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Saturday, June 29, 2013

Is the Media as Good as the Site Selection?


Last Thanksgiving, I spent in New York City. On Thursday morning, while waiting for all of my family members to arrive, I took a stroll through a few very toney residential neighborhoods in Brooklyn. I turned a corner and saw a line waiting outside of, you guessed it, a Starbucks. Not having had my java jolt that morning, I joined the line. After about 60 seconds, the marketer in me began to come alive even though I was still waiting for my initial caffeine pick me up of the day. As I looked around, I felt as if I were on a movie set. Everyone in the crowded Starbucks and the line outside looked great. Okay, more than that. They all looked like millionaires. Every one. People were dressed carefully and fashionably and the crowd look quite healthy.

Amazingly, the line moved faster than most Starbucks queues that I have experienced over the years. What stunned me about that was that I appeared to be the only person there who simply wanted a tall coffee of the day, black. Everyone else, and I mean everyone, had complicated instructions about their orders but the baristas all handled it with smiles and amazing efficiency.

It was warm day and so I stood outside and people watched for a bit. Every few minutes a Land Rover or other deluxe SUV pulled up and a very well turned out teenager or young adult hopped out of the back seat and joined the line. After Mom or Dad drove the big gas guzzler around the block a few times, the youngster emerged with several drinks, hopped in the car, and the family headed off to grandma’s in Connecticut or Westchester County. The talk around me near the sidewalk was about markets and multi-million dollar apartments.

The next day I returned. The place was a bit less crowded but the clientele looked the same although slightly more casual in that it was not a work day or special holiday. I was impressed but not surprised. Successful companies such as Starbucks have all become very good at site selection and tend to staff their locations with people who can handle the nuances or demands of a high maintenance customer base.

If you ever look at retail locations closely, you will find that cultural considerations are very instrumental in the selection process and that the big marketers capitalize on their understanding of them. For years, Whole Foods would never tell me their secret sauce but their annual report would literally tell people that they “wanted 200,000 people within 20 minutes of the location and a large number of college-educated residents.” You can be sure can be sure that they look at wealth levels and gentrification as well. Consumer Behavior theorists often say that, “you are what you buy” but in many cases that should read you are what you CAN buy. If you live in a rural county on the Great Plains, there will be no Starbucks, Whole Foods, or Trader Joe’s within striking distance.

There are 3,141 counties in the U.S. and nearly 4,000 Wal-Marts. Yet, every county does not have a Wal-Mart and some do not have a McDonald’s unless there is a heavily traveled interstate highway that runs through it. Density is key and culture drives what kind of retail can operate successfully and profitably there.

All this leads me to a media issue that is often ignored. Some players such as Starbucks, Whole Foods, and Trader Joe’s do far better in moneyed suburbs and towns with universities than anywhere else. Dozens of other retailers have similar patterns. Does their media fit their audience or trading areas? A few media planners tell me that the efficiency of network broadcast covers the issue. I remind them tactfully that a large portion of the country lives far from their locations and are the network TV and cable impressions that you are piling up often reaching people who cannot get to your locations even if they would love to shop at them?

This issue is very real. Local cable and radio, and to a lesser degree, broadcast TV, has a role to play here that too many people overlook. McDonald’s does a great job of covering their consumer base. Some would say that Whole Foods and Starbucks have cult status and do not have to advertise or can get by on much less than most players. Agreed.
However, what of the hundreds of other players who should be doing more locally and skewing impressions from all media types against the real trading areas of their clients locations? The agencies need to take the lead on this. Radio stations and local cable interconnects have the solution but they cannot know about the sales data for many national retailers and brands. And, on line and mobile allow for messaging of all sorts in fairly tight trading areas. How well are they being employed locally? It takes a bit more work than a standard media plan. The rewards are more than worth it.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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