Q: What opportunities does the Mexican market offer to a company like Georesearch?
A: Georesearch is a company that provides precise and quantifiable insights to help companies with their decision-making processes regarding where they should locate their stores and the projection of potential sales. While Chile has welcomed our proposal very well, the country market had few players and a very small population. It is the reason why the Mexican market is now our main focus; it is where we see the most significant growth opportunities. While in countries like Peru, Colombia or Chile, around 4 out of every 10 companies use geointelligence services, in Mexico, around 5 out of every 100 companies use geointelligence. This means that the market is not only bigger than other Latin American countries but also requires significant positioning campaigns to raise awareness about the benefits of this technological solution.
Even though we define our company as a geointelligence business, our added value is that we advise and help our clients reduce the risk of selecting a new location to almost zero percent. This means that we sell precision. Geointelligence focuses on three axes. The first is information, whether demographic, socioeconomic, commercial or otherwise. Today, we can know how much money families are willing to spend on different items or services depending on the neighborhood. We gather data related to demand and we define the potential expenses per home. The most important element is that this is up-to-date information that allows for better decision-making. The second axis is related to digital cartographies, or detailed maps of neighborhoods. This is important in a country like Mexico because neighborhoods have different behavioral patterns depending on how their infrastructure is laid out. The third axis, which represents our competitive advantage in the region, is geostatistical algorithms. These are different models that are able to transform all our information into behavioral probabilities that can help actors like Walmart, Adidas, Starbucks and Nike to estimate how much they will sell, depending on where they set up their stores. The models have a 2-6 percent margin of error.
Today, all businesses need geointelligence for proper expansion or even for contraction cases. In the past, decisions were based on intuition and know-how, but competition and the dynamism of today’s information make this technological solutions indispensable.
Q: What are the most pressing challenges that Georesearch has faced to convince companies to adopt geointelligence?
A: There are two key elements. The main challenge in a country like Mexico is related to how up to date the information is. When we arrived in 2015, we spent two years developing algorithms for updating information and found significant degrees of asymmetry between what official institutions said and the actual picture. We found areas where INEGI said there were 1,000 inhabitants when in reality there were 4,000 people. We developed algorithms using satellite pictures and different sources that allowed us to confirm that the information that we were using was the up to date. This translated into a competitive advantage for our operations in Mexico.
The second challenge is focused on the company and how we will generate positioning actions and tools to make people aware of the geontelligence concept. In a country like Chile, there are around 2,000 retailers, while in Mexico, OXXO alone has 18,000 points of sale. Companies with such a significant expansion rate can use geointelligence to estimate sales at any given point of sale and how these will impact the results of the whole sales network.
Q: What opportunities does the SME ecosystem offer to Georesearch?
A: Geointelligence works for companies with a single point of sale or 1,000 points of sale. Even chains that are entering a new country and have no history there can benefit from geointelligence. In 2019, we helped several chains, including Carl’s Jr and Little Caesars, to enter the Chilean market. We proposed locations for their points of sales that ensured high sales and very low market cannibalization. That being said, precision is higher when companies have a local history.
Q: Georesearch has four business verticals: retail and mass consumption, marketing and CRM, real estate and special projects. Where have you found the largest demand for your services?
A: Retail and consumption is the vertical where we see the largest acceptance. In Mexico, in particular, pharmacies have been keen to use our technology. However, supermarkets and fast food chains also are among our successes, with results with a low single digit margin of error.
A sector that could benefit greatly from our solutions is the restaurant segment. Mexico has several large players with significant expansion rates that are opening new locations in places that are not the right fit. Most decisions in this sector are intuitive, yet many myths have been broken by geointelligence. A mall with a large influx of people does not guarantee the success of a business, for example.
Georesearch is a Chilean company founded in 2011 that specializes in providing geointelligence services to support companies in making strategic business decisions regarding optimal location and estimation of potential sales behaviors. It has led projects across eight countries in the Americas: Chile, Mexico, Peru, Colombia, Panama, Brazil, Argentina, Paraguay and the US.
FUENTE: Mexico business