Recently, the Canadian government announced its decision to eliminate the traditional long-form Census questionnaire with a voluntary National Household Survey (NHS) in conjunction with Census 2011. While some supporters in the government agree with the change, the news has garnered backlash from demographers, geographers, statisticians and much of the population, including Canada’s Chief Statistician, who has resigned his post due to the Minister’s decision.
 

As a professional demographer with Pitney Bowes Business Insight in Toronto, I have used Canadian census results for the past 12 years, especially those generated by the long-form census questionnaire. Without the long-form census sample, valuable information used in both the public and private sector will be lost. In addition to the arguments for reinstating the long-form census presented by many Canadian organizations and professional societies including the Canadian Population Society, I would like to contribute the following considerations:

• A voluntary survey, such as the proposed National Household Survey, would not be a sufficient alternative to the mandatory census sample survey. The traditional one-in-five household sample provides good information for every neighbourhood in Canada. In contrast, information from a voluntary sample survey would be biased, even at the provincial and national level.
• A voluntary sample survey would have a much lower response rate, relative to the mandatory long-form census, and those who do respond would be, by definition, self-selected. Using information from a self-selected sample of unknown and really unknowable bias in health care planning, for example, would have adverse impacts on health care delivery in Canada.
•  Filling out the long form may be onerous, but it is not an “invasion of privacy.” The rigorous confidentiality standards of Statistics Canada actually protect the privacy of Canadians because the individual responses are highly protected and only used in privacy-friendly ways (aggregated to relatively large geographic boundaries, for example) to generate information for businesses and government agencies.

Overall, the long-form census data are a significant contributor to the Canadian economy in both the private and public sectors. Businesses rely on census information to grow and help their customer base. Government agencies plan the delivery of services and the allocation of funds to government programs. The quality and utility of the long-form census data are also a testament to the highly professional staff at Statistics Canada who collect, compile, analyze, and disseminate the data to businesses and communities alike.

The significance of this decision for all users of Canadian demographic data cannot be overstated. Readers are encouraged to voice their concerns directly by writing to:
The Honourable Tony Clement
Minister of Industry
House of Commons
Ottawa, ON
K1A OA6

PBBI Canada is interested in your perspectives and questions as well. Please address them to tom.exter@pb.com.

This week, Janet Cho of The Cleveland Plain Dealer, published an article titled “Retailers offer Christmas in July specials to woo reluctant shoppers”.  In the article, Janet identifies an emerging trend from retailers, such as Toys R Us, Sears, Kmart, Target and Things Remembered, who are all promoting Christmas this week in an effort to clear out inventory, boost sales, and invigorate reluctant shoppers.  Along with Santas on store signs decked out in a swimsuit, flip-flips and shades, these retailers are offering massive Christmas themed discounts, and even 24-hour Black Friday sales.

But will this work?  Deb Purcell, Director of Client Services at Pitney Bowes Business Insight talked to Janet about this trend.  Deb argues that most families are concentrated on back-to-school items and wardrobes.  Asking consumers to plan for a holiday six months in advance may be a stretch on the family budget.  The full story…

The Cleveland Plain Dealer is one of Ohio’s largest newspaper websites, Cleveland.com.   The site receives 1,645,430 unique monthly visitors.

The July edition of Marketing AdVents features a byline authored by Pitney Bowes Business Insight’s Director of Strategy, Suresh Nair.  In the article, Suresh discusses the manner in which companies are beginning to use statements and invoices as a marketing vehicle.  By combining transactional information with targeted communications in transactional documents such as statements, invoices, and notifications, organizations are able to generate sales, reduce churn, and build customer loyalty.

Suresh argues that marketers need to own the bill, encouraging them to influce the content, format and customization of the white space typically found on statements and transactional documents.  He also outlines just how effective transactional document marketing can be, given the 95% open rate on these types of documents.  Read the full story…

The Challenge
Denny’s, one of the largest, full service, family-style dining chains in the U.S., sought to expand its brand through new restaurant prototypes, new deployment environments and new markets. In 2007, Denny’s Franchise Development group launched the Franchise Growth Initiative (FGI) to optimize its company restaurant portfolio while ‘seeding’ franchise growth in key markets. To help evaluate and identify which company operated units to sell to franchisees, Denny’s needed to develop a more efficient and effective method of assessing existing units.

The Solution
Denny’s turned to Pitney Bowes Business Insight to provide the sophisticated predictive analytics and site modeling capabilities needed to help guide its refranchising efforts. For franchisees, Pitney Bowes Business Insight conducts sales forecasts and sales transfer studies, providing an objective third party assessment of a site’s potential opportunities and challenges. Denny’s works with Pitney Bowes Business Insight as a continuous partner to help the chain re-energize its brand and navigate the turbulent waters of the restaurant industry. Read more…

Economists look at a variety of sources for indications of economic recovery – sources like national statistics on unemployment filings and consumer confidence scores. Lately, local indicators have been catching my attention. I live in a small town of 4,000 in the state of Michigan, a state which has the highest state unemployment rate in the country. Since 2007, four homes on my street have gone into foreclosure, but in the last year, all four of those properties have been sold. Although the sale prices of those homes are significantly lower than their values 3 years ago, the sales themselves may signal that the overall supply of foreclosures is decreasing. But while some local indicators are signaling economic improvement, others are showing that the economy is still struggling.

Local indicators abound. Recently, I took my vehicle in to get fixed at my automotive repair shop. When I quizzed the repairmen about business, they said it couldn’t be better. In the recession, it seems people are holding onto their vehicles longer to avoid high car payments, which translates into more trips to the shop for repairs.

Here’s an odd economic indicator: according to my uncle, a hearse driver in the central Wisconsin town in which I grew up, business is down because more people are opting for cremation, a cheaper alternative to burial.

Time magazine had an article that highlighted some odd economic indicators, like the increase in hikers on the Appalachian Trail. An article in Kiplinger.com took another amusing spin on economic signals, with 10 unique indicators to watch during the recession. I had no idea that, in some areas, the increase in bug bites may be attributed to the recession! A recent article in The Wall Street Journal cited an economist in San Francisco who can gauge the local economy by examining passenger tallies from the transit system near the Union Square shopping district.

Obviously, it is more relatable to talk about indicators at the local level, but what is interesting is that we don’t hear about these so-called indicators when the economy is doing well. Maybe in good economic times, people are too busy making money to notice. While it is fun to debate the local economic drivers, it is also important to follow the traditional market indicators. Pitney Bowes Business Insight has developed its own product, called MarketPulse, which correlates economic indicators with market-by-market sales performance of retailers and other operators.

What indicators are you seeing as both positive and negative? traditional in nature and more unique? Is your barber cutting more haircuts? Are there more moving vans at the local truck rental (more people moving into town than leaving)? How are sales at the local gift shop? Did your Girl Scout troop sell more or fewer cookies this year? Are parking tickets up or down in your town? Hopefully, all the signs point to an economy in recovery. Whether they get back to pre-recession levels, though, is fodder for another blog post.

I recently read an International Franchise Association article that outlined what franchisors should be doing to help their franchisees obtain funding for new capital projects in today’s risk adverse environment.

The suggestions were good and spoke to the fact that educating lenders about the brand and providing lenders with supporting documentation beyond the FDD is required today to help push things through a system that is still dealing with lots of uncertainty.

Another sound recommendation hinted at, but not expanded on, would be for the franchisor to provide the lender with some indication of the new store’s likelihood for success. An earning’s claim? No, we know these words are heresy, but predictive analytics can go a long way towards this objective without having to provide an actual projected revenue or earnings .

What are the dynamics of the trade area – are they favorable? How many of this brand’s best customers reside proximate to the new location. Where are the competitors and how do they help or hurt this location? What are the unique site characteristics of the physical store itself as well as the retail environment that will help this unit perform well? How does this unit compare to other units in the chain in similar markets sizes and conditions?

A well-thought out predictive analytics plan can help a franchisor more than just evaluating real estate for their own corporate stores, that very knowledge may be the difference between helping a franchisee get funding or not.  Lenders have also gotten wise to this and are now starting to do their own advance real estate research too. It’s a wonder this isn’t a lending industry standard already!

The Challenge

Priszm’s KFC restaurants have achieved a coupon redemption rate unprecedented for QSRs, as well as the overall restaurant industry. To continuously improve this rate, Priszm needed to update its 10-year-old trade zones and develop a repeatable system to drive its direct mail campaigns.

The Solution

Priszm enlisted the help of Pitney Bowes Business Insight (PBBI), the leading global provider of location and communication intelligence solutions, to help the company more accurately target flyer distribution, which would increase the coupon redemption rate and drive sales. PBBI focused on the modeling and underlying data analysis to improve the planning aspect of Priszm’s direct mail program for its 430 KFC restaurant locations. Now, the company is able to utilize a wealth of information for each trade zone, including customer demographics and psychographics, store performance and competition, enabling the company to more accurately target direct marketing efforts. With the help of PBBI predictive analytics solutions, Priszm has broken all industry records, sometimes achieving as much as a 17 percent coupon redemption rate. [Full Story...]

Ah..spring! A time for renewal and growth. Green shoots are emerging from the thawing ground and buds are blossoming, spreading cheer and optimism of even better days to come. The parallels between the current phase of nature’s cyclical routine and recent retail trends are striking. After hunkering down for a long, seemingly endless, frozen, and lifeless period, consumers are awakening to discover and cultivate new growth. Last week, the Commerce Department reported widespread sales gains in March. A recent Wall Street Journal article on the subject noted that this month’s gain was the fifth in six months, and that “consumer spending is on track to grow at an annualized rate of 3% to 3.5% in the first quarter, which would be the best showing in three years.”

You have to start somewhere.

New growth is branching out from necessity purchases to include postponed repairs and maintenance, even spruced up wardrobes. As consumers regain confidence, they begin to make smart purchases on safe, classic styles, much like the first shoots off dormant plants are those that become strong limbs that support eventual foliage. USA Today reports that the consumer behavior is beginning the shift toward discretionary purchases.  Pent-up demand from consumers who were living off their stores during the “long winter” is driving shoppers out to replenish their own depleted personal inventories. Small indulgences begin to enter the purchasing mix, such as eating out at fast-casual dining. Eventually, those who have weathered the storm decide to celebrate, and their mood will be reflected in their purchases. This change will not happen over night, but the pattern is predictable and undeniably underway.

The thaw.

As consumers come out of hiding, another key enabler of recovery-credit-is also emerging from the deep freeze. As home prices stabilize and volatility in financial markets runs its course, investors are also increasingly willing to leave their safe havens and entertain new ventures in an effort to reap higher returns. Healthy operators will be the first to leverage the opportunity and take over the most fertile ground, markets that offer the greatest consumer demand, healthy job prospects and stable or rising home prices. According to Kiplinger retailers and restaurants face a tougher lending environment than other small business types, but as consumer demand reappears, credit to support new growth will become increasingly available during 2010. Think of it as fertilizer.

There are naysayers who believe that new growth may be stunted by continued high unemployment or that a double-dip recession is possible, but for today I choose to inhale the sweetness of the positive news, allow the possibility of better times ahead to affect my outlook, relax just a bit…and maybe even go shopping.

As Americans and consumers, we have all witnessed the decline of countless national retailers in the past decade only to see them rise from the dead and live again. When a failed company is dismembered by bankruptcy court or investors, one intangible asset is generating interest; the company name. One question persists, if a brand failed to be successful in the retail arena, why would anyone want to invest in and perpetrate a brand that consumers have largely abandoned?

Each zombie puppeteer has different strategic reasons for acquiring the rights to failed corporate identities but one underlying theme prevails; brand equity. As a brand matures, customers become familiar with the company’s offerings, product assortment, pricing, ect. This “familiarity” coupled with millions of dollars spent annually on advertising can turn into loyalty and goodwill. This customer recognition is extremely expensive to create from scratch, which is why it is often appealing to resurrect a brand.

Once a $2 billion a year company, CompUSA succumbed to increased competition and torpid sales. Even though CompUSA closed most of its stores in 2007, consumers are largely still aware of the corporate name, identity and offerings. Acquired by Systemax in early 2008, arguably the most valuable piece of the company was the website and logo which is still used to sell merchandise online. The company is now reinvesting in their store network (see Retail 2.0: Brick vs. Click). After 60 years in business, Circuit City fell victim to the same perils as CompUSA. The $14 million Systemax paid for the company’s identity will probably top the price fetched by the company’s former 288,560 square foot headquarters recently returned to its lender. The building recently appraised for $46.2 million is listed for sale for $11 million.

When a retailer comes back to life with an internet only business model, name and reputation are by far the biggest assets they have to drive traffic and sales. With mitigated real estate, inventory and labor costs, online only retailers have much fewer expenses than their brick & mortar counterparts, allowing them to profit on much lower sales volumes. The next question is who is the next national retailer to close shop and serve your town from the sidelines of the internet? My guess: Blockbuster Video.

Lately it has been fashionable for national media outlets to spotlight the failures that have been plaguing Detroit for the past several decades and administrations. In June of last year, The Wall Street Journal Online edition published an article highlighting the mass exodus by national retailers (Retailers Head for Exits in Detroit – WSJ.com). Then, Time Magazine established Assignment: Detroit, a year-long endeavor where several journalists (including Detroit native Daniel Okrent) live in an east side home and write about everyday life in the beleaguered city (The Detroit Blog – One year. One city. Endless opportunities. – TIME.com). More recently, Time’s sister online publication Life.com chronicled Detroit’s demise through a series of photographs (Ragged Glory) that depicts the extent of the city’s urban decay (Detroit: Still Life – Photo Gallery – LIFE).

Now, I am not saying that Detroit’s struggles should not be the focus of national media scrutiny. In addition to the decline of the American automobile industry, much of the city’s plight can be linked to past administrations hard-line stances that they can go it alone. That is, without the help of the suburban civic leaders who have been more than willing to come to the Detroit’s aid over the years. Furthermore, an archaic tax code has made it increasingly difficult for businesses to prosper, all to the detriment of the city’s residents.

When Hudson’s flagship store on Woodward Avenue closed its doors in the 1980’s, Detroit became the only major city in the United States without a department store within its city limits. Now, the city owns another distinction – the only major city without a national or regional supermarket chain. In 2006, Farmer Jack was sold piecemeal to several buyers, ending the chain’s long reign within southeast Michigan. In addition to Farmer Jack, the city was once home to many banners such as Kroger, A&P, Wrigley, Great Scott!, Packer, and Chatham. Today, only Kroger remains, although none of it supermarkets are within the city.

However, Detroit is not alone in its struggles to offer residents quality supermarket options. Of the 15 poorest cities (based on the percentage of residents living in poverty), nine are under-served (less than 2.5 square feet of space per resident) by supermarket chains with at least 25 stores, as the following graph depicts:

Conversely, among the Top 25 largest US cities, ten are rife with supermarket chains having more than 3 square feet of chain supermarket space per resident. Of those ten cities, the following six have more than have more than 4 square feet per resident and may be considered “over-served”: Phoenix, AZ; Columbus, OH; Fort Worth, TX; Indianapolis, IN; Austin, TX; and Jacksonville, FL.

True, poverty levels in these six cities are significantly lower which may account for a more inflated ratio. However, it is not as though the poorer cities have significantly less demand for grocery-related items. In fact, on average, demand for grocery-related items in the “Under-served Nine” is 90% of the “Over-served Six” level despite having 86% less chain supermarket space. Can you say “untapped potential”?

So, how does the playing field become leveled?

Well, to the rescue here comes… drum roll please…The United States Government!! Now hold on, this is a good thing. As part of her initiative to combat childhood obesity, First Lady Michele Obama is spearheading a campaign called Healthy Food Financing Initiative, a $400 million effort to end “food deserts” in some of the nation’s largest and poorest cities. The program will be modeled after a Pennsylvania initiative that has produced more than 80 supermarkets in the past five years, where nearly 400,000 people now have access to better food choices while supplying about 5,000 jobs.

To underscore the administration’s commitment to this cause, Jeff Brown, owner of the 10-store Brown’s Super Stores (a ShopRite affiliate), was not only recognized in the President Obama’s State of the Union address, he was also a guest of Mrs. Obama. A fourth-generation grocer, Mr. Brown has been very active in Pennyslyvania’s Fresh Food Initiative. Please reference this link for more information: Success in Pennsylvania Stirs Hope for Food Deserts

The idea is catching on! New York, Louisiana, Illinois, Colorado, and New Jersey have all launched similar programs. So far, independent supermarkets have embraced these programs while reaction among chains has been lukewarm. Given the tremendous untapped potential combined with government incentives, this soon may change.

Despite all of the rancor and partisanship in Washington these days, this initiative seems to have bipartisan support. And, as long as there are no strings attached (like the auto and banking bailouts), Democrats and Republicans should be eager to “bring home the bacon” to food deserts within their districts.  The jobs these supermarkets provide will be the “icing on the cake”, which would be a tasty dessert!!