Tag Archive for 'Demographics'

Census Changes in Canada Will Jeopardize Data Quality

Published on July 22, 2010 in Tom Exter. 0 Comments Tags: , , , , , , , .

Tom Exter, Ph.D., Chief Demographer, Pitney Bowes Business Insight

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.

From Deserts to Desserts

Published on April 14, 2010 in Shawn MacDonald. 0 Comments Tags: , , , , , , .

Shawn MacDonald, Pitney Bowes Business Insight

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!!

In the Press: Schoolcraft College Taking Strategic Approach to Targeting Potential Students

Published on March 29, 2010 in Leslie Nogue. 0 Comments Tags: , , , , , , , .

Leslie Nogue, Pitney Bowes Business Insight

In the Spring 2010 edition of Community College Technology Update, Marty Heador of Schoolcraft College discusses the value of integrating consumer segmentation data and analyses into direct mail programs.   Schoolcraft College, a continuing education college in Livonia, MI, reached out to the predictive analytic consultants at Pitney Bowes Business Insight for help in maximizing the value of their direct mail campaigns. 

Through effective customer profiling, PBBI consultants were able to identify the affect that distance has on Schoolcraft’s student response rates.  They also determined the student count was dropping and the course load was decreasing per student faster than the number of students enrolled.  By uncovering the most “in-profile” students and the “out-of-profile” students, Schoolcraft’s marketing department is now able to re-direct their direct mail towards the carrier routes within the 10 miles of the college with the highest concentrations of potential students.  This effort has allowed Schoolcraft to “gain a deeper understanding” of their target student, but has also helped focus their marketing funds on those areas with the highest ROI. Read full article…

Spotlight on the Customer: Schoolcraft College

Published on March 17, 2010 in Leslie Nogue. 0 Comments Tags: , , , , , , , .

Leslie Nogue, Pitney Bowes Business Insight

The Challenge
Schoolcraft College, a comprehensive, open door, community-based College in Livonia, Michigan was seeking to target their mass mailings to neighborhoods with the highest concentrations of potential students.

The Solution
Through in-depth analysis of customer, geographic, and demographic factors, analysts at Pitney Bowes Business Insight were able to weed out under-producing carrier routes, allowing Schoolcraft College to focus their energies on the neighborhoods most likely to produce students. As a result of the segmentation analysis, Schoolcraft College gained a deeper understanding of its target student, enabling them to communicate with with prospects more effectively.  Using Pitney Bowes Business Insight’s comprehensive customer segmentation analysis, Schoolcraft College was able to identify concentrations of in-profile students, ultimately boosting enrollment and reclaiming valuable marketing dollars through targeted mailings.

To find out how Schoolcraft was able to quantify and utlimately increase their ROI, download the case study.

Consumer Demographic Profiling: Does Distance-weighting Make a Difference?

Published on November 20, 2009 in Nat Evans. 0 Comments Tags: , , , .

Nat Evans, Pitney Bowes Business Insight

It is a standard market research practice to use psychographic segmentation as a primary tool for discerning a company’s target customer.  This “customer profile” creation is a primary means by which customer behavior is bucketed into distinct groups that reflect differing customer characteristics, shopping behavior and loyalty to a retail, restaurant, or consumer package brand.

Over time, the Strategy & Analytics statistical modeling team at PBBI has given a lot of thought to the idea that customer profiles, and their use in sales forecast models, may be enhanced by weighting the customer source survey data by distance.  It makes sense.  The farther away target (or non-) customers are, the more pronounced the profile scores may be.

For instance, a typical customer profile for a high-end department store, with a specific high income, suburban customer segment or “cluster” (Corporate Clout, say, from Acxiom’s PersonicX lifestage segmentation system) may have a score of 200, meaning that people within the segment spend two times what an average customer spends for the concept.  A low-income segment (Single City Stress, for example) may have an index score of 40, or the segment spends 40 cents for every dollar that an average customer spends. Weighting the profiles by distance, however, may yield a more intensified result.  You may expect the high-income cluster to go from an index score of 200 for customers only within 0 to 3 miles, to 225 for those same customers beyond 6 miles from any given store.  Perhaps the Single City Stress cluster would go from 40 to 25, meaning that the farther away the cluster is from the store, the less they are willing to patronize and spend at the department store relative to other customer segments at the same distance.

In theory, it seems to be a reasonably insightful approach.  In practice, the S&A modeling team created just such an analysis, and found that among several clients’ customer databases, distance has no significant bearing on the relative spend of psychographic segments at the same distance.  The following box plot will give a sense for one sample profile’s distribution:

Distance Weighted
As shown, 50% of all scores’ distributions fall between approximately 50 and 110.  A couple of outlying clusters find themselves floating outside the distributions (the “1”, “2”, or “3” above the whisker for each plot), but statistically, no significant difference was found between scores at different distance increments.  The distributions’ medians were roughly the same; variance was the same.  This pattern was consistent among several customer files we tested, and the application of several distance weighting methods yielded no statistically significant enhancement whatsoever.  Goes against the hypothesis.  To be sure, there exists a multitude of ways to carve up customer data, and this analysis is by no means definitive, but from a macro level, it seems the proof is in the data. This analysis also does not mean that distance in its myriad forms (straight-line, drive time, drive distance) has no influence.  Obviously, it does.  Distance decay portrayed on a sales per capita, or other relevant, basis is very important indeed, and is an extremely well documented predictor of consumer behavior.  It’s just a matter of proper application, and what any one retailer’s customer data is truly telling an analytics researcher.

Customer Segmentation: Canadian Style

Published on November 3, 2009 in Sebastien Rancourt. 2 Comments Tags: , , , , , .

Sebastien Rancourt, Pitney Bowes Business Insight

Canadian privacy laws set ground rules on how organizations may collect, use and disclose personal information. Under the Personal Information Protection and Electronic Documents Act, for example, personal information can only be collected when it is gathered with the knowledge and consent of the consumer—and only used for the reasons for which it was gathered.

Despite these data challenges, marketers and strategic planners have found effective ways to understand customer needs and create actionable customer segments. These insights and best practices—while particularly germane in Canada—are relevant to anyone looking to improve results by targeting more effectively.

Today’s leading solutions begin with geo-demographic clusters. While cluster segmentation strategies have existed for decades, contemporary clustering methods use robust statistical data and advanced analytical power to capture, create and measure more precise customer segments based on geography, demographics and lifestyles. With the right data and analytical tools, organizations can characterize the behavior of every clustered customer—from their favorite movies and foods to their preferred attire and avocations—enabling users to more accurately predict customers’ responses to every campaign.

Professionals in retail, financial services, media planning, real estate and restaurants, among others, rely on cluster segmentation to improve decision making and business results. Yet with the enhancements made in recent years, some marketers have yet to incorporate the latest advances which can boost overall performance. In speaking with experts across Canada, we’ve identified a series of best practices to help guide your next steps.

Segment by neighborhood, not postal codes. Some segmentation strategies rely on postal codes, which can lead to problems down the road. Each month, as many as 5% of the roughly 850,000 six-digit Canadian postal codes change, as Canada Post updates this system solely on the basis of their mail delivery needs. Not only does this taint campaigns in the short-term, it makes it nearly impossible to manage year-over-year modeling and analysis.

The best neighborhood segmentation clusters begin with census data at the dissemination area levels—which are the lowest levels for which reliable census data are published—providing hundreds of reliable data variables. In addition to data accuracy, these neighborhood-based models offer year-over-year consistency, so marketers can build on past success over time.

Incorporate household-level insights. This past year, leading cluster models have found ways to use more comprehensive household level data, incorporating consumer information that goes far beyond census findings. These inputs, which conform to Canadian privacy laws, represent an unprecedented level of detail and behavior-based data—and create a more high-definition view of customers and prospects.

Maximize data points. Not all household level data is the same. Some cluster models are built extrapolating data from as few as 8,000 surveys across the full population of 33 million Canadians. More reliable cluster models will analyze self-reported data from as many as 10 million individuals—providing for more accurate targeting and a lot less guesswork.

Overall, organizations that employ these best practices will benefit from a multidimensional framework that makes it possible to sort through the complexity of Canadian consumer culture without having to manipulate literally hundreds of census and survey variables.

One such solution is PSTYE HD, the Pitney Bowes Business Insight segmentation system created using an innovative two-step clustering process. The 59 clusters identified, including Canadian Elite, Joie de Vivre, Urban Verve and Next Gen Rising, leverage the largest and most robust repository of Canadian consumer intelligence to date—making it easier for organizations to locate new opportunities, connect with customers and communicate more efficiently.

Learn more about PSYTE HD at www.pbinsight.com/psytehd. As always, we look forward to your feedback!

Notes from the ICSC Research Conference 2009 in Phoenix

Published on October 29, 2009 in Devon Wolfe. 0 Comments Tags: , , , , , , , .

Devon Wolfe, Pitney Bowes Business Insight

About 170 researchers and industry professionals gathered in Phoenix for the annual ICSC Research Conference, which is a gathering that has always been part networking, part content. The numbers this year were down considerably from years past, but the group was still spirited and engaged.

The ICSC group has long been dominated by the department store and shopping center research departments, yet this year, the higher numbers of attendees were from value, low-price point retail, just as we’re seeing in the sales results posted by various chains. Drug stores, dollar stores, and discount apparel were all well-represented. The conspicuous absence was big-box specialty retail. Very few attendees came from that segment of the industry, likely due to the slowdown in large store construction.

Instead, many operators I talked with are opportunistic and looking for great deals in the marketplace, while the developers and shopping center owners are hoping that the coming commercial mortgage-backed securities (CMBS) storm doesn’t wreck the rest of their business. Economists presenting at the conference were quick to point out that while we’re nowhere near recovery at this point, it’s inevitable that things will start to pick up within the next year, but slowly. Even though we want to think that this recession is drastically different than all others in the past, it isn’t necessarily. In the past, just as today, job recovery tends to follow market recovery, which of course means that it’s going to take a while for retail spending to recover completely.

On the methodology front, one thing to watch and prepare for is the 2010 U.S. Census, which has the distinction of being the first where the American Community Survey (ACS) will replace the long form in its entirety. Without listing all the details here, the important thing to remember about the ACS is that it uses sampling gathered on a periodic basis at different levels of geography. This means that while state level information will be reported annually for the previous year, block group information is reported each year for an average of the previous 5 years’ surveys. Sound confusing? It will be. We at PBBI are working on solutions to help take the guesswork out of using these data. Stay tuned . . .

In the meantime, we welcome you to download a free whitepaper on the impact the ACS can have on your business.  We also encourage you to visit the census website for more information on the ACS.

The Value of Fielded Evaluations in the Site Selection Process

Published on October 27, 2009 in Ed Borden. 0 Comments Tags: , , , , , .

Ed Borden, Pitney Bowes Business Insight

Do you ever miss a football game, but read the stats after the game and say “wow, that was a pretty close game – final score 23 -21”. However, if you had actually seen the game in person you would have realized that one team dominated the game for three quarters, but only by a series of miss steps, did the second team have the ability to win the game at the last minute. We see this happen every weekend in the fall – the stats and numbers alone do not provide you with the full flavor and scope of the game… who was better or was the victory deserved. This is similar to the site selection process.

Far too often, businesses are so focus on the numbers, demographics/psychographics characteristics, traffic counts, distance to the nearest competitor, etc. that they do not value the intangible, qualitative aspects of a potential site that can only be garnered from an impartial fielded site evaluation. Even if you are visiting a proposed deployment site for a day, you can gain true insight for answering the questions:

  • How good is the ease of access and traffic patterns around the proposed site?
  • Do the surrounding neighborhoods appear to be trending up or trending down (are the homes well maintained or are there foreclosures)?
  • Are there demographic barriers to the site? – “don’t be caught on the wrong side of the tracks”
  • Do the surrounding shopping centers appear to be stable or are they losing retailers (especially national nameplates)?

Because of this intangible, difficult to generate in-house data, we believe that an impartial fielded evaluation of the site should always be conducted. This fielded evaluation can be done by either an outside organization or by an in-house research team. Too often field evaluations are left strictly to the real estate teams, who may not be completely impartial, as they typically have a vested (and compensated) interest in the new deployment (whether successful or not). Our organization has done fielded evaluations for many, many clients and has effectively seen most of the US and Canada, consequentially we have market knowledge that others do not and we can better judge one site versus another more objectively.

Whether you are opening a retail outlet, restaurant, bank or health center, in these challenging economic times, when it is so crucial that new units open to plan, there is real value in paying the relatively low cost of airfare, lodging and time for an impartial professional, either internal or external, to see the site and provide the “flavor” of that site to the forecast, and not to just rely on the in-office generated numbers.

TransPromo: Drive Results with Behavioral Marketing

Published on October 19, 2009 in Leslie Nogue. 0 Comments Tags: , , , , .

Need a powerful marketing tool that enhances operational efficiencies? Need to increase revenues and generate a stronger return on your marketing investment? Leveraging customer behavioral data to drive TransPromo, offers the ability to increase campaign effectiveness while adding value to the customer relationship.

So, join us for a free webinar on Monday, October 26, 2009 at 1:00 pm EDT and learn more about transforming your transactional statement into a powerful marketing channel. This session will help you identify which customer information to leverage in your statements and how to append data to increase relevance of the offer. Also included in this presentation are pertinent examples of the creative and strategic opportunities available to marketers. Register now

Recommendations from PBBI’s Predictive Analytic Practice Leaders

Published on September 4, 2009 in Leslie Nogue. 0 Comments Tags: , , , , , , , , .

The July edition of Response Magazine features an article by Al Beery and Brian Hill, Practice Leaders in Predictive Analytics for Pitney Bowes Business Insight, on the importance of companies gaining a better understanding of their target customers to enhance their marketing campaigns. The resulting article highlights the benefits of location intelligence through the use of demographic, psychographic and macroeconomic data to help companies make smarter, more strategic decisions.

For more on the recommendations from our Predictive Analytic experts, visit Response Magazine.

Response Magazine is a monthly publication geared toward professionals involved in all facets of direct response marketing (circulation: 18,626)