Gaining business insights from transactionality data
Written by Geoblink ·
Consumer’s spending analytics directly link to consumer spending habits. This powerful indicator helps organisations and every business that is planning for an expansion in a novel location to understand:
- The total number of transactions in a specific area
- The average ticket spent by the target audience
- The sectors on which they discard their disposable income
- The time of the year/month/week/day, when the transactions hit the roof
- The foreign consumers who conduct transactions in a specific location
- Origin of the customers (from which postal code)
This undoubtedly could be a stand-out indicator for businesses to get the bottom of their target audience consumption habits, formulate better business, marketing, merchandising, and communication strategies with greater agility and lucidity and forecast sales in an area.
With that in context, let us analyse the transactionality data in Madrid city.
The spending composition in one of Madrid city’s postal codes
Spain has an average disposable income of USD 22,007 a year. This however is less than the OECD average (USD 29,016). In any economy, good education and skills are requisites for landing on a job. That said, in terms of employment in Spain, 57% of people aged 16 to 64 have paid job. Though, it appears appreciable, the figure, much like the disposable income, falls below the OECD average (76%).
Delving into the postal code 28001, Madrid, we are going to dig out the possible transaction details of the population.
28001 is a postal code in Madrid’s municipality. One of Madrid‘s district Salamanca falls within this zip code.
Total no.of transactions: (October 2016 to September 2017)
The overall transactions accumulate to 3,026,332 with an average ticket of 67€. These two metrics stand first in the line followed by other data. They help organisations visualise the spending power and the maximum money the consumers are willing to spend on commodities and services.
Age and gender distribution
The next step is deciphering the spending capabilities in accordance with gender and age of the target population. The postal code in our analysis has expenditures flowing out from both men and women. But on a deeper note, women of all age brackets (<=24, 25-34, 35-54, 55-64 and >=65) spend substantially more than what the men from similar age brackets do. For example, women aged 25-34 contribute to 15%, (15,702 tickets) of the total transactions, while the men spend 7.4% (7,749 tickets) of the same.
The population of this specific area direct their income to almost all sectors ranging from Fashion to Auto Services. Among the sectors, Fashion receives maximum inflows of 1,430,961 tickets (47.3% of the total transactions), followed by Bars & Restaurants (24.7%) and Wellness/Beauty (8.9%). While the bottom positions are occupied by sectors such as Home (1,2%), sports & toys (0.6%) and auto services (0.1%). Thus; fashion, restaurants and wellness are the top 3 prominent players in the postal code 28001.
Would you like to know the top 5 UK cities with high disposable income? Read our latest blog post:
Do we have any foreign consumers?
Yes! The total foreign expenditures account for 15.7% when the national expenditure stands at 84.3%. The application reveals players from countries such as Mexico, France, Italy, The United Kingdom, The United States of America, China and also indicates the percentage from the rest of the world.
Considering the expenditures on overall commercial activity, we can deduce that The United States of America occupies a major portion of the expenditures (26.67%) i.e., 1,895 transactions in total, followed by France (9%), Mexico (6%) and China (5%). The proportion and country however change for different needs. For example, taking a look at the inflows into the wellness & beauty sector, in addition to the above similar players, we have inflows from Portugal (6%). Likewise, the percentage and the the country of foreign consumers differ with each sector.
Between 75% and 80% of the enterprises are identifiable by location. It is therefore an impeccable indicator deciding your business’s success quotient. Also, learn how this tool could boost the business in sectors such as retail, real estate, franchise, FMCG, etc, in our on-demand webinar:
The transactionality period
This comes vital for the marketing, merchandising and sales department to understand which time of the day/week/month and year, the transactions are blowing the roof. Knowing which, they can better create and direct the marketing campaigns to specific targets and manage the resources/products for the peak sale period. Much like the disparity pointed among foreign consumers in different sectors, the peak hour varies for different industries.
Overall, the peak transaction is reported at 19,00 hours with a total of 345,017 tickets. For fashion goods, the peak transaction happens also at 19,00 hours with 191,583 tickets. Moving on to Bars & restaurants which witnesses the highest at 15,00 hours (138,503 tickets).
Origin of the consumers
Knowing the metrics of your target audience in a particular location helps your business elevate to an extent; however, gathering metrics about the population residing in the surrounding postal codes or of the entire city, could help you navigate further into the population’s spending capabilities. Various sectors such as the expansion, marketing & sales, could benefit from interpreting this indicator; i.e.,
- Expansion department: choosing and rejecting the postal code for the next store/business depending on the volume of transaction and the average ticket.
For example: Let’s see the difference in the transactionality status between two postal codes in the Madrid city.
Considering the overall consumption rate, the total number of transactions varies across the city from as low as 2,395 to as high as 104,355. Precisely, the postal code 28006 has a high transaction of 62,616 tickets. In the same category, the postal code 28037 has a total of 1,864 tickets. Thus, the Expansion Directors could leverage their site selection process on this metric to make advanced decisions.
- Marketing/ Sales & Pricing Department: it is profitable to know before the strength of transactionality across various postal codes. It helps the departments to shape the marketing campaigns, fix the price of the products, etc.
The spending metric remains central not only for the retailers, franchises and other small businesses; but also for commercial real estate. Small and medium sized malls looking forward to commencing a business in a metropolitan city can make use of this variable to decide the location for their establishment.
Thus, the transactionality data, though powerful, is often overlooked by executives, which when delved into has all the capabilities to spin the business performance to a profitable direction.