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What is an index?

Indexes used in statistics data are like simplified scores that help us compare different things more easily. They transform complex data into a single number or value, often relative to a base or average. This makes it simpler to see and understand differences between various data points. For example, the Consumer Price Index (CPI) measures changes in the cost of living, and it provides a single number that helps us compare how prices are changing over time. Indexes are valuable for making data comparisons more straightforward and meaningful.

Consumer Index Data

Using indexed for consumer insights

One area where indexes find extensive application is in analyzing consumer data, such as the data from Canada (Vividata). This index succinctly represents how a consumer profile deviates from the national average, making it a valuable tool. Here are a couple of practical examples illustrating the functioning and analysis of index numbers:

Use Case 1: Comparing locations based on index

Imagine you're researching potential locations for a new fast-food chain outlet within a 25-mile radius. Utilizing location profiling, each location and its corresponding radius are mapped out. Subsequently, consumer behavior data (Vividata) regarding visits to fast-food restaurants is incorporated.

Through filters in the dashboard, the index values for each location are visualized:

In this scenario, Location 2 emerges as the most promising option as it significantly outperforms the national average in fast-food restaurant visits within the radius.

Use Case 2: Analyzing your customer base with indexes

Consider an online wine shop looking to expand its product range. By leveraging detailed consumer behavior data, insights about the countries of origin for wines consumers prefer can be gained. To enrich customer data and gain new insights, indexes can be used to compare customer preferences against the national average.

When you want to enrich your consumer data and gain new insights into your current customers, you can use indexes to see how your customers compare to the national average. Once you have mapped out your customers using consumer profiling, you can then add indexes related to wine consumption. This provides insights such as:

Integrating these indexes into the dashboard enables an immediate understanding of customers' preferred wine choices based on their region of origin.

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