GeoInspirations: Ken Smith’s Passion for Area Research and Retail Analytics

May 2, 2018
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Editor’s note: Thank you for joining us for this edition of GeoInspirations. Today our distinguished columnist, Dr. Joseph Kerski, features Dr. Ken Smith, who approaches geography from an extensive background in academia and retail analytics.

About a decade ago, during my involvement with the Applied Geography community, I met Dr. Ken Smith. Through attending his many presentations and talking with him during these past 10 years, it became clear to me that he has been a longstanding leader in the application of geographic thinking to retail and business decisions. He has held positions with several businesses that would be immediately familiar to just about anyone. In my view, these applied geographers are some of the real heroes of our time — making communities and our world more vibrant and economically healthier. When I think of the responsibilities that Ken has had, dealing with millions of dollars and parcels of land all over the country, I am amazed how calmly he talks about it all. But, I won’t give it away — I’ll let Ken tell the story. It is my great pleasure to introduce Ken to Directions Magazine readers and, through his story, inspire you to apply geography to the problems about which you are passionate.

I asked Ken to describe his unique and fascinating background in both academia and business. He replied, “After teaching at Virginia Tech as a founding member of the geography department faculty from 1973-1979 and then continuing a long career in area research at Dayton Hudson Corporation, the May Department Stores Company, Federated Department Stores (Macy’s), and JCPenney, I consulted with real estate developers from 2012 until my retirement in 2017. Currently, I volunteer to help job seekers by participating on a weekly practice interview team staffed by former executives and career coaches. I also participate and lead sessions in annual Applied Geography Conferences to stay in touch with the university and business community as well as former colleagues. I guest lecture at local universities.”

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I asked Ken what convinced him to enter these fields. He said, “I trace my academic foundation to coming from a family of teachers who loved their subject matters and disciplines and modeled lifelong learning, teaching, and mentoring. I thought that I, too, would become a social science secondary teacher and took an obvious path to a college where my father spent almost his entire career as a music professor, Bethel College (now Bethel University), in St. Paul, Minnesota.”

“At Bethel I focused on a broad liberal arts education hoping to find my major. That took over two years. I began as a math major but shifted into the social sciences largely due to its broad subject matter and fine professors. No geography major was offered at Bethel, but [I] sought professors who were good mentors as well as model teachers. One professor, Robert Underwood, happened to be a geographer! Eventually I chose geography because it combined my fascination with maps and places, exploration and discovery, history, and the social sciences. I thought I would study geography to become a regional expert of perhaps Eastern Europe or the former Soviet Union.”

“I knew that I needed further graduate education. Entering the graduate program in geography at the University of Minnesota, I was clueless about how geographers “do geography” but wanted to learn. I soon discovered that I had landed fortunately at one of the most prestigious and comprehensive departments in the country. Graciously, several professors directed my path through master’s and Ph.D. requirements while I was simultaneously enrolled in a USAF ROTC program.”

In terms of what inspired Ken most during his career, he said, “Several professors stand out, particularly for their emphasis on field work and scholarship. Professors Cotton Mather, John Fraser Hart, and John Borchert instilled in me the importance of conducting fieldwork in any study of most geographic topics. That made perfect sense, amplifying what I might have read earlier; helping me use maps as tools to better understand and enjoy the cultural and physical landscape; and focusing on the key research issues. Professor Mather and I toured northern New Mexico, which eventually resulted in my Ph.D. dissertation on the western skiing industry in 1974. At the University of Minnesota, most Ph.D. graduates were expected to be ready and able to teach introductory courses in physical, human, and economic geography. That well-rounded background was helpful as I prepared new courses at Virginia Tech. At Virginia Tech, I also received excellent guidance from excellent colleagues, particularly a fellow University of Minnesota alum, Arnold R. Alanen.”

“This academic background set the stage for a career in Applied Geography, or more specifically, what the retail industry terms, “area research.” Initially I thought this retail research experience would be an interlude in my university career, but it became my career, spanning over three decades. During that tenure, I traveled to nearly every major market in the U.S., many for multiple times, as well as retail centers in Canada, Australia, and Malaysia.”

“A spatial or geographical approach to market analysis and fieldwork (for example, reviewing metropolitan areas, trade areas, and sites, and finding local data sources) is foundational for new store sales forecasting and retail strategy. One of my most memorable early studies was a major market entry strategy by Target into the Greater Detroit metropolitan area, a stealth project of over two dozen recommended new stores following over four weeks of field review “under the radar” in the hometown where Kmart was headquartered.”

“Geographical analysis, therefore, has proven to be a key ingredient for retail site selection and market analysis. It was a hallmark of the Area Research and Planning department at Dayton Hudson Corporation under the leadership of Larry Carlson, also a University of Minnesota geographer, and my first boss. Geographical analysis leading to Area Research sales forecasts became a key component for Dayton Hudson in senior management’s store location decision along with economic considerations and financial constraints.”

“From those days at Dayton Hudson and May Company to my tenure at JCPenney, we followed a practice of visiting markets to evaluate and map all existing competitive shopping centers and retail stores before writing research reports and publishing the new store sales forecasts and market strategies. This was long before Geographic Information Systems were readily available. Over those decades, we made detailed field notes and annotated comments on the road maps showing future sites, key competitors, major industries, trade area boundaries, and significant topographic features. We also took photos on the ground and from helicopters. Our libraries were full of these field maps and pictures. Although Google Earth is no substitute for carefully planned and executed fieldwork, it would have helped back then!”

“Geographic education is a lifelong journey. For me it took place in phases, starting with the university, but my training intensified during each step of my career, beginning at a USAF weather station in 1972 and then as a young geography professor at Virginia Tech. Each phase was like going back to school as I learned meteorology in the Air Force and then prepared to teach geography courses in a new department. The next wave of “graduate education” took place when I joined Dayton Hudson Corporation where I learned the nuts and bolts of fieldwork, market analysis, sales forecasting, and retail strategy. In sales forecasting, I used, through the years, a combination of methods ranging from store analogs and regression models to gravity-based sales allocation systems; not one, but several approaches to determine a new store sales forecast. Each position was a step up in terms of responsibilities and challenges. I must admit that I enjoyed being a department head the most, on par with doing fieldwork! Today I miss those field trip and leadership responsibilities the most, particularly with such gifted colleagues.”

When I asked Ken which projects or initiatives he is most proud of being part, he said, “I am very thankful for good timing throughout my career, including the three decades of doing geographical analysis for many new department store locations and strategies for some of the top retailers at the time. The timing was perfect. I have described this growth as a “wave” of real estate development beginning in the late 1970s that I was fortunate to catch. That wave didn’t crash until the Great Recession. It was a special time for the growth of bricks-and-mortar. Sadly that era is largely over. Retail space now far exceeds demand as we hear almost daily reports of shopping center and store closures.”

“At May Company, it was a privilege to contribute sales forecasts for major acquisitions of competing department store companies including Thalhimers, Wanamaker’s, Strawbridge and Clothier, and Marshall Field’s, to name a few. In each case, the fieldwork, market reviews, and store selection and sales forecasts were central to the acquisition process and the capital expenditure review. In the capital review, the sales forecasts for each new store were a central component in determining whether or not capital costs could be justified and hurdle rates achieved.”

“Two other aspects of my career are most important to me. First, and by the far the most important, has been the opportunity to guide and develop research staff in the research departments I served. This was a continuation of my early role as a professor in a geography department; one difference being that the area research staff were paid and stayed longer! At least six of my former staff have led or are leading research departments for retail and restaurant companies. With more skills than I have ever possessed, these individuals and other staff are the most important trophies of my career.”

“Second, it has been satisfying to see the final products of area research under my watch: dozens of successful retail stores and shopping centers, the development process of each starting with fieldwork, collaboration, geographical analysis, sales forecasting, and finally a capital review. The technology changed from year to year as the latest geographical information and demographic systems were added to the arsenal of prior research, map collections, and field experience.”

What are the most important things on which Ken feels we need to work as the education, science, and geospatial community? “The best foundation is a liberal arts undergraduate education that offers ample opportunity for library research, problem solving, hypothesis testing, statistical analysis, critical thinking, and writing. Computers are great tools but are not shortcuts to careful research and spatial analysis. Good writing reflects our critical thinking; good writers often are the top research analysts.”

“Second, a specialized graduate education should also include courses in real estate, economics, business finance, cartography and GIS, and other applied disciplines, especially those that support entry into directed on-the-job internships. But don’t neglect that graduate thesis, because it demonstrates the ability to complete a start-to-finish process with a final product. Third, mentors are essential to help students navigate their educational requirement and launch them on a career path. Without at least an informal mentoring process, students with high potential may slip through the cracks, even in the best research departments. The mentoring process should continue on the job, especially in an individual’s formative years of a career. And be a mentor yourself, particularly to your direct reports. You will discover colleagues and friends for a lifetime.”

“Finally, advanced courses outside one’s chosen discipline should be emphasized, particularly in finance, information technology, and real estate. Collaborate across disciplines because companies today are doing all they can to eliminate corporate silos and foster teamwork. Additionally, take every opportunity available for postgraduate education. Select the best professors and top-ranked institutions carefully, not the more readily available degree mills.”

Ken’s advice to new professionals is, “Be prepared to change course often in your career. Be nimble and always ready to break new ground. Your formal education may lead in one direction, but that could shift dramatically, as mine did. Be prepared to change jobs, and even careers, multiple times. You can prepare for such changes by having a well-rounded liberal arts education, a mindset to be a lifelong student, and active professional contacts outside your immediate job or company. Professional conferences, networking, and volunteer service to universities are extremely valuable in opening new opportunities. I was fortunate to attend geography conferences, especially the annual Applied Geography Conference, and dozens of International Council of Shopping Centers annual events. I also served on the International Council on Shopping Centers North American Research Task Force for many years.”

Ken has this to share from David Brooks in his New York Times’ bestseller, “The Road to Character”:

First, it is okay and normal to be flawed. “We are all stumblers and the beauty and meaning of life are in the stumbling — in recognizing the stumbling and trying to become more graceful as the years go by” (p. 268).

Second, “Humility is freedom from the need to prove you are superior all the time, (whereas) egotism is a ravenous hunger ... competitive, and distinction-hungry... Humility is the awareness that there’s a lot you don’t know and that a lot of what you think you know is distorted or wrong... Wisdom isn’t a body of knowledge. It’s the moral quality of knowing what you don’t know and figuring out a way to handle your ignorance, uncertainty, and limitation. The humble person understands that experience is a better teacher than pure reason. He understands that wisdom is not knowledge...It is knowing how to behave when perfect knowledge is lacking.” (pp. 8-9, 266).

Third, “Everyone needs redemptive assistance from outside — from a community, family, friends, ancestors, rules, traditions, institutions, exemplars, and for believers, God. We all need people to tell us when we are wrong, to advise us on how to do right, and to encourage, support, arouse, cooperate, and inspire us along the way... (We) build character by winning victories over the weaknesses (in ourselves)...” (pp. 12-13).

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