I got an amazing opportunity to interview New York Times Best Seller and Analytics Expert Bryan Eisenberg about his newest company, IdealSpot. Bryan and his brother Jeffery are the brilliant minds behind this amazing business tool. IdealSpot gives traditional retailers the same advantages that online stores have had for years, data-driven demographics for their customers. However, that’s not all IdealSpot does…
So tell us a little about IdealSpot and where the inspiration behind it came from…
So IdealSpot came from the inspiration of having worked in the media industry for the last twenty years and helping retailers improve their business using data. So I started looking at what traditional retailers are taking for granted not having every day. Obviously, location is targeted. It’s about knowing where are the right customers. After looking at how other people are picking out locations, we realized that a big part of what they are doing was using models that were about forty years old. That’s if they are using anything because a lot of the tools out there are very expensive. At least they are probably using very basic demographics. However, there is so much data beyond that, and we wanted to make that democratized and real-time data. So it’s not ten-year-old census data. That way we can really help retailers and service businesses find the right locations to address their customers’ interests and demands.
How does IdealSpot do what it does?
It’s actually way harder than we even anticipated! Let’s start there! For the users, you basically go directly to IdealSpot.com and create and account. You tell us a little about your business. We can then identify the business category and even start identifying your business competitors. So then we start creating your own personalized map. From there you have access to all of the free demographics. You can start there with our 15 demographics that are used by about 85% of companies, such as age, income, education and day-time traffic. Using this information, we can start modeling what different locations or different neighborhoods look like.
So we can highlight for you where the densest areas are for the demographic you are interested in. Then from there we have additional information. We can start bringing in social media interests, such as people expressing interest in something like organic foods. We also use data from search engines as well, such as people looking for hot wings in a certain area. Then, of course, we can start bringing in things like traffic data from some of the top data providers out there. We are constantly bringing in more and more data sources. There are thousands of variables for every physical latitude and longitude out there in this world.
It’s interesting because we are definitely seeing some changing patterns in the way people are shopping, where they are moving to and how they are moving. The IdealSpot system is basically using a machine learning algorithm. So as we are learning about your business at each location and how they are performing, the algorithm adapts as it starts pulling all of the data. Typically our algorithm is looking at about 15,000 variables. So it is finding patterns that no one has looked at before!
Give us an inspirational example of the IdealSpot system
Part of what inspired IdealSpot was a business owned by a friend of Jeffery and mine here in town. It was part of a chain of restaurants in Texas and Florida. They eventually went bankrupt! The main reason is that they picked a location in north Austin that had demographics that looked great. It was near a lot of large, high-income families. They were even located in a very busy shopping center, right next to an H-E-B. So you expected that they would be able to survive. They were even next to a Torchy’s Tacos, which is packed out the doors at all times. Yet, that restaurant was doing less than 20% of their expected sales. It was obvious to us once we looked at the social interest map that there was no interest in their category of food what so ever! Once we realized that and saw the patterns of migration over time as well, it was obvious that it was a bad location for their business. Although, it wouldn’t have seemed as though using any other formula.
So would it be safe to say that IdealSpot is the most in-depth option for businesses looking for data driven location information?
I wouldn’t even say in-depth, because there are some very expensive consultants out there that will go ahead and map all of your customer’s credit card history, along with other data like that. However, I do think that we are the most accessible and affordable option. We are best of class, and we already have some of the top brands coming to us and saying “Wow, you’re doing things that I haven’t seen done before.” We are trying to make it, so you don’t have to be an analyst because no one wants to look through tons of numbers. So we want to answer all the questions for you. That way you can look at the information and see what this is a better spot than that one.
Have you found companies using your demographic information for anything unique outside of location?
We have had some people do some very interesting things with it. However, I think one of the most unique cases we’ve had is a developer who has been targeting Home Depots. This is due to their huge parking lots that are often underserved and are never filled up. They are figuring out, based on all the other businesses in that area, what would work best in that parking lot. So they are actually reverse engineering what we are doing. Which is where we eventually want to go, because this is not just for the retailer and service businesses, but also the developers. They are already hacking into do that, which is really quite cool to see.
That’s really neat! Is that one of the next steps, creating the other side to IdealSpot?
It’s one of the next steps! There are a lot of things to do to make this as seamless as possible. What is cool is that we are in the middle of a pricing change, and we are adding a bunch of new features. This is truly an on-going process because we know that there is always going to be new data sources, more information and new ways to present information easier to people. We are working more and more with businesses who have brick and mortar locations that are needing information, even if they aren’t moving. There are a bunch of questions that we can start answering for them as well.
It’s a passion for us! Even though everyone wants to talk about how big e-commerce is, I still believe the real opportunity is still in brick and mortar. The data even shows that over 85% of purchases are still happening in stores that people are walking into. As we sit here on the second floor of WholeFoods overlooking the parking lot, we are just watching people walk in and out. This is a busy shopping center right here. People want to shop! People want to touch and feel the products. We just need to give traditional retailers the same tools and thinking that online shops have had all of these years.
That’s very eye opening! I’ve been noticing that a lot of online businesses have actually been opening brick and mortar locations. So in a way you are reverse engineering that too!
Exactly! We’ve actually been contacted by some of those marquee brands that you hear about opening stores. Not Amazon, which is fascinating as well! That’s because they have a lot of their own data. However, some of the other big brands that people would know of in the online space that is now opening up their first stores have already started to work with us. This is because they want to work with people who understand their language. They want to work with people who look at it from the view of their customer’s digital footprint! As customers, we leave so much information about who we are and what we are interested in online.
As an example, we did a little experiment in-house using Facebook data to figure out where the current presidential candidates are supported around Austin. We looked at all of the neighborhoods and where their presidential interest was. Currently, Austin, Texas is a town of about 1.9 million people. Note that number includes a lot of families. In fact, Austin is one of the fastest growing cities when it comes to families with kids. Taking that into consideration, we were able to get data on 1.3 million individuals inside Austin. That is virtually everyone, minus the younger children who are no on the social media platforms. So the teenagers who are on socials medias, such as Instagram, are also feeding into that data. This just proves that this beast has tons of data that every business should be using in all of their marketing efforts.
There are a lot of small businesses out there, as an affordable option was it part of the business plan to give the underdog a bit of an advantage?
That was exactly it! The companies that are using the big consultants are paying for solutions that start at about $100,000 per year. So that isn’t an option for most businesses! What we wanted to do was democratize the data, we think it should be completely free. There are some solutions you can pay a little bit for, ranging about a few hundred dollars per month. However, we say that’s table stakes! Everyone needs to have that, so let’s just make it available for free. It’s not all of the data, but it’s a good amount of data on demand. So when they need to pick their location, we can give them a quick, calculated answer. With IdealSpot, you are looking at a couple hundred or thousands dollars, depending on how many locations. Whereas, the alternative of making a wrong location decision will ultimately cost your business a lot more. Our main goal is to make this information accessible to everybody.
For more information on IdealSpot, visit IdealSpot.com or follow them on Twitter and Facebook. I truly believe that Ideal spot is the best options for small businesses who are looking to open up a new location or move their current store. They give you real-time data about where your business would succeed based off of the needs and the demands of your business’ target market! If you are interested in learning more, feel free to visit their website, they even have an instant chat option on the bottom right of the screen!