Every year after RECon I like to write down my thoughts based on our meetings with existing and potential clients. This year we saw a large increase in our number of meetings at RECon. In total, we met with over 80 prospective new clients which is about a 30 percent increase from last year. It seems that the market is hungry for a system to manage their real estate data and analytics!
Below are a few points highlighting some common themes:
Companies are demanding transparency with their sales forecasting models
People are frustrated with vendors that supply models that cannot be understood or explained to humans. You can’t really build a sound real estate strategy if you do not understand what variables are important for your success. What would happen if your CEO asked you to describe what was driving sales for a prospective new location and you were not able to answer the question because the sales forecasting model is a pure black box? Several people also indicated that the results of these new “AI”-based models are not accurate and are seeking vendors that can deliver transparency in their models.
Companies are growing sick of systems that they cannot control
Many of the people that I talked to are frustrated with the lack of control they have over their site selection systems. It amazes me that you still need to call tech support to make simple changes such as formatting symbology or creating a thematic map. People are finally realizing that these systems have serious restrictions and are seeking alternatives.
The need for up-to-date data
People are realizing that spending lots of money on a sales forecasting model that is housed within a system whose data cannot be easily updated is a waste of money. The most important part of building a sales forecasting model is training it on accurate, up-to-date data. This data needs to be kept as current as possible, so the model is aware of changes that have happened in the market. How accurate can a sales forecast be if it is not aware of competitor locations that have opened/closed within the last six months?
People are understanding the need for a demographic and competitor data warehouse
If I mentioned the concept of a data warehouse at RECon a few years ago I would have been looked at like I was crazy. However, more and more companies are hiring data scientists that work with software such as Tableau and PowerBI that connect optimally with a data warehouse. The ability for a software platform to keep a demographic and competitor data warehouse always up-to-date based on user actions is starting to be a differentiator in our product offering. I think this trend will accelerate over the next few years as companies hire more internal data scientists.
I’m still surprised that people are OK working in multiple systems
A large number of people are OK with logging into different systems to manage their stores, competitors, demographics, and sales forecasting models. This was rather surprising to me as all this data can easily be incorporated into one system. Perhaps people are turned off from prior experiences with “all in one” systems that do a lot of functions but are not particularly good at any of them. I think there is a large opportunity to build greater cross-application support within site selection software, property management systems, and data warehousing applications. This is something that TAS will be working on in the near future.
Thank you to everyone that took the time to meet with us at RECon. I really enjoyed our conversations and I hope you learned how TAS can help you meet your goals!