Using Detailed Customer Transaction Data from Farmers' Markets to Analyze Opportunities for Increased Sales

View the project final report

Commodities

Practices

• Education and Training: extension, participatory research, technical assistance
• Farm Business Management: farmers' markets/farm stands, market study, marketing management
• Sustainable Communities: local and regional food systems

Farmers markets remain the most popular marketing channel among small farms despite their relatively low returns for the labor invested. Our previous work on Marketing Channel Assessment showed that farmers markets offer high prices but generate relatively small volume sales and high labor demands. This formula can lead to a disproportionate amount of labor spent on marketing versus production activities and in some cases, farmer “burnout.” In response, we propose to collect detailed customer transaction information at farmers markets and use it to discover opportunities for increased sales.

The old ag economist's adage says you cannot improve what you do not measure; however, detailed data collection is challenging on small farms. Farmers’ busy days often cause them to neglect recordkeeping which typically relies on notetaking with paper, leading to lost data and lack of completion. Recent point-of-sale (POS) technology has created a simple means for quick electronic data collection. Like grocery store scanners, POS applications record details of market transactions allowing trend analysis, benchmark creation, and informed decisions. We will use POS data to analyze market performance for individual farms, farmers markets, and an aggregated set. Trends and patterns will then inform specific recommendations to farms to increase sales.

We intend to use this data-driven approach to improve channel performance. The resulting reports and lessons learned will be shared with participating farms through reports while general findings will be shared in articles and at workshops and conferences. We also document the methodology in a guide so additional farms may participate.

Objective 1: To identify opportunities for participating farms to increase sales based on consumer transaction data. Our primary objective is to collect and analyze detailed customer transaction data from a group of small scale vegetable farms in the Ithaca, NY area. We will provide each farm with a detailed report on their transactions complete with interpretation and suggested methods to increase customer spending.

Objective 2: To pilot and develop a methodology for collecting data on customer transactions. In order to complete our primary objective, we will need to develop and implement the methodology for programming the POS system and collecting data consistently across all farms and markets. A plan for this method is described in other sections of this proposal. Once developed, our method will be described in a guide so it is replicable. Objective 3: To develop generalized marketing advice based on conclusions drawn from individual farm and aggregated data. We will aggregate data and create benchmarks for farmers market sales. We plan to disseminate our findings through articles, sharing recommended marketing changes which seem broadly applicable.