GRAND RAPIDS, MI – Leaders of Downtown Grand Rapids Inc. (DGRI) are getting a rare look at the spending patterns of downtown visitors and downtown residents thanks to a unique project by JPMorgan Chase & Co.

The bank has compiled about 1.5 million credit and debit card transactions each month to create a three-year window into who shops downtown, where they live and what they buy.

For DGRI President Kris Larson, the program, conducted from 2010 to 2013, has given him a treasure trove of hard numbers that he can use to sell downtown as a regional business and shopping center.

For example, Larson points to the statistic showing that overall spending in the downtown area falls off by just 8 percent in June and July while August spending spikes up 25 percent, driven mainly by spending from returning college students.

That challenges the assumption that downtown is dead in the summer and merchants and restaurants should not invest in summertime promotions, Larson said.

Here are some of the findings the project has shown:

- Sixty-eight percent of retail spending downtown is from customers who live outside the city limits.

- Forty-seven percent of retail spending downtown is from customers who live outside the Grand Rapids metropolitan area.

- Retail spending in downtown rose 21 percent in 2011, followed by a 15 percent increase in 2012 and a projected 11 percent increase in 2013.

- Restaurants account for 21 percent of downtown spending, followed by hotels and lodging at 12 percent and the health care industry at 11 percent.

- ArtPrize creates a jump in spending that ranges from 11 percent to 59 percent when compared to downtown spending in the weeks before and after ArtPrize.

- Laughfest brings an increase in spending to the downtown area that ranges from 7 percent to 21 percent when compared to spending in the three weeks before and after Laughfest.

Spending patterns for downtown residents also yielded insights that had not been seen before.



For example:



- Downtown residents made 80 percent of their local purchases outside of the downtown area.



- Restaurants made up 14 percent of the purchases made by downtown residents while 13 percent went to home improvement and landscaping outlets. Gas stations were the next big category at 12 percent.

- Seventy-one percent of downtown residents bought their groceries less than 5 miles away. The 49525 ZIP code, home of the Knapp's Corner Meijer and a D&W’s Fresh Market location, was the largest destination for downtown grocery dollars.

Larson said JPMorgan Chase gathered the statistics based on questions the DDA posed to Chase about local spending patterns. The statistics come only from spending by Chase cardholders, thought to be representative of other credit card holders as well.

He said they hope the statistics will help them challenge assumptions about life downtown and people's spending behavior in and around Grand Rapids.



Larson said they also hope to use the statistics to study what consumers and visitors buy and how much they spend on individual purchases when they shop in downtown stores.



David Kinsman, vice president and area manager for Chase in Grand Rapids, said the 3-year study aggregated the data to mask the customers and merchants who were included.

It's part of a program called Technology for Social Good that Chase also is offering in Louisville, Kentucky, and southern Ohio.



Kinsman said downtown businesses should be encouraged to see how spending has grown in recent years by residents and visitors.



"For existing business owners, I would hope it would be part of their decision to stay or to attract new businesses downtown," Kinsman said.



Stella Ng, the Chase researcher who assembled the data, said she was struck by the diversity of spending patterns by visitors, area residents and downtown residents.



Ng said she was surprised to see the drop-off in spending during summer months was not as sharp as the drop-off in the weeks after the holiday season.



Jim Harger covers business for MLive/Grand Rapids Press. Email him at jharger@mlive.com or follow him on Twitter or Facebook or Google+.



