What if you woke one day and found that everything you knew about your customers and markets was wrong? Good morning!In information-driven businesses like retailing and real estate, there’s no such thing as too-complete and too-accurate data, particularly when segmenting consumers, projecting behaviors and understanding a market’s true potential. Yet how easy it is to be lulled into a false sense of security by familiar statistical packages when there is no new yardstick against which they can be measured, and by segmentation paradigms that lead one to believe that all consumption behaviors can be explained neatly through a few dozen rigid segmentation groups. Happily, this is about to change.
In tying its data sets to the most factual and extensive demographic and consumption data available, and using the advanced statistical and innovative segmentation techniques to extend its usefulness, Asterop enables retailers to view the US market with new, more accurate, and more searching eyes. The precision, refinement and power that define Asterop’s revolutionary approach reveal a new and truer version of America than retailers have ever seen, yielding incalculable competitive benefits, now and in the future.
Companies in the US are able to leverage extraordinarily detailed and objective statistical resources, most notably the US Census Bureau’s exhaustive resources and the Bureau of Labor Statistics’ Consumer Expenditure Survey. For those seeking the challenge, all the right raw material exists for crafting complete and accurate datasets. Asterop has taken up the challenge of developing entirely new datasets for the US that, for the first time, fully leverage this wealth of raw material to present a new vision of America. Created using the latest statistical methods and validated through an independent international scientific committee, these data products finally provide the accurate and comprehensive insight into the US retail landscape that retailers crave – not just better than what has been previously available, but correct.
Asterop’s approach is three-pronged, starting with an accurate Demographic Database with current year estimates and projections. This demographic database is unique in how it ties clearly and consistently back to US Census Bureau estimates, projections and reference surveys. Coherent with the census from the national level down to the county level, the data is extended further using cutting-edge estimation techniques for an accurate demographic picture at the lowest levels across the entire country. This entails modeling the dynamic factors that are driving the phenomenon of growth across US demographics and then extrapolating the results across the entire landscape while employing advanced algorithms to weigh, adjust and ensure coherence at all aggregate levels. The result is that retailers can now make valid assumptions and lower risk decisions based on the most objective demographic data available – rather than relying on data that is at variance with the census at the highest levels, and progressively further out of touch with each estimation and projection.
Asterop has also developed a more comprehensive Consumption Database than previously available, encompassing all consumption categories covered by the Consumer Expenditure Survey, including high tech goods and services. Using the most recent consumer panel survey data – the most objective data available for understanding customer behaviors – Asterop has created a specific predictive model for each expenditure category, which when applied to a low levels of geography (i.e.: down to the block groups) enables us take into account specific spending at each level of geography, thus providing a more accurate market picture than methods relying on averaging to develop block group estimates.
The result is that retailers now have more complete and more granular consumption data (based an unprecedented 600 discrete models for each block group) that is more accurately tied to its source – i.e.: objective BLS data.
The capstone of Asterop’s approach is an innovative new Consumer Segmentation System, providing dramatically improved alignment with consumer behavior over existing systems. The premise is that consumer behavior is too complex to be explained accurately by categorizing consumers into a few dozen rigid buckets. Slicing the entire US population into set segments cannot possibly explain all consumption patterns – you may get some correlation, but not close alignment. Individuals are simply not that homogeneous in their buying patterns.
Again leveraging the BLS’s Consumer Expenditure Survey, Asterop’s answer is to create cluster sets that are tied to factual buying patterns, not to conjecture and approximations. These clusters are aligned to universes of products such as household equipment (appliances, electronics, etc.), fast moving consumer goods (food, cleaning products, etc.) and individual goods and services (apparel, information appliances, etc.). Depending on the product type, consumers can hop clusters. That’s the nature of people, and that’s understood in Asterop’s paradigm. The focus is not on fitting people into boxes to explain all buying behavior, but rather to use factual buying behavior in a discrete category to project behavior in that particular category going forward.
The result is an infinitely more flexible, insightful and useful segmentation system to greatly improve retail site selection and merchandising mix decisions – based more solidly on facts, and not surmise. With a direct tie between consumer behavior and clusters in each segmentation system, it is much easier to recognize clusters than align with a particular retail concept, which in turn makes it much easier to you look around the landscape and discover concentrations of the clusters that best suit your needs.
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