EXPERT COLUMN: Neighborhood Deep Dive

Consumer response to new store openings typically follows a pattern. It begins with a heavy spike in business, driven by special offers and pricing. You’re essentially buying the consumers’ first visit in the hope that they’ll continue to shop with you post grand opening. Over time, business invariably drops to a sustained level that’s primarily driven by what’s become your loyal customer base.

Driving that initial spike in business isn’t a particularly difficult marketing challenge. You probably follow the same approach across most stores and markets with reasonable success. Reducing the drop-off from that initial spike is the true measure of a grand opening’s success. It means not just getting shoppers in the door the first time, but also winning a relationship that keeps them coming back. We often entrust that task to the store itself -- the merchandising, services and people who work there. With the right approach, however, you can begin to build that relationship before shoppers even walk through your doors.

Smarter Investment

Selecting new store locations typically involves meticulous research into the surrounding neighborhood. Considerations include population structure, economic factors, traffic patterns, the competitive landscape and countless other factors. If you had the same depth of insight into the people who live in a store’s neighborhood – their values, passions and behaviors – you could use that to craft a campaign that does more than just trigger their first visit. This doesn’t necessarily require a bigger, more sustained investment. It just means making a smarter investment, driven by a “neighborhood deep dive.”

While this can start with data, it has to go beyond that. Data doesn’t shop at your stores; humans do. Understanding your target audience as humans will determine your ability to connect with them. Here are the basic steps for a neighborhood deep dive:

• Start with secondary research. ZIP code-level consumer data such as Nielsen’s PRIZM can provide information about consumer behaviors, shopping patterns and media preferences as a foundation for further inquiry.
• Use social listening. Social monitoring tools like Radian6 can be used to study social media posts for real-time insight into the lives of a neighborhood’s residents.
• Hit the street. If you don’t live there, visit the neighborhood and walk it. Take pictures and video. Observe the people who live there and engage them in conversation. Look for unique touch points (neighborhood-level media tactics) that can be used to reach and connect with them.
• Use your network. You, your company and your employees have an enormous collective network across all social media channels. Reach out and ask, “Does anyone know someone who lives (here)?” You’ll be surprised how quickly you can connect with and interview local residents.
• Distill and design. Consolidate the insights from all sources and use them in ideation. Make connections between the people of the neighborhood (their identity, behaviors and passions) and your store.

Connecting With Mid-City

What does this look like in practice? Last year, when Winn-Dixie, a banner of Jacksonville, Fla.-based Bi-Lo Holdings, opened a new store in the Mid-City neighborhood of New Orleans, a deep dive uncovered a variety of insights that ultimately inspired a unique direct-mail approach. Mid-City is an ethnically and economically diverse neighborhood that’s strongly dedicated to its local arts/cultural scene and its social causes. The residents’ commitment to the well-being of their neighborhood is widespread. One point of local passion that also has strong relevance for the grocery category is the Second Harvest Food Bank.

Combining these factors led to the creation of a direct-mail campaign that helped build customer relationships before the first visit. Residents received a branded reusable shopping bag that included information on the new store and its partnership with Second Harvest. They were asked to fill the bag with nonperishable food items, drop it off at the store and select a mystery gift card with a randomly assigned value. The mailer also included a grand-opening event schedule and coupons.

By combining traffic-driving incentives with one of the neighborhood’s most widely known and supported causes, the campaign created the kind of positive customer relationships that result in ongoing store loyalty. So when you break ground on your next new store, be sure also to dig deep into the neighborhood. That deep dive will pay big dividends during the grand opening and beyond.