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National Decisions Systems Culls Needles From Haystacks Using Census

February 16, 1988|ELLIOT KING

ENCINITAS — Finding a site for a new regional mall used to be easy.

"All you looked for was a place where an interstate highway was going to intersect a large local street and buy 100 acres of land," said William A. Speer, manager of market research at The Hahn Co., the La Jolla-based developer responsible for Horton Plaza, University Towne Center, North County Fair, Parkway Plaza, and more than 40 other shopping malls around the country. In those days, nearly every project was a slam dunk, a sure winner.

But those days are over. New freeways are not being built. Land is too expensive. "You have to look for niches and overlooked opportunities," Speer said. "It's like looking for a needle in a haystack."

Turning to Computers

To find the needle, Speer relies on computerized demographic and marketing information supplied by National Decisions Systems, a 9-year-old company based in Encinitas which has emerged as the leading player in a new industry--the commercial integration of demographic and marketing information. Six suppliers compete nationally.

"These companies buy the U.S. census and then allow users to carve the country up any way, shape or form they want," said Martha Riche, senior editor of American Demographics magazine. "Using statistical models, they estimate what the census would be if it had been taken that year. And they add other databases to their information.

"The very existence of the information," Riche added, "is revolutionizing the way that people do business."

For example, for a regional mall, Hahn wants to find areas with 60,000 to 100,000 households representing $2 billion in household income within a specific geographic radius. The NDS software can find them. Hahn wants to spot competitors who got there first. The NDS software can locate them.

Hahn planners want to know an area's population distribution; where do the Nordstrom shoppers live, where are the K mart customers? The NDS database can tell them. They like to know how many people are around the site during the day and how many at night. The NDS software knows.

Once the mall is built, the need for information doesn't stop. Potential tenants want to know how many children in what age groups live near the proposed mall; the number of two-income families; how many teen-agers own BMWs. Nike may be curious how many triathletes with Adidas running shoes live within jogging distance. The NDS system can figure it out.

Knows All, Sees All

Indeed, argued H. Michael Stansbury, founder and chief executive officer of NDS, his company's two software products, Infomark and Vision, know more than who people are, where they live and what they buy. "As frightening as it may seem," he said, "we can forecast what people are going to look like demographically 15 years from now, where they will live, what they will buy and how they will eat."

Three car manufacturers, Stansbury said, have already altered the designs of their next generation of cars according to the National Systems forecast.

How do National Systems and its competitors know so much? The bulk of the demographic information they package and resell comes from the United States census. The industry was born in the early 1970s, after the Census Bureau offered the 1970 census on computer-readable tapes.

"Before 1970, there was no good way to analyze the demographics of a local area," said James Paris, senior associate at Urban Decision Systems of Los Angeles, the first commercial demographic information company.

UDS was founded in 1972 by several urban planners. Among its first jobs was to provide demographic information for the reapportionment of California State Senate districts.

National Systems entered the market in 1979. Since his graduation from San Diego State University in the late 1960s, Stansbury had consulted with large retailers, advising them where to set up new locations. Jack in the Box was one of his early clients.

At first, National Systems sold what is called "vanilla demographics." For about $50, a client would receive all the census information for a given area.

By 1982, Stansbury realized that simple census information would not be enough. "We were on the edge of an information explosion and I wanted to be in on it," he said. "I wanted to be a client's single source of demographic and marketing information. I wanted to help them find a location, target their customers better, aid their strategic planning and guide their advertising and marketing."

To do that, he began to systematically integrate and cross reference new data bases to the census information. He added the 8 million businesses, including their addresses, tracked by Dun & Bradstreet. He did the same for shopping malls. "I can give you a map of all the bank branch offices in a specific neighborhood," he said.

The maps include all major streets and highways. And because all the information is coded by latitude and longitude, a customer can create a detailed area map of virtually any shape.

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