Consultant takes hard look at Norfolk market area

By Wiley Wood

No one opens a business these days—no bank will lend money to start a business—without taking a hard look at the existing demand. “The days of ‘build it and they will come’ are long gone,” says Michael Goman. Which is where the firm of Goman+York comes in. They have access to the data.

Norfolk, banding with seven other towns in the Northwest Corner, has hired Goman+York to help energize its downtown business sector. Over the next two years, the firm will consult with existing businesses and develop a plan to fill at least one vacant storefront.

You might want a bakery or a corner store in Norfolk, says Goman, but any pitch to an investor will have to be based on fact. “You can’t just say, ‘Norfolk’s a wonderful place, come on, you’ll like it,’” says Goman. “That’s true! But it’s not going to get someone write a check for several hundreds of thousands of dollars. They will want a lot more than that.”

And nowadays, facts about people in the Norfolk trade area are readily available. Demographic data collected by the Census Bureau can be collated with transactional data from stores and credit card companies to give a nuanced picture of how people spend their time and money.

When you buy something in a store today, the sale is electronically recorded and the recording is sold upstream to big data aggregators. “So if you buy gas and go into the gas station and buy a bottle of water, all that’s recorded,” says Goman. “And if you happen to use a credit card or you’re a member of one of these affinity programs, you use your Stop and Shop card, they’re now also connecting that transaction to your street address.” Goman points out that if you subscribe to a magazine, the magazine sells that data too.

This information can produce a profile of the people in a market area and their economic behavior. Most towns are fairly homogeneous, says Goman. Their residents fall into just a handful of profiles, or market segments, exhibiting similar patterns and preferences. With these in hand, a business can start to calculate if it’s likely to find a market.

And for a bricks-and-mortar business, driving time is a factor. “How you choose your doctor, your accountant, where you shop for groceries and virtually every decision you make is at some level based on the thinking ‘How long does it take me to get there,’” says Goman, whose map of Norfolk is divided into ragged concentric rings based on the driving time to Town Hall, showing the range within 5, 15 and 25 minutes.

“I’m only going to drive 5, 10 minutes to find a coffee shop. If I want to go to Costco though, my wife is quite happy to drive half an hour,” says Goman. “Can a coffee shop expect a lot of penetration in the 25-minute driving area? Probably not.” And a grocery store in Norfolk that might draw customers from a 15-minute driving area would bisect the market with the supermarket in Canaan. “Can you really draw people here?” Goman asks. “The Stop and Shop in Canaan might win that battle.”

Goman encourages business owners in Norfolk to contact him with their questions. The data can be used, he points out, in making decisions about where to advertise, in what magazines and when.

The services of Goman+York are being paid for by a small-town economic development grant obtained by the Northwest Hills Council of Government. Michael Goman will offer a fuller presentation of his findings at a later meeting of the Norfolk EDC and begin his firm’s visits to downtown businesses in the upcoming months.