1

Consumer Analysis

For

Ten Thousand Villages

Richmond, VA

_______________________________________________

Fair Trade Handicrafts

In the United States

_______________________________________________

Liang-Yun Cheng

University of Richmond’17

First Year Seminar: Changing Consumer Culture

Instructed by Dr. Dana Lascu

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Table of Content:

I. Introduction

II. Literature Review

III. Location Review

IV. Methodology

V. Data Analysis

VI. Findings and Conclusions

VII. Recommendations

VIII. Limitations

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I. Introduction

Ten Thousand Villages is a franchising fair trade retail store established in 1946. Edna

Ruth Byler, the founder of Ten Thousand Villages, developed the concept behind fair trade—

alleviate developing countries’ artisans from poverty through establishing a sustainable business

relationship between North American consumers and the artisans (Ten Thousand Villages).

Customers can purchase handicrafts from all over the world in a single store. The business

provides assist the artisans to design products that are catered to the North American customer’s

taste using their traditional skills and patterns (Ten Thousand Villages).

The CEO of Ten Thousand Villages Craig R. Schloneger described, “… customers

delight in giving gifts that give twice, finding meaning in beautiful, unique products” (Ten

Thousand Villages Annual Report). As shown, Ten Thousand Villages is positioned as a gift

store. Also, it sells products that are more than just products as the mission states that the

business aims to bring in both the products and the stories into the North American market (Ten

Thousand Villages). The stories behind the products are essential component in company’s

marketing strategy.

Ten Thousand Villages employs various medium to convey the stories to its customers.

Each price tag highlights the product’s country of origin. The store also provides further details

about the artisans and fair trade through occasional stories on display, posters, and brochures.

Most importantly, volunteers at the stores are available to hold conversations with customers and

to answer questions. At Ten Thousand Villages, it is not only about the appearance of the

product but also the character.

Unfortunately, despite the fact that Ten Thousand Villages’ revenues have overall

increased over the past years, the increase has been rather small. In fact, there were occasional

decline in its sales. The revenue trend demonstrates that the business is at the growth phase.

What can Ten Thousand Villages do to stimulate that growth?

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The research aims to observe the consumer behaviors at a Ten Thousand Villages store

located in a shopping district. It is intended to determine the level of browsing tendency, level of

information search, and the factors of purchase decision.

II. Literature Review

In the recent years, there is an increasing attention on social, environment, ethical, and

animal issues. A survey conducted by New Internationalist found that about a third of the

consumers boycott at least one brand, demonstrating ethical concerns in purchasing activities

(New Internationalist 2006). Ethical consumers (Mintel 1994) comprise of one of the target

groups of Ten Thousand Villages. More specifically, in a study, Dato-on et al. (2006) claims that

Ten Thousand Villages appeals to a group called “cultural creatives” (Ray 1997). While almost a

quarter of the population is immersed in the conservative and religious ideals of the past and

about half of the population is worshipping materialism, cultural creative are looking for ways to

improve the lives around them, both locally and globally (Ray 1997). These individuals are

usually women in their 40s who hold college degrees and earn above-average incomes (Ray

1997; Lee and Littrell 2006).

The consumers of fair trade products use their purchasing behaviors as a way to define

themselves (Ma and Lee 2012; Shaw et al. 2005). These consumers values elements such as

“freedom of choice, independence, self-respect, creativity, and curiosity” in their lives (Ma and

Lee 2012). More specifically, these individuals value the “uniqueness, authenticity, and ethic and

cultural characteristics” of the non-food fair trade products that they purchase (Ma and Lee 2012).

However, these consumers’ attitude towards being socially responsible does not always

translate into their purchasing behaviors (Robert 1996). For example, in the survey conducted by

Fair Trade USA between 2012 and 2013 revealed that while 81% of the Americans believe that it

is important to buy products that fairly compensate the farmers, only 18% regularly purchase fair

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trade products (Fair Trade USA). Therefore it is important to identify the factors that cause this

significant discrepancy.

The “intention-behavior mediation and moderation model of ethically minded consumers”

took on a holistic approach to explain this discrepancy between intention and behavior,

constructing a model based on three separate one-dimensional models that were developed in the

past (Carrington et al.).

In this model, the consumers begin with an intention, which is the desire to do something.

At this stage, ethical consumers have the tendency to forget that fair trade is an option because it

is a rather new concept in their lives and there are a lot of cheaper competitors in the market

(Dholakia et al. 2007; Gollwitzer and Sheeran 2006; Carrington et al).

Furthermore, the intention is only meaningful if one develops implementation intentions

or implementation plans, which are simply action plans (Bagozzi and Dholakia 1999; Gollwitzer

1993). Research has shown that if people have developed the if-then plans, then they are more

likely to complete the tasks (Gollwitzer and Sheeran 2006).

However, at this point, there are two factors that could cause the lack of translation from

implementation plans to behaviors. The first factor is the “Actual Behavioral Control” which is

based on the model called “Attitude-Behavior-Constraint (ABC)” model (Stern 2000). In this

model, the behavior is influenced by individual’s internal thoughts and the environmental forces

(Stern 2000). While individuals might have the full intention to buy a product, they might be

discouraged by other factors such as “the price, availability, convenience, information, ethical

issue, and time” (Shaw and Clarke 1999)

The other factor is called situational context (Belk 1975). This factor can be caused by

the following elements (Belk 1975):

1. Physical surroundings: the store environment

2. Social Surroundings: the people around; the interactions

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3. Temporal Perspective: Time-related issues

4. Task Definition: Intentions of visit

5. Antecedent States: the customer’s emotional and monetary state before entering the

store

These two factors, Attitude-Behavior-Constraint and Situational Context can

simultaneously occur and affect the translation of intention implementations to behaviors. This

model could be used to compare with the results of this study and to identify possible factors that

discourage the purchasing behaviors at Ten Thousand Villages.

A few other challenges that Ten Thousand Villages faces are the characters of its

products: relatively expensive, luxurious, and non-food. While fair trade food can be sold

through various supermarkets, non-food products are found only in limited stores or on specific

online websites (Ma and Lee 2012). For example, while there are around 1800 Target retail

locations in the United States, there are only 350 Ten Thousand Villages’ stores in the United

States (Target Corporation; Ten Thousand Villages). Also, while food products can become

more appealing by having an organic label, non-food fair trade products cannot (Ma and Lee

2012). Consumers might also struggle to allocate more money on these luxurious products since

it is not a necessity like food. A study conducted in Belgium found that consumers would like to

see these fair trade products to increase in availability in regular super markets and to slightly

reduce in the prices of these products (De Pelsmacker et al 2006). In fact, a study has revealed

that while consumers buy fair trade products out of the feeling of moral duty, the higher prices

can discourage the purchasing behavior (Gielissen 2011).

Ten Thousand Villages definitely has a niche market. However, it is not very well

established yet. It is important to identify the factors that prevent individuals from translating

their intentions into behaviors.

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III. Location Review

This research was conducted at the Ten Thousand Villages located in Carytown, which is one

of the tourist attractions of Richmond, Virginia. Carytown, also known as the Mile of Style, is an

outdoor shopping district comprised of a variety of local businesses including restaurants, cafes,

boutiques, consignment stores, and professional services. Visitors can “Eat, Shop, and Play” as

they walk down the street (Cantu 2013). Most of the stores offer relatively-expensive products

and services.

This district has a zip code of 23221. The residents have a median age of 34.4 with a median

income of $54,200. The majority of the households are composed of either one or two persons.

The majority of the residents are ethnically Caucasians.

A few significant consumer segments in this districts includes: “Boomtown Singles,”

“Brit Lites, Li’l City,” “Middleburg Managers,” “Second City Elite,” and “Up-and-Comers”

(Nielsen PRIZM). These segment snapshots demonstrate that the residents in the area are well-

educated individuals with stable incomes.

Segment Income Education

Boomtown Singles Lower Middle Some College

Brite Lites, Li’l City Upscale College Graduate

Middleburg Managers Upper Middle College Graduate

Second City Elites Upscale Graduate Plus

Up-and-Comers Upper Middle College Graduate

(Nielsen PRIZM System)

Ten Thousand Villages has definitely selected a suitable location for its store in Richmond.

Unlike some of its other retail locations, it is not a destination store. Instead, it is located in a

high-traffic area. Being in the middle of a shopping district, it attracts various passersby in

addition to its local residents who are well-educated and capable of buying its relatively-

expensive products.

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IV. Methodology

i. Interviews:

Three open-ended interviews were conducted to gain a better insight into this study: an

employee of Ten Thousand Villages Richmond, an African American female undergraduate, and

a Caucasian female undergraduate. The interviews were not recorded but extensive notes were

taken. The interviews were used to compare to the findings of this study.

ii. Participant Observations:

Participant observation was performed at the Ten Thousand Villages located in Carytown,

Richmond, on Mondays, Wednesdays, Saturdays, and Sundays. The variations in date and time

allow the result to capture a wider scope of consumers; for example, housewives vs. working

women. In order to observe the conversations between customers, only the ones who enter the

store with at least one other person will be observed. The following information was observed:

Information Observed

˙ General Information: Sex, Ethnicity, Age Group

˙ Amount of time spent in the shop.

˙ Appearance: clothing, handbags, etc

˙ Number of products picked up

˙ Number of times examined the price tag for price

˙ Number of items purchased

˙ Number of times examined the stories on display

˙ Number of times examined the price tag for country of origin

˙ Number of times held meaningful* conversations with the volunteers

˙ Number of times made a meaningful* comment to a friend *Meaningful: Conversations or comments involved the consideration of the artisans or the materials.

General commentary, such as “cool” and “cute,” are not counted.

Due to the type of information needed, extremely close-up observations are required. In

order to take down extensive notes, the observant will pretend to be texting on a smartphone.

Since texting and constantly checking a phone have recently become common behaviors, most

people will not be too suspicious of the “texting obsession.”

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35-50 33%

25-35 14%

Demographics

18-2519%

35-50 33%

25-35 14%

Demographics

18-2519%

Once the customer being observed leaves the store, the notes will immediately be

transferred from the smartphone onto the paper template. Then, an individual from the next

group of customers will be observed.

V. Data Analysis

A total of 22 individuals were observed,

including 15 females and 7 males. One of the initial

goals was to compare the consumption behaviors

between different ethnic groups. However, since

the majority of the customers are Caucasians and

the sample size is small, the one observation

involving a young Asian American student was

discarded. Therefore, the data analysis of this

research is based on 21 Caucasian individuals,

including 15 females and 6 males.

Also, originally, the appearance observation is included in hope of comparing different

social economic status groups’ shopping behaviors. However, most people came into the shop

with comfortable, casual clothing such as gym shoes, t-shirts, and jeans. It was difficult to

classify individuals into different social economic status groups based on their appearances.

Therefore, there will be no analysis on this aspect.

General Data

Time of Stay

On average, customers spent 9.6 minutes

in the store. While women stayed for a longer

time, an average of 11.5 minutes, men spent

50+ 34%

0

2

4

6

8

10

12

14

18-25 25-35 35-50 50+

Time of Stay: Age Group Minutes

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Price 67%

Excessive 9%

None 24%

Price Search

significantly less time in the store, an average of 4 minutes. Also, while most age groups stay in

the shop for around 8 minutes, the 35-50 age group spent 12.7 minutes in the store. Overall, 62%

of the customers spent less than 10 minutes in the shop.

Items Picked Up

The customers of Ten Thousand Villages picked up on an average of 12.6 items. Women

picked up slightly more objects, 15, and men picked up significantly less items, 4. While women

shops with close inspection, men simply look at each product from a distance. The 35-50 age

group picked up significally more items, 17.7. The number of items picked up can indicate

customers’ level of interest in the products sold at Ten Thousand Villages.

Number of Products Purchased

Out of the 21 customers, 19% purchased a total of eight products from the store. Out of

those who purchased, all of them were women, and three of them were from the 35-50 age group.

Price Tags for Price

While in the store, 24% of the

customers never looked at the price tag

for the price and 67% of the consumers

searched the price between 1-5 times. A

few customers, 9% of the sample,

looked for the price excessively,

meaning more than five times. In fact,

one individual examined 23 tags for

the price.

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Information Search

Price Tags for Products Details

Nineteen percent of the customers looked at the price tags for further details regarding the

products. Within this group, these invidiuals read an average of 1.5 tags. Out of this group, 75%

were women, and 75% were from the 25-35 age group.

Stories on Display

Only 24% of the individuals took the time out to read the special stories put on display.

These customers read an average f 1.6 stories. Out of this group, 60% were men. No particular

age group demonstrated more interest in these special stories.

Interaction with Volunteers

About 29% of the customers held a meaningful conversation with the volunteers. Within

this group, 50% of these individuals were from the 50+ age group. However, only 17 % were the

ones who initiated the conversation with the volunteers.

Comments

Almost 40% of the customers made some sort of meaningful comments to their

companies during their visit. Out these individuals, 50% of them were from the 50+ age group.

Some of the comments were:

“I volunteer with my money!”

“Look at that work!”

“It’s made of paper.”

“It’s from India.”

“It’s something to do with supporting lives.”

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0

0.5

1

1.5

2

2.5

3

3.5

18-25 25-35 35-50 50+

Overall Demonstrated Interest in Product Character

Frequency of Activities

Overall Information Search:

Overall, 71% of the

customers either searched for

further product information,

held meaningful conversations,

or made meaningful

comments. Each individual

performed on average two of

these activities, with the 25-35

age group being slightly more

engaged--3 activities.

Interviews

Employee

“I love Ten Thousand Villages because it preserves part of the traditional

cultures while helping disadvantaged individuals”

This employee had worked in Ten Thousand Villages for six years, both as a volunteer

and a full-time worker. She shared some her observations regarding the customers of Ten

Thousand Villages.

While Ten Thousand Villages is a store that appeals to all-age group, it targets the 25-35

age group comprised of business professionals who are just getting started. This group tends to

be more receptive towards the idea of fair trade due to the education that they have received.

Individuals between the age of 18 and 30 are more inclined to ask questions. While the younger

generation is more drawn to the stories behind the products, the older generation is more

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concerned about the look. Regardless, generally, individuals are more inclined to make a

purchase after learning the mission or the products’ details.

The Ten Thousand Villages at Carytown attracts both local residents and visitors. Since it

is a shopping district, it tends to have tourists who have never heard of the store before. Usually,

volunteers would approach the customers to inquire whether they have visited the store or not. If

not, the volunteers will briefly explain the mission of Ten Thousand Villages and the idea of fair

trade to them.

At the moment, Ten Thousand Villages is a gift shop. However, she believes that the

business should reposition itself as a personal shop in order to establish a more sustainable seller-

consumer relationship.

African-American Undergraduate

“I got the most amazing rainbow-stripe hairband from Ten Thousand Villages!”

This female student only got to know Ten Thousand Villages last year when she moved

to Richmond for college. Although Ten Thousand Villages is positioned as a gift store, this

individual has shopped there twice and bought two accessories for herself. Although the items

were slightly more expensive, she decided to purchase the products after reading the price tags

and learning they were handmade, indicating that the products were unique and someone had

worked hard to enhance the quality. Normally, she would have bought similar products at Target.

In her opinion, it is not a shop for conservative individuals who prefer colors like black and

white because most of the products in Ten Thousand Villages have colorful patterns.

Knowing that it was a fair trade business did give this student an incentive to purchase

the product. She is passionate about human rights issues; therefore, she has read about fair trade

outside classes.

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Caucasian Undergraduate

The first time this female student shopped at Ten Thousand Villages was when she was

nine. She went there with her parents and bought a flute. Unlike the African-American student,

this individual sees this shop as a present store, where one can purchase gifts for an older person.

For her, price doesn’t matter because she knows that her purchase is helping somebody in the

third world country.

VI. Findings

Strong Interest But Extensive Browsing

Ten Thousand Villages customers demonstrated interest in the products sold through the

number of items picked up and the comments they made while shopping. Customers picked up

on average 1.4 items per minute (average of products picked up/ time of stay in the store). Also,

costumers invariably made comments such as “cool” or “that’s cute” to their companies.

Moreover, the informants also express favor towards the design and the appearances of the

products. It can be indicated that the products are appealing to the general North American

consumers.

However, the data analysis results also showed that customers were mostly browsing.

Those 62% of the consumers that stayed in the store for less than ten minutes were most likely

individuals who entered the store with the just-checking-it-out mindset. The ten-minute time

frame allowed individuals to browse through the entire store without examining any products in

depth. Moreover, the fact that a quarter of the customers never checked the prices of the products

which indicated that these individuals had no intention to purchase any products that they had

picked up to examine more closely.

This high rate of browsing could be attributed to the location of the store or the price.

First of all Carytown attracts a lot of visitors and is a great area to hang out with friends or family.

Therefore, it is expected that many of its customers were casually looking through the products.

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The significant number of visitors in the area suggests that many probably did not come with any

values regarding the fair trade business model or any specific intentions. The 67% of the

customers who moderately checked the price tags showed that individuals were interested in

purchasing the products but were very likely discouraged by the prices.

At Ten Thousand Villages, purchasing intentions rarely translated into purchasing actions.

Overall, 75% of the customers checked the prices but only 19% actually made a purchase. Those

75% has reached the implementation intention stage but were most probably deterred by the

price. Unlike most consumers, those two informants’ knowledge of fair trade and desire to help

overrode the expensive price, which is desired by the business.

Age Group Differences

Interestingly, while the 35-50 age group stayed in the store for the longest period and

were the majority of those who made a purchase, it was the group that were least engaged in the

thinking about the products beyond their appearances. On the other hand, the 25-35 age group

was the complete opposite. This group picked up the least number of products, stayed in the store

for less than the average time, and purchased nothing from the shop; however, these individuals

were most engaged in considering the deeper character of the products.

While one group was purchasing based on the look, the other was not purchasing but

more engaged in activities that reflect the mission of Ten Thousand Villages. It is important for

the business to identify ways to fill in the gaps that each age segment lacks in their shopping

experience.

VII. Recommendations

Creation of Ten Thousand Villages Apps

Ten Thousand Villages should take advantage of the fast increase in the ownership of

smartphones and in the usage of social media. In the next six month, 30% of the consumers are

thinking about upgrading their smartphones (Nielson 2014a). Also, consumers are spending on

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an average 34 hours and 17 minutes each month on the apps and the browsers on the phones, a

nine hours and 52 minutes increase between 2012 and 2013 (Nielson 2014a). If Ten Thousand

Villages can create an app, then consumers can more easily access the stories of the products.

Also, if the app allows consumers to purchase products, then these products can be more readily

available for the potential consumers. Instead of shopping in the stores, consumers can shop

anywhere and easily find the detailed description of each product.

Increase Usage of Social Media

About one in five people believes that it is important to be seen as being “Green” (Mintel

2013). Nowadays, a way to show people that they are “Green” is through social media. In fact,

about 14 % of the 18-25 age group consumers were influenced after seeing their friends’ posts

regarding such issues (Mintel 2013). Similar idea can be applied to fair trade products. A

possible way to take advantage of this trend is to utilize the “Check In” function on the Facebook

app. The business can give customers who purchase products a slight discount if they “Check In”

on Facebook. This small action can bring more recognition to the name Ten Thousand Villages

and hopefully influence more people to buy fair trade products from the brand.

Greater Volunteer Engagement with Customers

One of the best ways to spread the mission of the store is holding individual

conversations. It is important that the volunteers at Ten Thousand Villages approach the

customers and highlight the mission of the business and the idea of fair trade. However,

volunteers should avoid forcing on a conversation, which might potentially deter a potential

customer from shopping at the store.

Target Millennial, Offer Occasional Discount

Although research have shown that socially conscious consumers tend to be older and to

earn higher incomes, Ten Thousand Villages can try to target the Millennials as their personality

matches with the characters of the products. The research result has shown that this group

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definitely demonstrated the most interest in the stories behind the products. Also, as the

employee mentioned, Ten Thousand Villages seem to be targeting the 18-30 age group. Since

the Millennials tend to be more educated than Generation X (Nielsen 2014b,) they are more

likely to have heard of fair trade. People with that education background can more easily

understand the impact of this business model. Also, education can greatly impact a person’s

value, which then influences the individual’s attitudes towards the subject and further impacts

the behaviors (Homer and Kahle 1988).

Going back to the first recommendation, the Millenials are the perfect target group for it.

These individuals’ lives are closely associated with technology and Facebook is the most widely

used social media site (Nielsen 2014b). Milleninals feel more intimate with a brand if they are

engaged with the brand on social media sites, which will result in their tendency to support the

business (Nielsen 2014b).

Although the Millenials are willing to pay a little more for products that have a social

impact (Nielsen 2014b), which is the core of Ten Thousand Villages, this group is definitely

searching for the best deal because they are young and do not have a huge amount of

discretionary income. Therefore, occasional discount can potentially encourage the purchasing

behaviors of this age group. In this case, price would be less of an issue for these customers and

hopefully the education and stories are powerful enough to allow the translation of

implementation intentions into purchase behaviors.

VIII. Limitations

This study was done as a way to introduce the first-year students to the field of consumer

market research. There were a lot of limitations. Therefore, the results should only be used with

caution.

The biggest limitation for this study was the small sample size. There were only three

individuals for two of the age groups. The averages presented in this research could be highly

skewed due to this limitation. Secondly, this study was an analysis of Caucasian consumer

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behaviors. It is important to gain a better insight into other ethnic groups, who might have a

different attitude towards the price of the products and the mission of the business. Also, this

sample was dominated by females. A separate set of study should be conducted to gain a better

insight into the male segment, which is much less engaged in business like this. After all, fair

trade should not be a business model catered to only women, but the whole population. As

mentioned earlier in the study, social economic status was an aspect that was discarded due to

the lack of information. The inclusion of this information in future study could possibly give a

different insight into different SES consumer segments.

Due to the method limitations of this study, it is hard to determine whether individuals try

to find out more about the products outside the point-of-purchase. There are various ways to find

information regarding the artisans, including the website, social media sites, and the quarter

cards that are given alongside the purchased products. While participant observation can yield

great insight into this study, surveys and interviews should be included in order to get a more

complete picture of the relationship between consumers’ behaviors, practices, and background.

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