On a recent afternoon about three dozen members of the upper management team from Lowe's, the big box home improvement chain, flew from their company headquarters in the suburbs of Charlotte, North Carolina to Los Angeles. They climbed aboard a pleasantly air-conditioned charter bus. They weren’t in LA for the typical tour-bus stops; no movie-star mansions or views of the Hollywood sign.
Instead, the bus headed down a pot-holed, not-especially-picturesque street in northeast LA toward some of the city’s traditionally working-class neighborhoods — neighborhoods that have recently been changing very fast.
On the bus, everybody's necks are craned toward the windows. They've been told to keep their eye out for something. And soon enough, they spot it. A black building with the name "Habitat" painted in big white letters.
Habitat is a new coffee shop in the area. But for the purposes of this bus tour it is much more than that. It's a sign that this urban, working class neighborhood we're driving through is on its way to becoming cool. And why do a bunch of suburban box store executives care about urban cool?
Insight Immersion booklets (Photo courtesy Now Plus One)
“Last fall, we were trying to really reevaluate how we look at consumer trends and some of the shifts taking place among the consumers,” explains Tanya Franklin, Lowe's Director of Market and Consumer insights, who helped organize this bus tour. “Not just how they shop but also how they live. People moving back in to the city, and how those inner city rings are really evolving.”
Until recently, inner city rings did not show up on the radar of a mass retail giant like Lowe's. The suburbs — big generic shopping malls — those were the best bets for customers with money to spend. But the suburbs are getting poorer. And that holy grail of retail demographics, The Millennials, are flocking to gentrifying neighborhoods. Leaders at Lowe's realized they needed to get a better handle on what makes this new, affluent, urban demographic tick. Which is why they're on this bus.
“Alright guys, so take notes please!” announces a voice from the front of the bus.
It is Stephan Paschalides, who is helping his passengers get a handle on this changing consumer landscape. As they drive, Paschalides points out the window at what, to an untrained eye, might just look like a fairly run down urban street. But Paschalides is helping his passengers see it differently.
“So guys, this is an interesting mix of the old and new,” he says, passing by blocks of storefronts. Between the piñata shops and auto repair places, he counts two juice shops. “You know it's gentrified when there's juice shops,” he says.
Paschalides calls himself a "cultural insights consultant." His company, Now Plus One, takes big corporate brands like Clorox and Frito-Lay on tours like this one. “Think of us as storytellers slash translators slash guides,” he says.
He calls these trips “Insight Immersions.”
Each tour, for each client, has a specific theme – Paschalides has helped Pepsi explore “the concept of masculinity” and Purina explore the concept of “real.” And then there's this Lowe's tour — all about, Paschalides says, "the changing demographic landscape."
“The goal is to get everyone out of their comfort zone, thinking in new creative ways about their consumers and understanding culture in a different way,” Paschalides says.
And, of course, ultimately, make money. “Besides getting inspired and besides learning, it's about understanding what insights that we collect today they can take back to Charlotte that will actually lead to profitable business opportunities,” he says.
The tour stops for lunch in what is currently one of the hottest urban real estate markets in LA, and the country — Highland Park, at a restaurant called Good Girl Dinette. It's got a shiny orange counter and exposed brick walls. Paschalides describes the food as "comfort food with Vietnamese flair,” which reflects the "cultural hybridity of Southern California."
Lowe’s executives share a meal at Good Girl Dinette in northeast Los Angeles and consider the question “What role does ‘comfort food’ play in an urban environment and why do consumers seem to crave it more and more?” (Photo courtesy Now Plus One)
Then he explains to some of the Lowe’s team what a bánh mì sandwich is. The manager of the restaurant comes over, and Paschalides takes the opportunity to mine him for information.
“It's a wonderful smattering of people that have lived here since before any of us were born,” says the restaurant manager, a youngish guy with a beard, “and then newbies like me, who just moved to the neighborhood and are just yearning for something that's real and sincere. And this is about as real as you can get.”
One of the Lowe's execs jots down "Real" in his notebook. They got handed out at the beginning of the tour, with a list of questions to consider for each stop along the way. Questions like:
What role does ‘comfort food’ play in an urban environment and why do consumers seem to crave it more and more?
What about the restaurant's aesthetic communicates its culinary intent?
A couple who hosts pop-up dinners in their downtown LA loft gives the Lowe’s team a taste of the sharing economy. (Photo courtesy Now Plus One)
Troy Dally, a senior vice president at Lowe’s, knows these questions seem odd for a bunch of people in the home improvement business to be contemplating. But he takes a broader perspective. “From my standpoint, it's really getting to understand the customer outside of our world.”
The tour lasts eight hours. The bus stops at a DIY wood-working shop where they teach people how to make their own wooden spoons. It stops at a new condo development with a private dog park and a communal vegetable patch that Paschalides explains is redefining the concept of "community space."
It stops at a recently flipped house where the real estate developer explains he uses real marble and hard-wood to communicate “authenticity and integrity.”
By the end of the tour heads are buzzing with buzzwords meant to evoke what the 21st century consumer wants. Some folks are stealing naps at the back of the bus. At one point, as we drive down another street in what may or may not be an "up-and-coming" neighborhood, one of the Lowe’s executives pipes up.
“I saw a yogurt shop back there.”
"A" for effort. But the yogurt trend is kind of over.
Correction: A previous version of this story misspelled Stephan Paschalides' last name twice. The text has been corrected.