Retail as we know it has been around for millennia, but as tech innovation continually evolves so too does how people shop. Understanding these patterns is the key to unlocking future growth. 

When we think of modern retail, that really started in the 18th century, no better example is the expansion of the United States of America.

As new towns and settlements popped up, so too did an abundance of “mom and pop” stores; small, local, independent, family-owned businesses selling everything from food to medicine. But as large population centres expanded quickly in the mid 19th century, along with innovations in transportation and electricity for power and lighting, European cities like those in the US contributed to the disruption in retail. In the late 1800s, the first department store was born in central Paris, a consequence of this urban transformation, when Le Bon Marché was set up by Frenchman Aristide Boucicaut.

Now, unlike the clusters of small shops that were so prevalent during the gold rush era, in Europe, customers could experience a wide range of goods and services under one convenient roof. But these department stores didn’t just sell items, they provided experiences like demos and in-store entertainment that took the shopping experience to a whole new level. Soon, household names we’re still familiar with to this day began popping up in major cities across the world. Names like Harrods, Macy’s and Sears.

At around the same time, the cash register was invented – and this was more than a device to store notes and coins in. The cash register meant businesses had a better way of working out whether they were making a profit or loss. Today, the cash register is a sophisticated, connected touch point that continues to revolutionise retail.

Then along came the car and retailers were quick to adapt to the growing trend of out-of-town shopping experiences and people living in the suburbs. In the mid-20th century, as car ownership grew, so too did shopping malls, those large “one-stop-shops” that sold everything we could possibly need under one roof.

Even before the advent of cars, other means of transportation made new ways of selling goods possible. It was the completion of the continental rail network that gave rise to the development of general merchandise mail-order shops. According to Britannica, “the ability to sell a variety of merchandise to farmers, at comparatively low prices, a postal rate structure that encouraged the dissemination of mail-order papers and catalogs, and the establishment of the parcel-post system in 1913 all contributed to the expansion of mail-order operations”.

Nevertheless, the bricks-and-mortar concept continued relatively unchallenged until not so long ago with the advent of the internet and a new golden age of shopping. Companies like Amazon have changed the retail landscape more in 25 years than anything else in the last couple of centuries. 

At the click of a button, you can now have anything from a pair of shoes to a new TV delivered to your home, in many cases the same day. According to a recent report, it’s hardly surprising to learn that 96% of Americans these days shop online while only 65% of shopping budget is spent in-store. Not so long ago our ancestors were shopping in markets, now 43% of people are making their purchases from bed. 

But as great as it is to get almost instant shopping gratification without leaving home, the joy of browsing, holding and interacting with goods has been diminished. The social aspect of shopping has been lost. And it’s why, especially in small towns, there’s a growing trend for local commerce, a trend gaining strength as people make more sustainable choices.

Just as we’ve seen throughout history, pivotal inventions, trends and consumer behaviours will continue to shape retail as we know it. As a society, we now have access to more data than we ever thought possible.

As Britannica writes: “Retail analytics is the process of using big data to optimize pricing, supply chain movement, and improve customer loyalty. Big data analytics in retail enables companies to create customer recommendations based on their purchase history, resulting in personalized shopping experiences and improved customer service. These super-sized data sets also help with forecasting trends and making strategic decisions based on market analysis.”

Successful retailers use analytics to understand how the demand for their products changes over time and in different locations. When they add consumer spending data to their models, they can discover how to meet customers where they are and stock their products more efficiently based on supply and demand.

Locations and territories play a crucial role in the success of any brick-and-mortar business. Geomarketing links location business data with information about regional markets, analyzes it and derives correlations. This way, geomarketing allows business to weigh up risks and potentials and thus to make quick decisions. 

A software engineering graduate of ENSEIRB-MATMECA in Bordeaux, France, Hugo Lucas is currently in the A-Team, where he has been looking after Targomo’s application programming interfaces (API) for the past two years. “I am mostly responsible for the Places Layers API and Places Context API (or POI service API, as we say internally) and the Location Scoring API which are written in Java,” explains Hugo. “I took part in the conception of those APIs and their further developments. It is really fascinating to witness the birth of a product and watch it grow in popularity in real time.”

For instance, back in May 2020 the Targomo engineering team participated in EIT Digital’s “Data Against Covid-19” hackathon against 19 other teams. “We developed a geospatial tool to analyze and visualize the capacities of intensive care bed units (ICU) in the face of the coronavirus pandemic,” describes Hugo. “We worked for 48 hours straight to shape a tool that was utilizing our APIs.” Another bonus?  Witnessing the dedication and team spirit in action. “It was a very special moment for me,” adds Hugo. “I was able to discover a lot about how my colleagues from other teams were working.” Spoiler alert: Hugo’s team secured second place and a cash prize, which was spent on an espresso machine and a pressed sandwich maker for the entire office to enjoy.

As a small startup, aside from the shared hunger for gourmet coffee and a passion for location intelligence, the Targomo culture gives Hugo the freedom to diversify his daily to-do list and become much more confident in his abilities. “I am not only coding powerful algorithms—I am taking part in their specification, conception, testing, documentation, presentation to the users, etc.,” says Hugo. “What motivates me is that our product is based on highly proven science. It has so many practical use cases.”

Case in point: Hugo even uses Targomo in his personal life. “Six months ago, I was flat hunting in Berlin,” shares Hugo. “I used TargomoLOOP to have a quick look at the quality of the flats’ locations before asking for a viewing.”

When he’s completely off the clock, you can find Hugo hanging out on Twitter. Catch up with him at @HugoLucasBLN.

A native of Hamburg, Niklas studied International Economics & Development at Universität Bayreuth before starting his career in global trade. Three years ago, Niklas pivoted to tech. “Previously I worked in a very traditional, impressive business segment. When I wanted a change, I chose to make a complete 180 and give my career a turn by joining a promising, fast-moving startup,” explains Niklas.

That startup was Targomo, where Niklas started as Key Account Manager and was one of our first non-tech employees. He now sits within Sales & Business Development organization, tasked with selling our complex, novel platform products and nurturing new commercial client opportunities. His successful work with some of Targomo’s largest clients has led to his recent appointment as Head of Enterprise Sales.

“I have always had a strong affinity for innovative products and solutions, much like the interactive maps that enable us to foster the power of geo-referenced data in a fascinating way,” says Niklas. “At Targomo, we are able to share valuable business insights that answer complex questions related to location, reachability and mobility.”

“In my current role, I have the chance to gain international experience and diversify my business knowledge,” adds Niklas. “I am driven by developing new markets and hunting for new business opportunities. Building strong and long-lasting relationships with our global partners is my professional passion. Targomo’s technology is bringing location intelligence to the next level—I’m thrilled to be a part of it!”

As one of our key sales personnel, Niklas is a well-known face of Targomo for many touchpoints, from events and pitches to on-site visits and personal demos. When he’s off the maps and out on the road, you can find Niklas searching for an amazing adventure in Mexico, or training for an upcoming triathlon.

Want to work with Niklas? Check out our open positions or send a speculative application!

The coronavirus outbreak is changing the roles of malls and inner city shopping areas. Samuel Vogel, owner of retail and real estate consultancy The Bird, has talked to Targomo and walks us through the changes affecting the retail market, from more local shopping to the diversification of a mall’s tenants.

In many European countries, shops have been allowed to reopen again, but lower footfall traffic is still very noticeable in top retail areas, such as malls and inner city areas. Samuel, who advices businesses on expansion and real estate strategies, sees this as the main challenge for retailers in top locations.

“When we don’t have reliable pedestrian data it is difficult to determine a location’s attractiveness. Rental prices have dropped considerably,” Samuel says during a video interview with Targomo. “I think in half a year we can truly see what the impact of the pandemic will be on inner city retailers. Which can survive, and which ones will throw in the towel?”

Footfall in inner city areas have suffered so much that in Germany even big chains such as drugstores DM and Rossmann and supermarkets like Rewe, Aldi or Alnatura have slowed or halted their expansion plans in these top locations, Samuel has noticed. Before the pandemic, there was a trend of these chains moving into the cities’ centers.

Samuel Vogel advises clients such as shopping mall manager Unibail-Rodamco-Westfield and safe deposit box company Trisor. He has worked for several other retailers, including VIU Eyewear and bakery chain Zeit für Brot.

On the positive side, he sees the current market as an ideal moment for companies to expand or move to top locations. “I think and I hope that we’ll get a bit more variation in inner city areas. Smaller players which previously were located in B or C areas now have a better opportunity to move into A locations, simply because they can afford it.”

He has seen that rental prices have dropped up to 35 percent in top areas, and that some retailers have decided to move to a next-door location to benefit from lower rents.

In addition to inner city areas, malls have suffered from the pandemic as consumers favored local, outdoor stores. Indoor shopping centers would probably benefit from new and different tenants to remain attractive, according to Samuel. “Some of them will have to repurpose retail space. Perhaps it would help if they house a big medical practice in a mall, or accommodate other use concepts to become attractive again or remain attractive.”

A third retail trend that the expansion manager finds noticeable is the arrival of instant-delivery companies, which operate micro-fulfillment centers in urban areas. Startups like grocery delivery firms Gorillas, Weezy or Flink are expanding rapidly.

“Flink, Gorillas and the like are companies that are not eying to rent top locations in inner cities. Instead, they want to locate their logistics hubs, of about 200 to 300 square meters in size (2,200 – 3,200 square foot), in the neighborhoods where people live. This allows them to reach their customers extremely fast. This is not immediately impacting inner city locations.”

Samuel Vogel founded consultancy The Bird in Berlin in 2020 after a decade-long career in retail. He has an extensive network in the retail and real estate industry in Germany and abroad. He supports retailers and other businesses with a B2C focus in finding the right location and right retail space. He advises or has advised a diverse group of clients, such as shopping mall group Unibail-Rodamco-Westfield, safe deposit box company Trisor, drugstore chain DM, VIU Eyewear and bakery Zeit für Brot. More info: the-bird.de

Targomo helps business and public organizations harvest the power of advanced spatial analysis. Targomo was founded in 2013 and is based in Berlin and Potsdam. The Location Intelligence company has customers in more than 20 countries and was selected as one of Europe’s top five Deep Tech companies at the EIT Digital Challenge in 2020.

The AI-powered location analytics platform TargomoLOOP allows users in retail, hospitality, real estate, logistics and public services to optimize their location networks and services. Users obtain valuable insights to increase revenue, save costs and gain decisive competitive advantages. Everyone can sign up and start analyzing for free.