The importance of looking at geography when analyzing declining customer counts
- When might a decline in retailer customer count and spend reflect variability in unemployment rates across the US, rather than be the result of diminished customer loyalty? Geography is not usually the first variable that is looked at when doing customer segmentation in customer loyalty research. However, with the downturn in the economy, there is much to be learned that can help explain changes in customer counts.
- Unemployment statistics released today by the Bureau of Labor Statistics, Regional and State Employment and Unemployment, April 2009, provide insights.
- It is likely that Retail will experience further softening, especially with customers in populous states with the highest number of unemployed, namely California, Florida, Ohio and Illinois.
- However, there is more opportunity to attract and retain new customers among populous states that have not been as hard hit by the recession, such as Texas, Pennsylvania, and New York, and smaller states that have fared well throughout this recession, namely North Dakota, South Dakota, Nebraska, and Wyoming (all with unemployment rates below 5%).
Pamela Toft, Ph.D.