New babies are an expensive business. A new baby needs a huge amount of kit: nappies, baby-grows, baby food, pushchairs and cots are just the start. But some newborns sport designer babywear, travel in the latest baby transport technology and enjoy organic baby food. Between 1998 and 1999 1.3 million babies were born in the UK. Almost 500,000 of these were considered by retailers to be “upmarket offspring”. For companies selling the vast array of baby products available, finding out where these affluent babies are being born could be vital.
Organisations have been using data from geographical information systems (GIS) as a means of targeting potential customers for the past 20 years. But using birth and death data as a means of targeting an audience is relatively new.
SPA Marketing Systems consultant Donna Curtis says: “It’s something that has only started to be used quite recently, but retailers are beginning to recognise the benefits of knowing how many births there are in an area. Such information is invaluable when making strategic property and marketing decisions.”
Birth data supplied by GIS experts such as SPA Marketing includes the number of children born in a specified area, the father’s occupation and the mother’s age, both of which reflect the family’s affluence. Young mothers tend to be less affluent than older mums.
“For retailers considering a segmented strategy, the distribution of well-off families is key, particularly for the likes of Marks & Spencer and Mothercare. This means they can place their outlets in the right place and the right products in the right stores,” says Curtis.
Don’t overdo it
High-street retailer Mothercare, which has 252 stores throughout the UK and a £509m turnover in 2000/1, uses birth data as part of its new store planning process. But it does not analyse where the upmarket children are being born and use that information as part of a ranging strategy. “All our stores contain a cross-section of products, from value goods to luxury items. Our customer base is from a cross-section of socio-economic groups. Over 90 per cent of new or expectant mothers visit our stores for advice or to buy products,” says the company.
Toy retailer Early Learning Centre, which has 217 outlets throughout the UK, employs a similar strategy, using GIS birth data as part of wider research when considering new store locations. Its strategy depends on the size of the store rather than targeting products at certain socio-economic groups.
The company also has a presence in 50 Debenhams stores and 320 Sainsbury’s supermarkets. Both chains have used birth data to discover where there is a high birth rate and then invited Early Learning Centre and children’s clothes retailer Adams to open in-store outlets in their shops. “The arrangement is beneficial to everyone,” says Early Learning Centre PR and promotions manager Katharine Shester-Jones. “It allows ourselves and Adams to have an extended high street or out-of-town presence, enables our two partners to provide a complete offer to the customer and obviously gives the customer more choice and less hassle.”
Supermarket giant Safeway uses GIS data, including birth statistics from research company Laser-scan, to decide what individual stores need to stock and where in-store demonstrations and mother and baby facilities are appropriate.
And rival Asda is a keen user of GIS firm MapInfo’s data as a method for finding new store locations. The supermarket, which has 246 stores in the UK, is building nine new stores this year, moving four and extending six. It uses GIS data to ensure stores are situated in the right location, meeting customers’ needs and ensuring profitability. GIS data was an important factor in the planning process for the new Asda store in Hyde, Manchester which opened in July.
Asda property systems manager John Atkinson says: “It’s important that our customers’ needs come first – by using a combination of the number and type of people who live within a 15-minute drive time of the site, we were able to establish the size and type of store needed and what products should be stocked.”
Find out about the mums
Finding out how many affluent babies have been born in a certain postal area is useful to childcare agencies, nanny services, au pair registers and private nursery schools which are either setting up a new service or targeting potential customers. “Having data about mothers’ ages is very useful to us,” says the manager of a London childcare agency. “Older mothers have usually had a career before having children and are more likely to return to work after maternity leave and require childcare. For younger mums it may not be economically sound for them to return to work as they don’t have a high earning power. We therefore target more mature mums by direct mail or by advertising in the local press.”
Manufacturers also use birth statistics to advise their distributors and retailers where to market and how much of a particular product should be on the shelves, says Curtis. “It allows them to go into a store and say: ‘We want more of this product of ours on the shelf’. They can back up their demands with GIS data.”
And using birth data is not confined to those selling baby products. It is useful to many different industries. Estate agents target families with new born babies by direct mail as they anticipate that they may want to sell their property in the near future and find something bigger for their increased family. “Knowing that there is a baby boom in a particular postal area is an excellent reason for us to set up a new office or market our services to those potential customers,” says the manager of one North London estate agency.
Central government and local authorities also use birth data. “Most local authorities analyse birth statistics to see how many school places they’ll need in five years’ time when the newborns are of school age,” says Peter Dorrington, business solutions marketing manager at software company SAS Institute.
But birth data is only half the story. Marketers and planners also analyse death data.
Assurance companies use death data to target potential customers. Take-up of pre-paid funeral plans is higher in areas with a high death-rate. Planners for nursing and residential care, both private and public sector, also use this information.
Bring out your dead
Decisions on where to site funeral parlours often rely on death data. It also affects the types of services on offer, for example, the Co-op is introducing an alternative funeral service for younger people and is following death data statistics to discover where there is a high youth mortality rate.
Again the public sector has a key role to play. The NHS studies birth and death-rates across the country to determine where to situate particular hospital facilities such as maternity and children’s hospitals and geriatric and palliative care. “They’re not going to build a big maternity hospital in Cornwall or the south coast – traditionally areas with high death-rates and a large proportion of elderly people, and situate a geriatric home in Richmond, London – which has one of the highest birth-rates in the country,” says Dorrington.
Now that local authorities outsource many functions, service agencies also use birth and death data. Catering companies supplying schools use birth data to see if school meals are going to be a growth industry over the course of their contract. Similarly companies supplying meals on wheels to elderly people, and recruitment agencies seeking nursing home assistants, would analyse the trend in death rates to ensure that their market will continue to thrive.
The price of knowledge
But while the idea of using such statistics is attractive and potentially very useful as a marketing tool, cost is a barrier. A local nursery school is unlikely to have the budget to use GIS statistics. But Dorrington argues that, as more information becomes available, companies will be able to get it from alternative, cheaper sources. Birth and death data from the Office of National Statistics is already available free of charge and census information will be available within two years.
Claritas UK director of strategic alliances Alex Simonson agrees: “As the price of GIS systems continues to come down, they are becoming accessible to more businesses. You no longer need to be a large corporation with tens of thousands of pounds to spare to use GIS for a wide variety of planning and decision-making tasks.”
He questions whether birth data is really a valuable marketing tool. “For some companies the use of birth data to look at birth-rates can be interesting but will only be one of a number of key variables which will be used to market baby products. If you are marketing a product specifically to mothers, there are more direct ways of targeting this group, such as using direct mail to known mothers or by offering incentives to existing customers who introduce their friends.”
Simonson is even more sceptical about the value of death statistics: “I can see no real reason for marketers to use death data. For the most part using demographic and lifestyle data such as age, marital status and household composition will enable a company to target people effectively. Birth and death statistics are best left for the Government to do their planning for the distribution of health services.”
But other experts are more positive. “GIS data gives companies a competitive advantage,” says Dorrington. “It is gradually becoming more important as companies strive to succeed in an increasingly competitive environment. Making sure your store is in the right location for the right customers is key to business success, especially as the Government becomes more stringent about planning applications for large stores.”
Whatever the pros and cons, knowing more about customers is valuable to any marketer. The market for baby products is highly competitive and will continue to grow as women have more children and have them later in life, when they have a higher disposable income. Companies using birth data as part of a marketing strategy have the potential to achieve rich profits from these affluent baby boomers.