When you think of Houston, what do you think of? The first thing that comes to mind for most is the iconic phrase from Apollo 13’s mission to the moon, “Houston, we have a problem.” In fact, it is the autofill on a Google search when you type in “Houston.” Nonetheless, it’s not a great tag line or advertisement for Houston. It’s like saying, “Buffalo, Home to No Super Bowls,” or “Chernobyl, A Nice Place to Visit, Never.”
Houston, however, is one of the most international, multicultural, and multilingual cities in the United States. According to the Houston Chamber of Commerce, “The Houston metropolitan area is now the most ethnically diverse large metropolitan area in the country, with two suburbs - Pearland and Missouri City - leading the region in diversity.”1 It is the fourth most populous city in the United States and the 6th largest economy or GDP among US Cities. It boasts the 24th largest GDP in the world. Houston is home to the busiest port in the nation, 90 international companies and 20 Fortune 500 companies2, with 5,000 of its companies doing business overseas.
In many ways Houston is the fulcrum, the symbolic transformation of America. It went from an industrial city with little racial and ethnic diversity to a city that is now a complex ecosystem of diverse populations with an economy geared toward finance, medical, and service sectors; it draws millennials, retirees, documented and undocumented immigrants, as well as international students, businesses and business people. Houston is home to the 3rd largest population of undocumented immigrants in the US3, and a growing LBGT community and international population, which adds to its ever-growing urban sprawl. Today, approximately 2/3 of Houstonians are multicultural and make up a significant portion of the medical, engineering and restaurant sectors.
For much of its history, however, Houston was a blue collar industrial city, known as an oil and seaport town. Today it has the world’s largest medical facility and more engineers and architects than any other city in the US. Houstonians eat out more than people in any other city in the US, eating out, on average, 6.9 times per week while the national average is 4.9. It’s a good thing that there are over 75 countries represented in the Greater Houston area restaurant scene.2
This cultural transformation has not been easy for a blue-collar city in the Deep South, in a Red State. The journey to integration and acceptance is far from over.
When the oil boom crashed in the early 1980’s, Houston was hit hard economically. There were numerous vacant homes and apartments for rent and the US government, desperately seeking a place to resettle Vietnamese refugees, focused on Houston and the Gulf Coast Delta. For many refugees, the area was reminiscent of the Mekong Delta in Vietnam, and they found success and opportunity in shrimping and fishing.
Through secondary migration, more Vietnamese families resettled to the Houston area. One of my favorite cooking hosts, David Chang, in the Shrimp and Crawfish episode of his show, “Ugly Delicious”, talks about how Vietnamese culture opened the door for multicultural food and the new fusion of Cajun boil with Vietnamese flavors. Vietnamese restaurants dot a six-mile stretch on Westminster Road in Houston. Integration happened because immigrants created their own opportunities, and a critical mass of people changed the culture of the city. In the face of the prosperity of the Vietnamese families, Chang also mentions that historically, white fishermen and shrimpers did not approve of the cultural shift and the Grand Wizard of the KKK started intimidation tactics of violence and terrorism throughout late 1970s and early 80s.4
Below is a graph showing the progression of multiculturalism in Houston.5
This story, along with the numbers, proved that Houston is the future. According to the Brookings Institute, the white population in the United States will be a minority in 2045. Houston reached that threshold in 2000.
U.S White and Non-White Populations, 1970 - 201506
Although the overall population, multicultural populations and the economy blossomed, racism and division reared its ugly head in Houston. The city is one of the most racially, politically and economically divided in the United States.7
Here is the second GOP congressional district in Houston. Whites make up 70%8 of the 2nd GOP District in the most ethnically and racially diverse city in the nation. 70%. 7
This is the 18th Congressional District in Houston; it is 50% white and 50% nonwhite. Currently, this district is represented by a black Congresswoman, Shelia Jackson Lee. According to Govtrack.com which tracks voting records of congressmen and women, she is one of the most progressive in the nation, whereas Congressman Ted Poe, who is white, represents the 2nd district and is ranked as of the most conservative in the nation.
Houston is not an anomaly. One district is majority white and another district is racially diverse. They are diametrically opposed in political views. This kind of ideological segregation is taking place, city after city, county after county, and state after state. The reality is that we are segregated by race, class and ideology more than ever.
This is a spreadsheet showing the breakdown of towns and neighborhoods in the Houston area by race and ethnicity:9
Segregation by race goes beyond these diagrams. It also follows the US Census tracts, school districts, churches, neighborhoods, and congressional districts -- all are segregated by race, ethnicity and income.
So, what can a machine learning software company do about this? Not much. How can marketers right this wrong? Well, we CAN acknowledge that communities are separated. We can study each neighborhood to learn its language, culture and changing demographics to (at the very least) accommodate the changing culture and tastes from one neighborhood to another.
Why is this important? Not giving people what they need or want denies people their culture, identity, and history.
In the New England region, Market Basket, a locally owned supermarket chain, is beating international supermarkets with their conscientious approach toward customer and neighborhood needs. "We cater to where we are. Is it a bagel town or is it a muffin town?", says Tom Trainer, District Manager for Market Basket. Before opening a new store, buyers and store directors study the area, taking note of what people eat and use based on their ethnic backgrounds.
If you visit Market Basket supermarkets across New England, your shopping experience will be significantly and immediately different. Take Chelsea, Massachusetts, for example. This town is home to one of the largest Hispanic populations in Massachusetts. Although the layout of the Market Basket store there is similar to all the others, there are notable differences. The first several aisles of the produce department are devoted to foods that are common in Hispanic dishes and the ethnic food section is three rows deep, as big as a local bodega. Similarly, in Biddeford, Maine, one of the least racially diverse populations in the United States, the produce department reflects the town it serves. Most of the produce are familiar New England fare: tomatoes, potatoes, lettuce and the like. There is no ethnic food aisle three rows deep but local beer and pastries are represented. Further, Tom Trainor, district manager for Market Basket recalled that while preparing Market Basket's Waltham, Massachusetts store for its grand opening, the store director and a buyer noticed that a few smaller markets in the area sold a special type of Afghani bread. "We had never even seen it before," he noted, "but we observed that it sold very well. So, we contacted the company that produces it and we're now carrying it in Waltham."10
Market Basket has consistently outperformed the likes of Delhaize, Hannaford, Shaw’s, and Albertson’s. In 2013, Shaw's and Stop & Shop closed 12 and 9 locations respectively, in markets where Market Basket operated. As one industry analyst stated, “Stop & Shop left New Hampshire because it was getting ‘battered’ by Market Basket.”11
What can we learn from this? What if all large chain stores adopted the open, multiculturally responsive approach and philosophy of Market Basket? What if the retail outlets of Aldo, a major clothing retailer had colors, sizes, staff, signage, and websites that reflected the community it serves rather than cookie cutter outlet stores for efficiency? How can this be done?
Companies need to study the demographics, culture, and nuances of each neighborhood they serve. While this may seem like an onerous task of data collection and analysis, the payoff will be great. We now have the technology to analyze large sets of data to better understand and serve customers and diverse communities and neighborhoods. It’s as simple as knowing your customers to better serve them.