How Columbus Became America's Test Market
Last fall, local caffeine fiends had the opportunity to sample an unusual coffee drink at their corner Starbucks. The Dark Barrel Latte, made with a chocolaty, stout-flavored sauce and topped with whipped cream and a dark caramel drizzle, created buzz when it joined the likes of its Pumpkin Spice and Caramel Macchiato counterparts. Word spread via Twitter, as it often does, and Columbus opined. Reactions were a mix of, "OMG #love @Starbucks new stout latte!" and, "Beer for breakfast? #why?" Columbus was one of a precious few places where you could get your hands on the Guinness-inspired beverage. News outlets in LA and Chicago reported about the drink, wondering when they, too, would get a taste of the intriguing concoction.
Those reactions-and the buzz-were exactly what Starbucks marketers were looking for when they slapped the drink on menus only in Columbus and a handful of locations in Florida. It was being tested in concentrated locations before Starbucks decided whether to introduce it to menus internationally. Early in November, a Starbucks spokeswoman said the jury was still out on how the Dark Barrel Latte had fared in its test. One week later, the drink was pulled from menus in Columbus, just before the latest seasonal offering, the Chestnut Praline Latte, was rolled out.
Testing new products is an essential part of Starbucks' marketing, the spokeswoman continued. It's a common practice for other companies as well, both in the food industry and otherwise.
"It's an early indication of what results might be on a national level," says Shashi Matta, a clinical associate professor of marketing at Ohio State's Fisher College of Business. "It's an extremely important part of marketing."
That we in Columbus often serve as guinea pigs for businesses, especially those in the fast-food industry, is nothing new. (Yet, as we discovered, companies aren't eager to speak candidly about it.) For as long as fast-food restaurants have been expanding their menus, Columbus has been one of the first markets they turn to for the taste test. What has changed over the decades, though, are the reasons we're targeted and the types of products and services coming here first.
Through the 1990s and 2000s, Columbus was a top test market primarily because its demographics closely mirrored the rest of the U.S., Matta says.
"It was a microcosm of the U.S., in that what happens here will probably happen elsewhere," he says. Today, marketers are looking beyond demographics when identifying test markets.
Since it was founded in 1964, Tim Hortons Cafe and Bake Shop offered only its original blend of coffee. In 2013, after nearly 50 years of business, the Ontario-based chain decided to introduce a new roast to their menu. But before rolling out their Dark Roast coffee throughout the U.S. and Canada, Tim Hortons tested it exclusively in Columbus.
For nearly a year, the new roast was offered-in hot and cold options-in all 80 Central Ohio locations before being introduced globally last August. The decision had more to do with the collective tastes of Columbus customers than with its demographics.
"In our other markets, it's coffee first, baked goods second," says Brynn Burton, manager of the chain's U.S. public relations. "In Columbus, they know our coffee but come to us for baked goods first. We took that as an opportunity to introduce people to our coffee through a new blend."
The company regularly considers consumer tastes when determining where to test new products. When they launched a new meatball panini sandwich, they first introduced it in Detroit, where the lunch menu is popular. Buffalo, New York, got first dibs on the chain's Spicy Buffalo Crispy Chicken Sandwich and Buffalo Mac and Cheese.
"We evaluate each market against each product," Burton says. Assigning test locations "has really been on a per-product, per-market basis for us."
Tim Hortons and other companies no longer choose test markets based solely on demographics, she adds. "That's not really relevant anymore. Maybe 10 years ago it was. Now, marketers are more savvy. As a brand, we dig a little deeper."
That's not to say Columbus doesn't still provide a good snapshot of the U.S. as a whole. Each year, WalletHub, a personal-finance social network, compiles socio-demographic data and ranks some of the largest metropolitan areas in the U.S. by how closely they resemble the rest of the country. Last year, Columbus ranked 15 out of 366, between Charlotte, North Carolina, and Louisville, Kentucky. Still, that rank has become less important to companies in recent years.
"I don't think marketers only look at the most representative demographics anymore," Matta says. "Savvy marketers shouldn't because there are a number of other factors to consider. There are other things that work in [Columbus'] favor."
Our proximity to major universities is a big one. "That's a really strong population here," he says. "There are a lot of young customers who will then be setting trends."
Economist Bill LaFayette points out Columbus stands out from the rest of the U.S. by several measures.
"We are better educated than average; we are somewhat younger than average," says LaFayette, owner of Regionomics, a Columbus-based economic and workforce strategy firm. "Our household composition is somewhat different than average. For example, we have a smaller percentage of family households and more people living on their own."
That's important because marketers aren't always just looking for a market that best resembles the rest of the U.S. They're looking for a certain group of people for whom the product is designed.
"In a broad brush, our market may look unusual," says Paul Carringer of Caring Marketing Solutions. "What you find within that little pie of Columbus is a variety of groups of people that do fit up well with other parts of the nation. That's why marketers lean to target markets. They're not as interested in the broad brush as they are with the specific group."
White Castle tests new products in Columbus often, says vice president Jamie Richardson. Not only does the market here tend to be representative of markets elsewhere in the U.S., but it's also close to home. White Castle has been headquartered in Columbus since the chain moved from Wichita, Kansas, in 1936. Because of the proximity to their corporate offices, "we're able to observe firsthand how well the test might be working," Richardson adds. "It's a bit more cost effective, and we have the ability to adjust quicker." When White Castle tests new menu concepts here in town, Richardson says, they're rolled out in six to eight of the chain's 23 Columbus-area locations.
When the fast-food chain, which pioneered the hamburger slider, began experimenting with veggie burgers, they chose to test them on the East Coast. So which East Coast cities were given first taste of the new veggie burger and why? Richardson says he can't share that information.
But he does share some general insight: "We test different new menu items different places, and there can be a variety of reasons," he says. "It can be related to demographic profile in neighborhoods we're testing. It's always with an eye toward the real-world learning we'll receive."
One thing Richardson can confirm is that we can expect to see those new veggie sliders in Columbus soon. "We're exploring the learning we received from testing [the veggie burger]; it was very favorable," Richardson says. "In the future, I would be surprised if it wasn't at all our locations."
White Castle isn't alone in their clandestine practices. After pictures of a new bacon cheeseburger on a pretzel bun being sold at a Wendy's in Miami surfaced on Twitter in 2010, a Wendy's spokesperson declined to confirm the test or provide details when interviewed for a story in The Plain Dealer. Later that year, Wendy's tested two cheeseburgers that paid homage to the chain's founder: the D.T. Double and Dave's Hot 'N Juicy. In a Columbus Dispatch story, a spokesman was cited acknowledging the D.T. Double was being tested but wouldn't provide more details due to "the company's policy to not divulge details of its product testing." (The Bacon Pretzel Cheeseburger and the Hot 'N Juicy eventually became national menu mainstays.)
Just this summer, two Columbus Wendy's locations were testing a new concept: build-your-own sandwiches and burgers. Customers were able to choose their bun, meat, toppings and sauces. Again, a spokesman confirmed the test but declined to provide more details.
Bob Bertini, a spokesman for The Wendy's Co., says while they test menu concepts in various locations throughout the country, "Columbus is high on the list because of the proximity [to] Wendy's Restaurant Support Center in Dublin," where corporate offices and test kitchens are located. This is especially true, he adds, with what they call "operations testing-making sure that we develop effective restaurant procedures so that our restaurant teams know how to best cook, prepare and serve [food]."
He says the concepts Wendy's develops in Columbus are often replicated in the company's restaurants worldwide. Most recently, Wendy's used Columbus as a test location for their latest restaurant prototype. In 2011, two restaurants were built in Columbus featuring a contemporary design, including a new logo, lounge chairs and high-top tables, a fireplace, free Wi-Fi, flat-screen TVs and digital menu boards.
Bertini says the consumer response to the new concept was so positive that the "restaurant design now is being used for Wendy's new builds and restaurant remodels throughout the U.S. and Canada."
Since the first Giant Eagle grocery store was built in Columbus in 2000, the chain has tested several new products and services in Columbus-area supermarket and convenience store locations, which now number 49.
"The concentration of Giant Eagle's Central Ohio stores has long made the Columbus market ideal for pilot programs," says Dan Donovan, a spokesman for Giant Eagle. He cited the chain's fuel and food discount rewards programs as an example; the program was tested in Columbus in 2007 and 2008.
When the Pittsburgh-based chain opened a Giant Eagle Market District in Upper Arlington in 2010, it was the first specialty grocery store they'd built outside their home market. Now, it's one of 11 across western Pennsylvania, West Virginia, Maryland and Ohio, including new stores in Dublin, Grandview and Powell.
More recently, the Dublin Market District location was used as a test site for Sizzling Wok, an in-store restaurant that makes stir fry, pho and pad Thai dishes to order for customers. It's now in five other Market District locations. Giant Eagle also launched its first Foodie Truck in Columbus in 2012. The food truck serves items like pulled pork and brisket at community events and festivals.
"Giant Eagle continues to review customer feedback and research gathered from the Columbus market to determine the possible expansion into other markets across the chain," Donovan says. The chain plans to expand into the Indianapolis market with Market District and GetGo convenience store locations, he says, and will continue to look toward those stores in Columbus for market insight.
Several companies-including L Brands and Houlihan's, which opened the prototype for their new national menu and restaurant concept in Upper Arlington-declined to discuss their test-marketing strategies.
But it's no secret that companies test new products before they launch them nationwide. And, as any local consumer is well aware, Columbus has been a testing hot spot for decades. So why such tight lips?
Business is, of course, a competition.
"You don't want your competitors knowing that you have something new coming," says Carringer, who teaches marketing courses at Columbus State Community College and Franklin University. "They're very cautious of those things." Fast food and fashion industries are especially secretive, he adds.
For other industries, though, buzz about new concepts is encouraged, and Columbus has become a testing ground for these, too. Take health care, for example.
"[Columbus is] on the front end of the change in health care and health care insurance," Carringer says. "If you look at what's new and coming soon, Columbus is the test market."
It's an ideal city for these leading-edge changes, he says, because it is home to strong health care systems. But also because the population here is diverse-with people who pay for private insurance and those who qualify for government plans.
In this case, buzz is good.
"If it's a consumer-driven product with competition, they're not interested in telling the world about it until they get it right," Carringer says. "In other areas, like health care, we will be a test market that will be wide open for review, comment and discussion."
Technology is another example.
When Zak Dziczkowski co-founded his tech company, Alottazs Labs, their flagship product was Garageio, a garage-opening device that can be controlled by users' smartphones. It didn't take them long to find not only willing, but enthusiastic, beta testers in Columbus.
"Columbus is one of the most supportive cities (of startups) and one of the reasons why we focused here," Dziczkowski says. The other is his company is based here. Columbus is a popular test market for the tech industry, which he attributes, in part, to Columbus' strong information-technology community.
"Columbus has a very strong IT job market," Dziczkowski says. "There are a lot of people stepping forward saying: 'I'm tech savvy. I know what I'm talking about. We want to support you.'"
"There's a variety of both in-your-face consumer goods being tested here and those underlying things that will be the drivers for our economy in the future," Carringer adds.
So if you're downhearted you missed out on Starbucks' latest treat, don't fret. Surely, it won't be long before the next new product pops up on menus and store shelves in this land of experimental opportunity.