Merchants Missing Out On Millions
FARMVILLE – Local merchants are missing out on a larger share of the millions of dollars college students spend during the school year.
Using the figure of 5,872 students at Hampden-Sydney College and Longwood University, they could possess a total combined discretionary buying power of $19 million for the nine-month academic year, Bill Baxter told Farmville Area Chamber of Commerce members Monday, based on the national average of $361 per student per month.
Baxter, Director of Longwood's College of Business & Economics Internship Program and former President and CEO of the Retail Merchants Association and of the Virginia Retail Association, said that a “pessimistic view” of student discretionary buying power could still total $9.5 million for the school year.
Even assuming local college students have only half of the buying power of their counterparts elsewhere, Baxter said, that is still $181 worth of discretionary spending per student per month, or $9.5 million annually.
But, he told chamber members, “don't get hung up” on the precise number.
“Let's just make believe there's only $100 a month discretionary buying power,” he said, “and I promise you there's more than that. For our students, this is the number I really want to look at-$587,200 per month of discretionary buying power.”
Using the nine months of the school year, even $100 per student per month comes out to more than $5 million a year. “Just the under-grad student population. And I think that's a huge number. This community,” Baxter said, “has been blessed with having two institutions close by…”
The point is that whatever the precise number, it's a big one and there is a great deal of business for local merchants that is now going begging.
According to Baxter, Farmville and Prince Edward County merchants are “not maximizing the capture” of student buying power, nor that of their parents, who should be added to the equation.
That also means local governments are not fully capitalizing on the sales tax revenue potential of those millions of dollars of discretionary spending power, Baxter pointed out.
A lose-lose situation, then, for local merchants and governments.
Merchants, he told the Chamber of Commerce, need to “work together” to create a win-win set of strategies to capture the full buying power of college students and their parents.
Too much of that discretionary spending isn't occurring in Farmville and Prince Edward but Baxter had a list of recommendations to bring more of those dollars into the local economy:
1) Merchants should gear promotions specifically to students and parents and must take advantage of that buying power when it is in the community.
2) Merchants should get together and agree on which college events to support, and then package and time promotions accordingly. Baxter gave new students arrival, parent's weekends, Homecoming, and Oktoberfest as examples.
3) Sporting events are perfect. Use baseball, basketball, football, soccer, golf, and others, with students and parents. “Sporting events create crowds,” Baxter said, “and crowds create potential customers.”
4) Retailing is not a 9 to 5 job, Baxter pointed out, and successful retailers cater hours to their customers' needs. Students and working-customers, he pointed out, trend toward shopping after 5 p.m. Therefore, extend and standardize hours during the college-oriented promotions, and do so together, he recommended.
5) Merchants should consider accepting Longwood's “Lancer Cash” and make it easier for students and faculty to become customers. “Lancer Cash” works like a debit card, he explained in his power-point presentation, with money loaded on student and faculty IDs.
6) A survey should be commissioned by merchants, Baxter said, to identify what hours of business best serve the targeted college customers and also determine what that market wants to buy.
7) Local economic developers should share in the commissioned survey, he urged, to identify business opportunities to meet the goals-an ice cream shop, hobby shop or slot-car racing venue, for example.
Baxter's recommendations weren't for merchants alone. Both the Town of Farmville and Prince Edward County, he advised, should work with merchants in these ways:
1) Ads “welcoming students and parents.”
2) Uniform “Welcome” posters in every store window.
3) Visible security.
4) Concerts and other events.
5) Authorized sidewalk sales.
6) Craft shows.
7) Farmers markets (the Town has plans for a new farmer's market downtown)
8) Wine festivals.
9) Classic car shows.
10) Bike events at High Bridge Trail State Park. How many communities, he asked, have the good fortune to have a state park going right through the middle? Take advantage of it. Some 40,000 people come to Richmond to run a marathon, he said, so why couldn't Farmville get 4,000 people to participate in a bike-a-thon?
The Town and County can also work together to identify all of the vacant storefronts in downtown Farmville and design a hypothetical “ideal mix” that fills the storefronts with businesses which cater to both “college and local markets.”
And the Town and County should create incentives and a marketing plan to attract those “ideal” merchants into the available storefronts
Customers, Baxter exhorted, “vote every day with the wallets. We all stand to win with a solid, well-executed plan. We'll surely continue to miss out on opportunities without one.”