook for recessions such as the one experienced in the wake of the coronavirus pandemic: as demand drops, so do budgets for personnel, technology, and marketing.
However, in the years since the pandemic began, many have realised the benefits of maintaining—and even increasing—investment during periods of economic decline. P&G, for instance, has upped its advertising spend in recent down cycles, which has allowed it to boost short-term sales, build long-term brand equity, and stay competitive.
Following P&G’s example, brands should approach the coming downturn by doubling down on investment where it counts. One such area is data intelligence. Let’s take a closer look at why cutting costs on data intelligence doesn’t actually save money, then at how investing in data insights can boost resilience.
Why cutting data costs doesn’t actually save money
Cost-cutting measures that reduce spend on data sourcing, architecture, governance, and consumption can backfire. Take data sourcing, for example. Given the abundance of data available today, a company might think to use free datasets to fuel strategic and operational insights. This choice could seem obvious, as third-party data procurement often represents a significant commitment.
Yet, even during periods of economic stability, this route can be costly. Engineering teams from every industry already waste precious time and money checking data quality and fixing incomplete or inconsistent datasets. According to one report, for instance, data engineers spend almost half of their time firefighting bad data. And that’s to say nothing of the resources required to remedy decisions taken based on inaccurate datasets.
This, coupled with the fact that open-source data often comes with quality issues (like duplication or missing information), makes cutting corners with data sourcing a dangerous gamble—especially with another downturn on the horizon.
How investing in data-driven intelligence boosts resilience
There are ways to be smart about data spend without jeopardising growth. By increasing their investment in data-driven intelligence, like P&G did with advertising during the Covid-enforced downturn of 2020, companies of all kinds stand to benefit.
To illustrate this, let’s think about one of the cornerstones of digital transformation: location data. Instead of trying to cut corners with free data, for example, businesses can leverage accurate datasets to streamline advertising, site selection, and logistics. This can lead to critical savings and revenue that will shore up growth during the coming downturn.
With a combination of Points of Interest, demographic, and mobility datasets, organisations can personalise their marketing efforts. Assuming that their data is responsibly sourced and accurate, they can tailor out-of-home advertising to customer transportation or spending habits. Whether they adopt a data-smart strategy that centres mobile marketing, geotargeting, or geofencing, companies can reach prospective customers more efficiently, maximising the value of marketing spend.
For brick-and-mortar businesses, investing in location intelligence pays off for site selection. For example, a quick service restaurant looking to expand during the 2023 recession needs to be smart about where to open any new locations. To put their best foot forward, they can secure accurate location data to reveal insights about a prospective area’s weather, foot traffic, dwell times, competitors, or complementary points of interest. Here, investment might save money on leases or construction in a region where market share would be difficult to capture—or help land a location that drives profits in 2023.
Manufacturers can use this same intelligence to reduce logistics costs. Geospatial insights can help these companies make smart decisions about site selection by choosing locations in close proximity to distribution and shipping hubs or urban areas from which they can source a workforce. Investing in location intelligence upfront also allows these organisations to track how the competition is responding to the downturn and stay ahead of shifts in demand.
In all of these cases, accurate location intelligence also frees engineers from wasting time and money fixing flawed datasets. This permits them to dedicate more energy to forward thinking and to developing IT solutions for whatever issues their company might face during the recession.
When thinking about investment in data-driven intelligence, CFOs across the board would do well to heed the words of P&G’s COO and CEO-elect, Jon Moeller: “The best response to what we are challenged with today is to push forward, not to pull back.”
- Geoff Michener is CEO and co-founder of dataplor
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