The report on how much money local consumers spend in out-of-town sales, or leakage, on the City of Bishop is complete and the numbers are in. The report also spotlighted why locals shop out-of-town.
Aaron Farmer of The Retail Coach gave a presentation to the Bishop City Council and many attendees on Monday on numbers and the results of a recent consumer survey.
The presentation and findings on the report were met with some reservation and apprehension by many in attendance. There was also questions of what good use the data will be, such as psychographic information, for local businesses.
Farmer started his presentation with simple numbers. He explained, that there is an estimated $311 million in potential sales for the city, but only $162 million is being spent here. This leaves $149 million in non-local sales, or leakage. There were many sighs and comments from the audience like, “I can’t believe it,” and “Its hard to get my mind around those numbers.”
Farmer explained that the potential sales figure is an estimate based on the number of consumers in Bishop’s retail trade area, the average per capita income and average spending habits of Californians. This retail trade area extends from Lone Pine to Tonopah, Nev. to Lee Vining and has more than 28,500 people.
The numbers for sales are factual data based on credit card, rewards/discount card and other retailer information.
Farmer said that knowing a trade area, its demographics and psychographics, is key to businesses and retailers knowing what customers want. He added that Bishop’s trade area is huge.
Farmer defined psychographic information as, “demographics on steroids.” Psychographic information uses basic demographic information, such as age, race, income and factors like lifestyle choices and behaviors, and media habits. He said there are 56 psychographic categories.
Psychographic information gives a much clearer picture of what certain consumers are more apt to spend their money on. The method breaks consumers types into 56 categories, each with its own set of spending habits and demands. “Its helpful to determine who your customers are,” and what they want, Farmer said.
The information from the trader area came from the results of 497 completed surveys from Jan. 7. Farmer added that the number of surveys for such a small population was exceptional.
Other information from the surveys revealed what local customers want, or are not getting from local retailers. Farmer said that two most stated complaints about area businesses was a lack of customer service – those simple greetings when entering an establishment and a “Thank you” after a purchase – and shopping hours.
Farmer said that nearly 75 percent of retail purchases are made between 7 and 11 p.m. and there are few stores open in Bishop after 5.
And, the fact that many respondents said local prices, for nearly everything, are too high, seemed to come as no surprise to the smirking audience.
All of these factors and many others, lead to leakage. Farmer said that 20 percent of respondents spend more than 50 percent on purchases out-of-town.
Farmer said there was leakage in every retail sector from restaurant visits to car sales, with exception of sporting goods. He said sporting goods was the only sector where there was no leakage, probably due to tourist trade, but there is still potential for selling more.
He said if local retailers could get people to shop just one or two more times a month, locally, it would make a huge difference.
The Retail Coach has also produced hand-outs of each retail section with potential and actual sales figures that can be made available to potential incoming business.
It was then time for questions and comments from the audience.
Self-proclaimed long-time area businessman Skandar Reid asked Farmer how retailers are to use psychographic information in their stores.
Farmer replied that this information, available in detail from the City of Bishop’s website, www.ca-bishop.us , will help retailers stock their shelves with what these groups want to buy. Farmer said he had visited one retailer in Bishop that had stock more than 15 years old.
Farmer also answered questions concerning the method of obtaining the numbers used, defining exactly what the retail trade area and the potential for sales figures was compared to the greater Bishop area, the actual sales figures, as well as clarifying some details in the report. For example, there were zero sales in the liquor category. Farmer explained there is just one liquor store in greater Bishop area and that all other stores that sell liquor report those sales as general merchandise. To report the sales of the only liquor store in town would be to reveal the otherwise confidential sales figures of that single business.
Alan Pietrasanta, a former local business owner, said that the information needs clarifying as some of it, such as the liquor sales category, could be misleading. He said that he would like to see historic information incorporated into the data to produce a fuller, more precise picture for the hand-outs.
The issue of Internet sales was brought forth by several in attendance.
Farmer had a suggestion and said that if he was a retailer he would have his computer right on the front counter. To get a jump on Internet sales, Farmer said he would use the Internet as a purchasing tool himself to tell customers when he could get them whatever they wanted and for how much.
The complete Retail Coach report and further psychographic details are on the City of Bishop website at www.ca-bishop.us .