Understanding Urban Shoppers

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Understanding Urban Shoppers

By Tim Binder - 02/21/2018
Brian Asner

Looking for help in this area, we turned to Brian Asner, former strategy director at Neighborhood Factor, a company that helped brands build deeper connections with neighborhood residents.

How do you define the “urban shopper”? Are there different types, and how do they differ?

ASNER: We define it very literally: anyone who is shopping within the boundaries of an urban area. This includes residents who live within the city boundaries and outside commuters who enter urban areas during the weekdays. There are definitely different types of urban shoppers. However, during the weekday, we found that shoppers within a city’s central business district act similarly regardless of whether they are residents or commuters. Since they are less likely to be driving than non-urban shoppers, they have smaller basket sizes and more focused shopping intentions. In some cases, they may be looking to replenish a single item between their stock-up shopping trips.

Can you share any insights into their shopping behaviors or unique needs? What do they value most?

ASNER: While there are some traits that are common across urban shoppers, Neighborhood Factor argues that the most powerful insights come from understanding the nuanced differences among shoppers from various urban neighborhoods. Our 14,000-person survey found that neighborhoods shape and reflect the identities of the shoppers within them. This means that shoppers may have distinctly different needs and values than residents from other neighborhoods, even within the same city.

You can see this in something as broad as overall retail spending by household. It’s easy to assume that neighborhoods with higher household incomes or higher home values would always spend more at retail, but there are many neighborhood types that challenge this expectation. Neighborhoods like Philadelphia’s Nicetown overindex in household retail expenditures despite having lower incomes, while middle-class residents of a neighborhood like Detroit’s Convent Gardens spend proportionately less at retail.

How do you cater to urban shoppers? How do merchandising strategies differ in urban markets?

ASNER: To cater to urban shoppers, you must understand how the people and places in their neighborhood contribute to a unique identity. Neighborhood Factor found there are 25 neighborhood types across U.S. cities, which enables us to group like-minded neighborhoods together. For a specialty grocer in the Southeastern U.S., we used this information to guide their media targeting, messaging and featured displays in-store. We identified neighborhoods where households showed significant spending at specialty grocers, but did so outside of their home neighborhoods. We then observed that these shoppers showed above-average preference for healthy food trends. We advised the store to feature these healthier products in their targeted promotional communications and in-store displays, to sway these shoppers to consider the store for a fill-in trip.

What do product manufacturers/brands need to consider in terms of engaging with shoppers at this urban neighborhood level?

ASNER: Particularly during the weekday, retail visits are often not discrete shopping trips. They are more likely to be squeezed in during breaks or along a commute, so shoppers will exhibit a get-in-and-get-out mindset. Enhancing the efficiency of the experience through expanded self-checkout registers, prominent grab-and-go items at the front of the store, and clear navigational signage are all likely to drive satisfaction and repeat visits.

What does it mean to have an “urban store format”? Where are the best locations in urban settings for major retailers?

ASNER: The smaller store footprint, combined with smaller living spaces and smaller families, make smaller packages the best fit for shoppers. This also means the retailer must be savvier about how they tailor their product selection. Understanding the identity of the surrounding neighborhood is critical for determining the right assortment, looking for nuanced differences between neighborhoods that may have similar housing values or household incomes. Neighborhood Factor noted that the same drugstore chain in a “historically hip” neighborhood like Atlanta’s Castleberry Hill should be stocking trendier items like craft beers, “superfoods,” and LaCroix water compared to a comparably affluent, but more sprawling residential neighborhood like Albuquerque’s Quintessence.

What retailers are doing it well – catering to urban shoppers and developing effective urban formats?

ASNER: Walgreens has created flagship stores that do much more than simply squeeze into a smaller footprint. For example, their location in Chicago’s trendy, upscale Wicker Park neighborhood demonstrates a nuanced commitment to the neighborhood’s shoppers. To reflect their unique demands, this location offers unexpected amenities like a fresh juice bar, a sushi counter, and a Look cosmetics boutique. The physical space itself shows a remarkable sensitivity to the neighborhood’s history (and future). Under the guidance of Walgreens’ in-house architect, the company preserved and restored a beautiful bank building that was almost 100 years old, which had sat vacant for a decade at the neighborhood’s central intersection. The company cleverly integrated this heritage into the store’s functions, such as converting the basement bank vault into a “Vitamin Vault” that displays historical pharmaceutical artifacts alongside contemporary products for sale. CPG companies should consider how their products fit into the identity of a store like this, exploring custom packaging or promotions that show that they belong there too.

Are there any cities or neighborhoods where major retailers have been particularly successful or have met significant resistance?

ASNER: The opening of a Whole Foods in Englewood – a southside Chicago neighborhood that has faced significant challenges in recent years – is a remarkable example of a retailer overcoming initial resistance to ultimately succeed. This store held regular meetings with neighborhood residents before (and during) development to understand and transparently address any concerns. Based on this feedback, the store adjusted its pricing to accommodate neighborhood incomes, integrated locally produced products into their assortment, and made concerted efforts to hire from within the neighborhood. Many residents had skeptically resisted the gentrifying threat of the store when it was first proposed, but they have since embraced the retailer based on its serious commitment to the surrounding neighborhood.

This report on urban shoppers complements our report on urban store formats.

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