Why is Pottery Barn moving to Brooklyn Heights but not to Astoria? Why does Park Slope have numerous Starbucks while there are none in nearby Fort Greene? And why are store clerks in Williamsburg suddenly asking to know your zip code?
The one word answer is psychographics, an art/science that uses the growing mountain of consumer data now available to help retailers, and marketers in particular, make decisions about real estate.
Analysts use psychographic information to define consumer categories, which are often given colorful names such as “Shotguns and Pickups” and “Blue Blood Estates.” The results are used to decide where to locate stores, restaurants, banks and even medical facilities.
Yet while psychographics hasn’t totally won over retailers in Manhattan, its use in the outer boroughs is becoming more common — especially in changing areas of Brooklyn and Queens.
“In the last few years, studies have shown that Brooklyn has been losing a lot of retail sales to Long Island,” said Jeffrey Roseman, executive vice president of Newmark Knight Frank Retail, a New York commercial real estate broker. “For a long time I don’t think a lot of national retailers understood Brooklyn, but when they realized what was there, many began to look for locations.”
Three notable examples of national retail chains that have recently leased space in Brooklyn include Whole Foods, Trader Joe’s and Urban Outfitters, which last month signed a lease for 5,500 square feet on Atlantic Avenue.
“Hip Nation,” “Urban Elders,” and “Money and Brains” are three psychographic categories of consumers growing in the outer boroughs, one part of the reason some national chains are looking to set up shop.
“Hip Nation,” as defined by Pitney Bowes MapInfo, a firm that conducts psychographic research, is “diverse neighborhoods of minority families, hip-hop aficionados and latter-day hipsters” which “make this neighborhood a study of contrasts reflecting America’s new and old diversity.”
Brooklyn brokers say retailers like Urban Outfitters, American Apparel and Brooklyn Industries, which has four shops in the borough, are responding to “Hip Nation,” a surge in residents between 18 and 31 with disposable incomes.
Similarly, brokers say that Whole Foods and Trader Joe’s are responding to data indicating the number of so-called “Money and Brains” and “Urban Elders” — consumers with attributes like combined salaries above $150,000, one or two children with full-time nannies, who are occasional donors to liberal environment causes — has leapt in downtown Brooklyn this decade.
One place where psychographics is not so widely used is Manhattan. Because of its density and large number of daytime visitors, marketing professionals say Manhattan is, among American cities, uniquely resistant to such kinds of categorization.
“Manhattan has a lot of features that are singular,” said Brian Hill, an executive at Pitney Bowes MapInfo. “You can do psychographic research in Manhattan, but it has to be augmented with on-the-ground knowledge.”
Brokers, as well as managers charged with site selection in the borough, indicate that intuition and gut feelings continue to play significant roles when it comes to choosing retail sites.
“In Manhattan, all that stuff goes out the window,” said Roseman. “You walk out onto 34th Street and Seventh Avenue, and you get bowled over by people. You don’t care what their attitudes are.”
Sometimes psychographics works the other way: Kinko’s, the copy and office services chain, decided after reviewing psychographic data several years ago, that there was enough demand to merit tripling its Manhattan presence.
The combination of psychographics and demographics led Home Depot to open stores in New York City, according to Hill.
Although research revealed the city had a dearth of typical Home Depot customers — single-family homeowners who purchased or refinanced within the past year — demographics showed that the population density would support a big home improvement store.
“There may not be a lot of people buying shingles for their roof, but there are a lot coming in and buying hammers and nails,” Hill said.
One reason psychographics hasn’t caught on in Manhattan is that for retailers of luxury products, pinpointing locations of customers is not as difficult, according to Michael Hoffman, senior managing director for real estate at Colliers ABR, a New York City commercial real estate firm. Unless an area is overcrowded with high-end stores, deciding where to locate may not require psychographics, he said.
“Luxury tends to follow a different path,” Hoffman said.
While intuition is probably most important in siting retail in Manhattan, data about individual neighborhoods can still be useful, according John Yazicioglu, a manager at New York City-based retail consultants AT Kearney.
“I wouldn’t throw demographics and psychographics out the window in Manhattan,” he said.