Tracking the customers

As we prepare to face 2012, let’s glance at the recent past to get some perspective. How’s July 22 sound? Good, I hope. That’s the date my column noted that government spending is not just the largest segment of Commonwealth economy, but it’s actually the majority of the economy. In fact, it comes to 51 percent of the CNMI economy. As large as that number is, it understates the fact, since much of the other 49 percent is actually government money flowing into the local stores in sort of an “echo” effect of government expenditures.

For the business community this information is valuable. After all, from my experience, government-based economies are extremely predictable at the street level. We can therefore cook up a list of businesses that are likely to have a strong demand on Saipan. Of course, that doesn’t mean that every such business will be viable, since the market might be saturated in any given niche.

I worked for a company in the states that had retail stores in what were basically government-supported areas, essentially non-tropical versions of the Saipan economy. We were always scouting for new locations. We’d pay all sorts of money for demographic information so we could find the best places, and I had to crunch the data. But I preferred street reality to mere statistics, once I noticed that the same types of stores were prominent in every single area where we had a presence.

Like a hunter seeing tracks in the woods, I regarded these stores as signs that our target market was in the area and was spending money there.

Mind you, I’m not trying to build the ideal conceptual neighborhood here. I’m just relating what I saw. I’m not a dreamer, I’m just an analyst. Anyway, here are the most common businesses I recall noting:

* Fast food restaurants: Sometimes, from a single vantage point standing on the sidewalk, I’d be able to see a half-dozen fast food places.
* Doughnut stands: I don’t have any idea how the economics of doughnuts works. But I guess those quarters and dollars must add up pretty well, judging from the ubiquity of these shops.
* Convenience stores and liquor markets: It’s probably sloppy to lump these into the same category, but some convenience stores sell liquor, and some don’t, so, well, there you have it.
* Beauty parlors and nail shops: Seemingly everywhere.
* Used cars and auto repair shops: Oddly enough, though I tallied many such places, I noticed that gas stations seemed to be less common in these neighborhoods. I still haven’t solved this riddle.
* Dental clinics: There’s always a demand for dentistry, and even people who don’t show up for regular checkups will want attention when a tooth is causing pain. Managing such a practice successfully requires solid knowledge of insurance billing and of the relevant government programs.
* Pawnshops and “payday” loan stores: Some payday loan stores in the states are large, highly-sophisticated chains. As for pawn shops, they must be an international phenomenon, since the related character was on one of my Chinese tests. Now if I ever run out of money in Taipei I know what to do!
* Gambling: Be it off-track-betting or lotto ticket sales, I noticed that gambling seemed highly popular in our target areas.
* Taverns and nightclubs
* Furniture and appliance rental stores
* Legal services: In our target areas I’d see more ads for lawyers than I saw actual legal offices. But the lawyers must have been somewhere, because their ads were everywhere: Bus stops, billboards, phone books, and so on.

Well, that’s my list. Or most of it, since I’ve probably forgotten one or two categories.

Still, with some minor variations for the islands, I think it’s a safe assumption that these sectors account for a lot of the consumer demand in the CNMI. In other words, that’s where the money flows after the government checks hit the local wallets.

If you’d prefer bookstores, symphony orchestras, and high-end bistros, then I’m with you in spirit, but Saipan chose its path with great determination. What we see is what we get. And I’ve seen it before, so at least there are no surprises, eh?