Measuring Consumer Confidence with Location Intelligence
September 10, 2021
The University of Michigan’s consumer sentiment index dropped 13.5% from July to August. A concerning plunge that is beaten only by the 19% drop in April of 2020 that was prompted by the COVID-19 pandemic and subsequent lockdowns. A lot of this is due in part to the uncertainty surrounding the Delta variant, and the economic impact that this will have. This is in stark contrast with Bloomberg’s Consumer Board which reported optimistic increases in consumer confidence earlier this year. It’s important that businesses consider the possible implications of the Delta variant and growing consumer prices due to global staff and product shortages and act now to increase consumer confidence.
Consumer behavior and confidence are closely tied together. They are often measured by what is commonly known as the Consumer Confidence Index. By surveying a significant portion of the population residing within a given country, they are able to gauge the degree of confidence felt about the country’s economy. This is important for businesses because it is a commonly known fact that when consumers are confident, they feel better about spending money. On the flip side, when consumer confidence is low, consumers save their money, giving organizations insights into the direction and state of the economy.
Investment companies, market research firms, and economic development organizations (EDOs) can use insights from location intelligence to better understand consumer confidence. How can brands measure consumer confidence and prepare themselves for future highs and lows? Location intelligence can help. Here is how brands can keep ahead of the curve and measure consumer confidence.
Data Enrichment for Investors
Foot traffic trends can tell investment companies a lot about consumer confidence. Location intelligence gives investors insight into how consumers move around in the world. When it comes to gauging consumer confidence, this data is crucial for investment companies to have as part of their data toolbox.
Consumers have shown an interest in buying new cars in 2021 more so than in 2020. For example, an investment company is trying to measure consumer confidence around car buying, but prior consumer confidence data isn’t providing enough insight into current activity around the automotive industry. By using location intelligence to enrich car buying data, investors are able to understand that while consumers are returning to their showrooms, the ratio of visits to purchases isn’t as high as it used to be due to low supply. This indicates that consumer confidence in the automotive industry might not be as high as expected. This gives the investors the data they need to update their strategies and continue to predict future consumer trends around car buying behavior.
Market Research with Consumer Confidence
Because location intelligence tracks foot traffic for your audience in the real world, it is able to provide market research firms with a comprehensive path analysis for their client’s customer base. By using pre and post-visit consumer data, brands gain insight into where their audience is shopping and why. This is especially valuable information for market researchers who want to help their clients understand where their consumer confidence lies.
Market research firms can use location intelligence to determine whether consumers prefer competitors over their clients, and how to win their customers back. With location intelligence, market researchers are finally able to help their clients understand the impact that consumer confidence is having on their organization and develop an actionable business plan for the best outcomes.
EDOs and Consumer Confidence Data
Consumer confidence data isn’t just for investors; municipalities should consider using insights from location intelligence to inform policies. By understanding consumer insights built on human mobility patterns, economic development organizations (EDOs) can better understand economic activity and determine areas that could use assistance with business growth.
2020 was marked by the mass exodus from large cities in preference to more suburban areas, signaling a shift in customer expectations and desires. Due to this, many businesses in those areas have seen an increase in consumer demand. To support consumer expectations, EDOs can analyze consumer foot traffic data to determine what types of businesses the community needs.
For example, an EDO is scoping out a particular area to determine what consumers are most likely to spend money on. They conduct an analysis using location intelligence and are able to determine that a lot of people in this suburb and surrounding areas are young urban professionals who had moved into the area in the last year. The EDO determines that local parks and recreation centers have seen increased foot traffic as a result, and these people are spending money at sports and recreation retailers. The organization now knows to prioritize reaching out to businesses related to outdoor recreation that would do well to open stores in this area.
Consumer Confidence with Location Intelligence
Consumer confidence is going up across the board, but EDOs and investors need a way to keep up with shifts in consumer behavior trends related to economic activity. With location intelligence, EDOs and investment companies can predict future consumer behavior patterns and understand how consumer confidence is impacting businesses. For more information on how to use location intelligence to understand consumer behavior trends, contact us today.