The Geographical Edge: Spatial Analysis of Retail Loyalty Program Adoption
Arthur W. Allaway (The University of Alabama, USA), Lisa D. Murphy (The University of Alabama, USA) and David K. Berkowitz (The University of Alabama, USA)
Copyright: © 2005
This chapter demonstrates important insights gained by adding spatial capabilities to marketing analyses. Four steps are described to produce a geographically enabled data set of the first year’s daily use for a major retailer’s loyalty card program at one store in a mid-western U.S. city. Traditional analysis is contrasted with results from a geographic information system (GIS). Probabilities of adoption were clearly tied to the geographic variables generated by the GIS; for example, over the whole year, the likelihood of someone adopting on a given day decreased 13.4% for each mile they resided away from the store, while each Innovator (adopted in the first two days) located within .6 mile of a prospective adopter increased adoption likelihood by 13.2%. Further, three very distinct spatial diffusion stages are visible showing adoption as a function of distance to the store itself, to the billboards, and to the earliest adopters.