Technology has created innovative ways for businesses to develop, grow, and remain sustainable. They have enabled businesses to produce products and services (“what”) using particular processes, methods, and technologies (“how”) to meet the demand of a target market by implementing defined strategies (“why”). What many businesses continue to neglect is the “where” that involves the precise location of business facilities, understanding their proximities to competitors and their target market, understanding spatial distributions, and incorporating contextual information to enhance business decisions like logistics, site selection, and market strategies.
Geographic Information System (GIS) technology enables the visualization of “where” and the analysis of geospatial data. For many progressive businesses, it has become an effective tool for business development and growth in different industries across the globe. Geospatial data, also known as spatial data, contains information about the location of geographic features and their relationship to one another. These features include points such as the location of retail outlets or government services, lines representing all forms of transport infrastructure like roads and railways, and polygons representing administrative areas or trade areas that allow demographic information and consumer purchasing data to be spatially displayed.
GIS and geospatial data are the only means to enable the spatial representation of the real world and understand the intricate relationship between the “where”, “what”, “how” and “why” phenomena in real-time. In South Africa, a country with a diverse landscape and complex socio-economic challenges, the application of GIS and geospatial data could be particularly transformative in helping analyse geographic access, service delivery challenges, and infrastructure needs. Accessing detailed geospatial data and analyses, including the distances people are willing to travel to access retail facilities and considering target population thresholds, makes it crucial for effective decision-making, developing businesses, and improving the lives of people in urban and rural areas.
There continues to be this belief by business leaders that they can simply identify new retail sites for stores on the “back of a matchbox”. This may be true for a small geographic area or in markets where there is limited competition. The reality is that in a country like South Africa where there is diverse markets, significant competition, and saturation within the market, the use of GIS and geospatial data becomes a necessity. It allows understanding the “where”, “what”, “how” and “why” in the multitude of contexts faced by businesses in this country.
Geospatial Data: More Than Just Maps
The use of GIS and geospatial data involves the collection, analysis, and visualization of spatial data. This includes a wide array of information on demographics and consumer markets, location of existing retail and competitor facilities, modes of transport and movement of consumers as well as knowing where the economic hubs are to locate new facilities. This technology is essential for making informed decisions across various sectors, and South Africa is no exception. The country’s unique spatial realities and the service delivery needs of its people are constantly changing, making it vital to use GIS and geospatial data to conduct regular geospatial analysis, accessibility studies and provide innovative service solutions vital.
Geospatial data is information with a geographic location that describes features, events, or phenomena that is below (eg geology, soils, earthquakes), on (eg points of interest, tourist attractions, mountains), or above the surface of the Earth (eg climate, pollution). This data can be used to define neighbourhoods, examine physical adjacency, and show the relative positions of features to one another in the real world. This enables a deeper understanding of real-world relationships and patterns. The applications of GIS extend to many sectors, including land management, telecommunications, agriculture, military operations, transportation, law enforcement, recreation, marketing, operations, sales, retail, and logistics.
In South Africa, GIS is being used to address a variety of challenges from improving service delivery to informing strategic business decisions. Our company has worked with the South African government to develop “Guidelines for improving geographic access to government service points”. The overall purpose of the guideline is to help government departments improve geographic access to their service points and enhance service delivery. It provides a detailed, practical approach for analysing and planning the geographic locations of service points to better meet public needs. The guideline emphasizes the importance of accessibility studies and offers step-by-step instructions for developing geographic access norms, collecting geospatial data, and implementing plans to improve service accessibility. These guidelines apply equally to the business sector.
Other applications of GIS and geospatial data in businesses are to develop targeted marketing campaigns or locate retail operations in appropriate geographic areas. The Marketing All Products Survey (MAPS) is the only source of consumer data that can be represented in a spatial format. MAPS is vital to understanding the size and location of a business’s target market so that appropriate marketing strategies and advertising campaigns can be developed for its diversity of products and services.
Our company has completed several retail network optimization studies for companies like Nissan, Mazda, Mercedes Benz, Volvo, Avbob, McDonald’s, Hungry Lion, and Levi Strauss. McDonald’s aimed to increase their turnover by identifying optimal locations for new restaurants, considering current locations and market demand. Hungry Lion targeted expansion in the Eastern Cape, using demographic and market data from MAPS to choose the best store locations. Similarly, Levi’s conducted an accessibility study to expand its store network, focusing on highly accessible shopping malls and clustering of especially clothing stores.
The use of geospatial data with its variety of applications is important in a country like South Africa with its diverse demographics and settlement patterns. The ability to analyse and visualize data in this way can enhance business development, facilitate more effective decision-making, and ensure sustainable revenue growth.
The Power of Location: Accessibility and Service Delivery
Location, accessibility, and service delivery are powerful factors that can significantly impact a business’s success. Geospatial data helps companies understand where their customers are and how to reach them, which is essential for growth and planning. For example, in site selection, businesses can use geospatial data to determine optimal locations easily accessible to their target market, while considering competition, proximity to customers, transportation, and safety. This information is crucial for retail businesses looking to open new stores or for logistics companies trying to optimize their distribution routes.
By analysing demographic data and consumer purchasing habits, businesses can make informed decisions about where to invest, enhancing their ability to meet customer needs. Moreover, understanding the geographic reach of a business, compared to its competitors, allows for better strategic planning. Businesses can use GIS to ensure that their services are easily reachable by their customers and identify areas where service points are lacking. For example, companies like Netcare, Mediclinic, and Life Healthcare can use GIS to determine the optimal location for new hospitals and medical facilities to serve a defined market.
By combining geospatial data with information about warehouses, transport networks, and existing supply outlets companies can develop a system that ensures they can easily reach their facilities. In logistics and supply chain management, geospatial data is critical for ensuring that goods are transported efficiently and effectively. This not only reduces cost but also increases customer satisfaction and supports business growth. This would apply to any large retail company in South Africa such as Shoprite Holdings, Pick n Pay, Spar Group, Woolworths, and Massmart. Ultimately, a business that integrates these location-based factors has a strong advantage in providing high-quality services that meet consumer needs and ensure sustainable growth.
Data is Key: Acquiring and Managing Geospatial Data
The process of acquiring spatial data involves gathering information on business facilities, customer purchasing, and demographics, retail outlets, prime economic hubs like shopping malls, target markets, and transport networks. Other contextual data that influence the success of a business such as poverty levels, unemployment, and crime statistics should also be acquired. Many different methods are used in acquiring geospatial data for businesses. Geocoding can be used to map the location of a business’s existing facilities, competitor locations, customer data and prime sites based on their street address. This involves assigning geographic coordinates to addresses using available Address Geocoding Systems like Google Maps.
Historically geospatial data was largely acquired through the conducting of fieldwork surveys and the capturing of GPS coordinates of business facilities. Censuses remain one of the methods that is used to collect data on the characteristics of the population at a granular level. However, many countries across the world do not provide access to the census data at a granular level or in a spatial format. Consequently, alternative methods have been used to provide Information on the distribution and characteristics of the population. This includes the use of high-resolution satellite imagery with statistical and artificial intelligence methods.
Household surveys remain the primary method by which information on the consumer market is obtained. To ensure that the data from these household surveys can be used as spatial data, the use of area-based sampling designs using current demographic estimates is a necessity. Machine learning and artificial intelligence algorithms can then be used to impute the data from areas sampled during the survey to all other areas at a granular level.
To be able to conduct effective accessibility studies requires access to a comprehensive transport network for a country. Several companies such as HERE Technologies, TomTom, Google Maps, and OpenStreetMap (OSM), to mention a few, provide road data for countries across the world. This data needs to be topologically correct for the data to be used in creating distance matrices required in the conducting of accessibility studies. Quality control of the data is necessary before conducting accessibility studies, and tools like Google Earth can be used to verify the geographic position of service points.
Analyzing and Modeling for Better Decisions
Once data is acquired and quality controlled, it is used to model and analyse the accessibility of existing business facilities and identify news sites. Accessibility studies include several different strategies including expansion, relocation, and reduction. Our company has assisted organizations like Avbob in developing both an expansion and relocation strategy that we believe has contributed to the long-term success of the business. When Mazda separated from the Ford Motor Corporation in 2014, a reduction strategy was used to reposition the OEM and its dealerships to focus on its target market with an optimal retail network considering its market share.
This involves importing datasets into accessibility modeling software and improving the connectivity of the transport network. The process includes defining the study area and assigning modes of transport and speed limits to the road network. The software helps develop catchment profiles and includes a range of accessibility statistics for the selected study areas. These profiles help to determine how many people each retail, outlet has to deal with and the average distance customers travel to reach the outlet. This data can be used to identify areas that require priority attention for the expansion or reduction of retail facilities. By simply overlaying the data on existing facilities with population distribution and consumer data, potential service gaps can be identified. The combination of these tools offers a clear advantage in planning and decision making within businesses.
GIS in Business: Targeting and Strategizing
Beyond public service, GIS also plays an important role in business. Businesses can use GIS to analyze consumer behaviour, track social media activity, and identify brand preferences within certain geographic areas. This can inform decisions about where to locate manufacturing plants, target marketing campaigns, and identify ideal locations for retail operations.
GIS allows companies to understand the spatial distribution of their customers and tailor their services and products to specific regions. This kind of market analysis can be done at fine levels of detail. The use of GIS also enables the analysis of competitive landscapes and the simulation of dynamic markets. This can provide a competitive advantage by revealing opportunities that might otherwise go unnoticed.
The Evolving Landscape of GIS and Web Mapping
The field of GIS is continually evolving, with new technologies and approaches constantly emerging. Cloud web mapping is increasingly important for storing, processing, and analyzing large datasets. The Internet of Things (IoT) is also generating massive amounts of location-based data that can be harnessed through cloud-based GIS. This makes it possible to analyze and visualize data through interactive platforms. The use of ontologies to add meaning to data and information is also becoming more important.
Large language models (LLMs) are advanced AI systems trained on diverse datasets to understand and generate human-like text based on the input they receive. These models can be applied to geospatial data by extracting and interpreting text-based geospatial information from various sources, enabling sophisticated analysis and decision-making. For instance, LLMs can analyze urban planning documents, environmental impact assessments, and social media feeds to identify trends, patterns, and insights related to geographic locations and their changing dynamics. This adds another layer to the usefulness of geospatial data by enriching the context for analysis and use.
Challenges and Future Directions
Despite its many advantages, using geospatial data also presents challenges. These include ensuring the quality and accuracy of data and having the necessary expertise to interpret it. It is also essential to address the ethical implications of using location-based information, including concerns about privacy. However, the benefits of GIS far outweigh these challenges. As the costs of technology decrease and data availability increases, the potential for GIS to improve business and public service continues to grow.
Future directions for GIS in South Africa include more sophisticated data mining and knowledge discovery techniques, as well as machine learning and geocomputational modeling. There is also a need for ongoing research into the sharing, versatility, and usability of data and information. By continuing to develop and refine GIS tools and methods, South Africa can continue to leverage the power of location to address its unique challenges and create a more equitable and efficient future. By being open to the innovative potential of this field, South Africa can map a path towards a more prosperous future.
Why the uptake of GIS and geospatial data in business is slow
While GIS and geospatial data offer significant benefits to businesses, several factors contribute to their slow adoption. These challenges can be broadly categorized into awareness, education, infrastructure, and the nature of the technology itself.
- Lack of Awareness and Understanding: Many business professionals are not fully aware of the potential benefits of GIS and geospatial data. Some may see GIS primarily as a mapping tool, failing to recognize its broader analytical capabilities. There is also a lack of understanding of how to interpret and use geospatial data effectively for business decisions. The term “geographic information” may be too technical for some business executives who may better understand the concept as “location intelligence”.
- Educational Gaps: Business schools often do not include GIS in their curriculum, leaving graduates without the necessary skills and knowledge. This lack of formal training creates a skills gap that can hinder the adoption of GIS in business. Although universities may offer GIS courses in geography departments, these courses are often not integrated into business programs. This means business students may need to independently seek out these courses and learn new software, which creates a barrier to entry. The absence of relevant textbooks and case studies focusing on GIS in business in South Africa also contributes to this gap.
- Infrastructural Limitations: Implementing GIS requires access to reliable and updated spatial data. The absence or inadequacy of such data sources can impede the seamless integration of GIS into decision-making processes. The volume and variety of geospatial data can also be a challenge, as datasets can be massive, making them difficult to store and process. Geodata may come in different formats and standards, making it difficult to combine and analyze. Furthermore, the cost of acquiring spatial data can be a barrier. While some public data is available for free, organizing and ensuring its quality can still be expensive.
- Complexity of GIS Tools: The intricate nature of GIS tools and software platforms can be a deterrent. Many GIS platforms are primarily targeted at environmental science and highly technical fields, which can make the learning curve steep for business professionals. Business schools may be reluctant to adopt GIS due to the complexity and time required to learn specialized GIS software. Some business professionals may not be comfortable with the modeling techniques and interface limitations that are common in other decision support systems.
- Integration Challenges: Businesses may struggle to integrate GIS with their existing IT infrastructure. It may be difficult to combine and analyze geospatial data with existing business data, such as customer information. There can be difficulty in building a comprehensive spatial database in the first instance and integrating diverse data sources. Although 90% of business data has a spatial component (such as street addresses) and 80% of businesses require GIS, it is often not used to its full potential. To ensure the effective incorporation of GIS into business requires that it is integrated into planning, information systems, and business strategies
- Organizational Culture: The culture of some organizations may not be conducive to adopting new technologies like GIS. Some top managers may lack an appreciation for the value of GIS, which can hinder its adoption. There can be resistance to change, particularly in departments such as marketing that are not traditionally accustomed to using other technologies.
- Data Silos: Data often exists in silos within an organization. Company data and the use of GIS should be seen as a corporate resource. Promoting cross-departmental collaboration and centralized access to data in a spatial format can enhance data sharing and integration.
- Focus on Traditional Methods: Many businesses may still rely on traditional methods of data analysis and decision-making, and may not see the need to incorporate spatial analysis. The use of databases and spreadsheets is well-established in business curricula, whereas geospatial analysis is relatively new.
- Cost and Return on Investment: While GIS offers a strong return on investment, businesses must see how GIS directly contributes to their strategic and operational goals by saving money, avoiding costs, saving time, and increasing market share. Assessing the costs and benefits of GIS can be complex. The need to link GIS with other technologies and software, such as GPS, wireless technologies, and statistical packages can also increase costs.
Despite these challenges, the importance of GIS and geospatial data in business is growing, particularly as more data becomes available and the technology becomes more user-friendly. It is recognized that 90% of business data has a spatial component, and as this awareness grows, the adoption of GIS in business is likely to increase.
