ResearchSights Blog

Helping eco-friendly retailers rake in the green: A research note on choosing store locations

2009-03-31T21:29:00Z

As entrepreneurs and the U.S. government focus more resources on developing “green” businesses, it is becoming more important to systematically select locations that are situated in trade areas with strong demand for green products. Doing so helps to ensure the success of green retailers. While location is clearly a critical element of creating a successful retail business, many small business owners do not have the data needed to identify optimal locations or they are not sure how to analyze such data and apply it to choose such locations. This post is designed to help those businesses.

Greener Country— a new retail operation that sells eco-friendly products online and at a brick and mortar location in Long Island, NY— worked with Jerry Savage of ResearchSight to profile specific areas in Long Island that were being considered for the first Long Island retailer specializing in non-food eco-friendly products. The project is a good example of how market research can be used to help green retailers succeed.

Six zip codes and zip code clusters in Long Island were first identified based on availability of property and the Proprietor’s experience living and shopping in Long Island. Trade area data were then purchased and those data were synthesized with past consumer insight research to help Robert Meinke achieve two primary objectives: [1] identify trade areas with strong demand for green products and [2] determine what categories should be carried by the new store.

Jerry and Robert analyzed the six trade areas based a broad range of variables including the following:

Lifestyles of trade area residents: The PRIZM lifestyle segmentation system was used to identify lifestyle segments that are concentrated with the trade areas being profiled. This helped us better understand the trade areas and provided insight that was useful to shaping the new store concept.

Proportion willing to pay a price premium for green products: After identifying the PRIZM segments that account for the majority of residents in each trade area, we identified which segments have the highest proportion of people stating that they are willing to “pay more for a product that is environmentally safe.” This helped us determine which trade areas held the greatest sales potential for a new green store in the area.

Retail leakage by category: Estimates of retail sales and consumer expenditures, by category, were then examined to identify trade areas with significant leakage (i.e., areas in which consumer expenditures exceed retail sales). When expenditures exceed retail sales in several categories, it can generally be concluded that the trade area under study can support additional retail development. Clearly, most consumers shop at stores near their home and/or place of employment. The detailed category analysis helped Greener Country identify products that are in at least relatively high demand within the trade areas.

Population density and growth estimates: Each trade area was compared to determine how many people live within the area and the degree to which the population is likely to grow in the future. Areas with high leakage and strong projected population growth are generally preferable.

Demographics: A detailed demographic analysis was conducted to help pinpoint various areas of demand and refine the retail offering being considered.

Competitive analysis and presence of retailers specializing in organic food: Consumer insight research on the market for eco-friendly goods and services has consistently shown that most consumers are motivated to purchase green products in large part because they believe the products will help make them and their families healthier. Therefore, we reasoned that trade areas where organics are selling well are those which can likely support a retailer specializing in green non-food products. Not surprisingly, the first location for Greener Country is located near a Whole Foods Market. We were also able to determine that there are no other stores in Long Island that directly compete with Greener Country’s unique offering of eco-friendly products.

While trade area profiles can be challenging for those who have never conducted one, the time and money spent working with a consultant can be a good investment. The work described above was done for less than $3,000 and the project was completed within a few weeks of the date it was commissioned.

We hope that this brief explanation of how green retailers can use trade area profiles will help more succeed in the future. Feel free to contact the Analyst, Jerry Savage(jerry@researchsight.com) , or Proprietor, Robert Meinke (Robert@greenercountry.com), if you have any questions. We’ll be happy to help if we can.

Sustainable Nutrition at the White House

2009-03-21T01:49:00Z

As noted in the last post, Alice Waters was interviewed on 60 Minutes last Sunday and discussed healthier, more sustainable ways of eating. During the segment, she noted that it seems like a great idea to plant an edible landscape at the White House. I agree that planting a garden at the White House is a wonderful idea, not only for the Obamas—who enjoy the taste and health benefits associated with eating fresh, locally grown organic foods— but also because it sends a healthy message to the American people: Fresh, whole, organic foods are preferred by some of the most powerful and beloved people in the country. And folks with a little land can grow their own.

I was happy (elated, really) to see that the New York Times ran an article today describing efforts underway to plant a garden on the South Lawn of the White House. A chef and gardener were photographed at the site. It looks like Sustainable Nutrition is becoming a reality at the White House.

Michelle Obama was quoted as saying that she would use the garden to educate children about nutrition and hoped that the kids would take the lessons to their families and communities. According to the Times article, twenty-three fifth graders from a nearby elementary school will help the First Lady dig up the 1,100 square foot plot.

Clearly, the Obamas are embracing concepts like Sustainable Nutrition as they work to shape the country and address problems like obesity and malnutrition in the U.S. That’s change I believe in.

Bravo, Obamas! Bravo!

Sustainable Nutrition is gaining traction

2009-03-17T21:16:00Z

As the Obama administration works to make the U.S. a healthier, stronger and more competitive nation, concepts such as Sustainable Nutrition are becoming more important. Thought leaders such as Ed Bauman and Alice Waters have championed lifestyles and ways of eating that benefit not only the individual but also our country and planet. Such frameworks— built on tradition and supported by modern science— may very well be the wave of the future. Indeed, it seems quite evident that consumers are increasingly embracing concepts like Sustainable Nutrition as they seek ways to live in a simpler, less expensive and healthier way.

These developments and others suggest that companies should be working harder than ever to provide consumers with products that will help them achieve their healthy aspirations while reducing their carbon footprint.

Like other analysts and executives around the world, we’re introducing concepts such as Sustainable Nutrition to big business. And it seems clear that the Obama administration— together with millions of supporters— will stand shoulder to shoulder with those of us who work to create and advocate healthier, more responsible ways of living. Indeed, this is the kind of work that is necessary in order for our nation to gather much needed strength and provide the kind of leadership that the world needs.

How do we Achieve Objectivity in Business and Politics?: A Note on Self-reflexivity

2008-03-03T01:05:00Z

“Self-reflexivity” can be defined as the process by which one considers how their social history, context, values, family, friends, colleagues and biases impact their methods and conclusions. In this sense, self-reflexivity is at the heart of objectivity and true scientific rigor.

Yet the notion also stands in sharp contrast to the tradition of science which views the analyst as an emotionally detached observer. In reality, many of us— even the best analysts—are not totally detached from our work. Thus there is a need to reflect on Self during many analyses as we consider the degree to which we have engaged in truly objective, unbiased analysis and decision-making. Put simply objectivity is hard work, not simple “scientific” detachment.

As we enter a new age of cultural transparency—one in which people openly use social media and social networks to evaluate theories, leaders and peers— I believe that self-reflexive processes will become increasingly important. Indeed, as the world’s people become better educated, they will increasingly demand more objective, data-driven leadership in business and politics. This will require that leaders [1] understand and study their own thought processes and biases and [2] reflect on Self as they labor to avoid bias.

In short, it may be that self-reflexive processes have the power to create real transparency in business and politics and, therefore, a more prosperous and peaceful society.

Moms Drive the Sustainability Movement

2008-02-24T01:52:00Z

The New York Times recently ran an interesting article on “EcoMoms” that helps explain the mainstreaming of sustainability in the US. Women in general—and moms in particular— have long been at the heart of the movement to make the environment we live in safer and healthier.

The article also helps explain why social networks are so important to researchers who are studying the sustainability trend. In 2003, while working with The Hartman Group, I wrote an article called Ethnography in Action that compared the use of focus groups to “social network parties” in the study of branding for children’s nutrition products. We found that the social network parties were generally more productive and provided insight that could not be uncovered in focus groups.

It seems that now, as much or more than ever, social networks of mothers are shaping society by encouraging healthier, more sustainable lifestyles. Hopefully, researchers and leaders will take note and watch EcoMoms and like-minded social networks as we work to shape society into a better, healthier place.

Online Survey Methodology: A Note on Cheaters

2008-02-22T00:01:00Z

One of our areas of specialization is online survey methodology and, more specifically, issues related to survey sample integrity. Of particular interest to some readers is the now widely recognized problem of survey cheating. “Cheaters” are those folks who, in the effort to maximize the incentives they receive for taking online surveys, provide false information or take a survey more than once.

We have written two brief articles on the topic of survey cheating: Managing Data Integrity in Online Surveys provides strategic insight for researchers and managers who are either evaluating the integrity of online samples or are planning to conduct an online survey. Who Participates in Market Research Surveys? tells the story of “Mike,” a very frequent survey taker. That article provides more general insight on how “professional survey takers” operate and how some attempt to maximize their survey-taking income.

We also want to note it is important to recognize that many survey respondents are indeed good folks who provide honest feedback. We know this because we have done studies using both qualitative and quantitative methods that allow us to explore honesty. Moreover, the problem of cheating occurs more in some studies than others. As a general rule of thumb, when using the Internet to survey low-incidence populations (e.g., users of a rare technology) it is especially important to be diligent in the search for cheaters. By contrast, when surveying people about products many or most people use (e.g., bottled water), the incidence of cheating tends to be lower. The bottom line is all survey samples (especially from online studies) should be examined carefully before reporting.

As always, let us know if you have any questions about your online survey project and we’ll do our best to provide answers.

Welcome to ResearchSights

2008-02-19T00:37:00Z

As the owner of ResearchSight, I am pleased to launch this web-sight for those who share our commitment to the research process and consumer insight. Business has been good since I started the company one year ago and I am optimistic the market will continue to recognize the value we provide to clients and colleagues.

Most of our current studies address questions related to how minority populations in the US (Hispanics, African-Americans and the LGBT segment) make decisions about where to shop and what to buy. We are also exploring how the rapid growth of certain minority populations is shaping the nature of the US and the markets we serve.

We are working hard to open up new opportunities in the burgeoning area of sustainability. Our focus on Sustainable Nutrition is designed to help uncover new opportunities for companies and consumers to work together to improve human and environmental health at a global level.

Our recent white paper entitled Putting Nutrition Professionals to Work provides a critical foundation for this new effort. We hope that this collaboration with Bauman College will be useful not only to nutritionists but also the many entrepreneurs and leaders who are shaping the organizations of the future.

We will be using this blog to describe our research as well as thoughts on research design, branding, politics, culture and industry. We welcome requests to address specific questions. We also hope that you will join us in working to build companies that serve stakeholders as well as the cultures and planet that make business possible.