Acting on consumer info could enrich businesses, rep says

Hillsboro retail businesses have free access to a wealth of information about their primary consumer market that big-name businesses pay big bucks to acquire.

But unless local businesses take advantage of the opportunity, the information is worthless.

That?s the message Joe Brown of the Buxton Co. delivered to about 20 people attending the Feb. 9 Hillsboro Cham?ber of Commerce luncheon sponsored by the Hillsboro Develop?ment Corp.

?It?s not worth the time and effort if you guys don?t actually use it,? said Brown, who drove in from the Buxton headquarters in Fort Worth, Texas. ?That?s why I?m down here, to help you implement it because I promise you will see a return on this investment.?

The investment actually was made by the city of Hillsboro, which decided in December 2007 to hire Buxton Co. for two purposes: to research the local market for the sake of recruiting viable retail and service business to the community, and to produce information that could strengthen existing local businesses.

It was the latter goal that brought Brown to Hillsboro on the heels of a snowstorm.

?Right now, the real big focus we have, working with Larry (Paine, city administrator) and Clint (Seibel, economic development director) is the business retention end of this whole project,? he said.

Collectors of information

Brown said Buxton Co. has gathered information on 112 million households in the United States.

?Every time you use your credit card, debit card or a frequent-buyer card, you leave a trail,? he said. ?Everything you do is being tracked in one way, shape or form.

?What Buxton does is acquire the best of that information. We use that information in the public sector, the private sector, to help out cities, retailers, restaurant concepts and a lot more.?

For Hillsboro, the Buxton group developed what it calls a ?retail assessment? of the community?s primary market?determined to be within a 15-minute drive of town.

It also developed a retail assessment for Hillsboro?s secondary market, which extends the drive to about 30 minutes.

The company discovered that the estimated 2,590 households within the primary market will spend nearly $92.3 million this year on consumer purchases.

It also revealed that Hillsboro businesses received more than $47.4 million of those sales. The local challenge: tapping into more of the $44.9 million in sales that are ?leaking? to businesses outside the local market.

Consumer analysis

To help that happen, Buxton develops a ?psychographic profile? of the households within the trade area. That profile, in turn, helps identify their life?style habits and consumer preferences.

?Traditionally, what we?ve seen is that small businesses look at their customers in terms of demographic terms?age, sex, race, education?and they base decisions off that information,? Brown said.

?That gives you something, but it doesn?t tell you really who those people are as consumers. It doesn?t tell you what they?re purchasing when they come into your stores or restaurants. We give you that information.

?We understand the lifestyles, the purchases made, the media habits of those consumers, and we want to pass the information on to you guys so you can merchandise, market, advertise to these types of people.?

A particular market area will have multiple profiles that apply to segments of the population. The company identifies the most dominant segments.

For the Hillsboro market, the single most dominant profile?relevant to 24 percent of the population?is labeled ?America?s Farmland,? which Buxton defines with the following umbrella description: ?Remote farming communities scattered across the nation earning middle-class incomes living in older, single family homes on large plots of land.?

Beneath that umbrella summary are host of descriptors that characterize the group?s demographics, lifestyles and media.

Based on the consumer information compiled from the market area, Buxton then identifies which kind of products are more or less likely to be purchased by local consumers compared to the average U.S. consumer.

The objective, then, for retailers is to identify the products or services local consumers are most likely to buy, then promote and provide those items with the goal of keeping those purchases local.

Tracking 5,000 products

Buxton?s accompanying list of specific products is nearly 5,000 items long and grouped in multiple categories ranging alphabetically from apparel to tobacco.

?Understanding the segmentation is way more important for you guys because that?s the kind of consumers you have readily available to you,? Brown said.

?You?re already capturing a portion of the market, and it allows you to see where some of your expansion opportunities might be, what changes you can make or adjustments you can make.?

City?s involvement

Paine said the city of Hills?boro has a vested interest in strengthening the local business community.

?We need businesses in this community to be successful in order for us to be successful,? he said. ?We do not get one more dime out of sales tax unless another product gets sold.?

Paine said he realizes the city can do only so much. It?s up to the business community to take the initiative to implement what the information reveals.

?We cannot do one thing with that (information) until the business community does,? he said. ?Until they see it, they can?t do anything with it.

?That?s what our role is today?it?s to make sure the people get it, and maybe help people understand how it works so they can make decisions about what products to put on the shelves for people to come buy.?

More from Hillsboro Free Press
USD 410 patrons will vote on new representation districts
This is the proposed change in voting-district boundaries being recommended by the...
Read More