Pet Store Site Selection

Introduction:

To the millions of pet owners throughout the United States, the pet industry has evolved into an everyday necessity. Convenient access to pet food, supplies, and services is extremely important for the 72.9 million pet owning households and their companions. More than half of all households in the entire country own pets and therefore, there is a constant demand for the products and services offered by pet stores. In 2011, the total pet expenditure for the United States was 50.8 billion dollars. Within this total expenditure 38 percent was spent on pet food and 28 percent was spent on pet supplies. Pets Unleashed first and new location will offer a wide variety of pet food and supplies for an large assortment of pets as well as grooming services for both dogs and cats. Pets Unleashed will also offer a variety of reptiles, birds, fish, rodents, and puppies that are ready to take home. Pets Unleashed is a new pet store that will provide all the necessary elements pet owners need as well as providing the opportunity to become a new pet owner.  

Marathon County, Wisconsin has been established as a general area of interest for a potential location for the first Pets Unleashed store. Marathon County was considered for Pets Unleashed first store location based on the primarily rural and suburban make up of the county. Majority of pet owners are located within rural and suburban areas similar to most of Marathon County.  Not only is Marathon County made up of rural and suburban areas associated with the pet owning demographic, but the population of the city of Wausau and the growing city of Weston are large enough to ensure customers for a new store. Aside from determining Marathon County as a general area of interest, specific locations have been determined as potential locations based on several factors. Analysis of the competitors, the current market, and pet owner demographics were essential determining factors for establishing potential store locations. From the analysis of the current market and the pet owner demographics three potential store locations were determined for Pets Unleashed first store. Each of the three potential locations were then ranked and assigned a corresponding trade area.

Methods:

The first determining factor for establishing three potential store locations in Marathon County was the location of Pets Unleashed ideal customers. The ideal customers for Pets Unleashed adhere to several specific demographic factors including age, income, and home owners. Individuals between the ages of 30 and 60 are more likely to own pets. Therefore, Pets Unleashed ideal customers are within the 30 to 60 age range. Furthermore pet owners and potential pet owners need a sufficient income to purchase and take care of pets, where ideal customers would have an income greater than 50,000. In addition to a specific age range and income, ideal customers own their own homes as 78 percent of pet owners are home owners. Based on these demographics specific restrictions were place on each zip code within Marathon County displaying the zip codes with median ages between 30 and 60, incomes greater than 50,000, and greater than 500 owner occupied households.  

Ideal Customers 

In addition to locating ideal customers by zip codes hot spot analyses also identify specific areas of interest for potential store locations. Hot spot analyses were used to display areas of high population and income based on 0.5 mile grids. Although rural and suburban areas are more predominant for pet owners, it is beneficial for a store to be located near areas with a considerable population to ensure a sufficient amount of customers. Areas of higher income are also beneficial for a store location as these areas ensure the presence of households with adequate income for pet expenses as well as ensure customer spending.  

Population and Income Hot Spots

Aside from examining areas with specific demographics the location of current competitors and the current market conditions were examined.  Competitors of Pets Unleashed include any retail pet store providing pet food, supplies, and pets in Marathon County. Although Pets Unleashed also provides grooming services, the locations which solely offer grooming services were excluded as competitors since Pets Unleashed offers food, supplies, and pets in addition to grooming. Using the location of current competitors in Marathon County, the current market penetration was established. The market penetration was calculated based on population and number of competitors per zip code and then weighted by the sales volume of each competitor.  The market penetration was weighted by sales volume considering PetCo and PetSmart have high sales volumes which contribute to a more saturated market in the areas near those stores.  The areas with greater market saturation are likely areas to avoid for a potential location.

Market Penetration 

The final element used to determine potential store locations a gravity model calculated between Wausau in Marathon County and surrounding cities. The city of Medford to the North West of Wausau, Antigo to the North East of Wausau, and Stevens Point to the South of Wausau were the cities selected for the gravity model. The gravity model was calculated to determine which of these cities have the strongest connection to Wausau based on population and distance. The direction of the city which has the strongest pull may benefit a potential store location. The results from the gravity model in combination with the results from the ideal customers, hot spot analyses, competitors, and market penetration are all considered when selecting the three specific potential store locations.

Results:   

The final potential Pets Unleashed store locations in Marathon County were selected based on the results of the above demographic and market analyses. All three of the potential locations are located within a zip code determined to be the locations of ideal customers. Each potential location is also near an area of sufficient population and high income based on the hot spot analyses. Furthermore the potential locations were selected in areas away from competitors, specifically away from the Rib Mountain area which has a highly saturated market contributed by PetCo and PetSmart. The gravity model being the final component determining the final potential locations determined that Medford and Stevens Point had an equally stronger connection to Wausau compared to Antigo. Therefore, the potential locations were selected in the southern and western halves of Marathon County.  The three potential store locations have also been ranked based on specific demographics. The rankings were determined by population of age between 30 and 60, household income, total population, owner occupied homes, and households with pets in a two mile radius of each potential location. The rankings determined that the potential location in Schofield being the best location in regards to the selected demographics and the location in Marathon being the least desirable.

Potential Locations 

In addition to ranking the potential store locations based on select demographics, a trade area for each location was established with a five, 10, and 15 minute drive time. Not only does the trade area display the areas within each drive time interval, but a report was generated providing specific demographic data for each area.  The data from the reports indicate that the trade areas for each potential location are consistent with the desired demographics. Considerably more than half of all households for all trade areas are owner occupied and within both the age and income requirements. Moreover within all parts of the trade areas for each potential location shows that around 60 percent of all households own at least one pet.  

Potential Location Trade Areas

Schofield

Data	5 Minute	10 Minute	15 Minute
Total Households	1,252	8,859	20,477
Household With Pets	63.1%	57%	58%
Median Age	36.6	37.5	39.1
Owner Occupied Homes	980	5,895	14,429
Median Income	$69,732	$56,223	$55,866

Stratford

Data	5 Minute	10 Minute	15 Minute
Total Households	743	2,443	12,120
Household With Pets	70%	64.7%	60%
Median Age	43.1	43.5	40.9
Owner Occupied Homes	574	1,931	8,770
Median Income	$61,221	$63,270	$53,106

Marathon

Data	5 Minute	10 Minute	15 Minute
Total Households	905	2,377	6,188
Household With Pets	59%	64%	59%
Median Age	38.4	40.1	40.2
Owner Occupied Homes	666	1,974	4,401
Median Income	$52,732	$56,058	$52,090

Recommendations:

All of the potential locations along with their given trade areas would be more than suitable for Pets Unleashed first store. However, the potential location in Schofield is the most desirable location based on the rankings given for all three locations and the reports generated from the assigned trade areas. The Schofield location has the greatest population within its trade area ensuring the most potential for customers. In addition to having a trade area with a larger population than the other two locations, the Schofield location has the greatest household income within its trade area. The only problematic aspect to the Schofield location is its closer proximity to the market area saturated by PetCo and PetSmart compared to the other two locations. Despite its closer proximity to PetCo and PetSmart, the Schofield location has an actual location within a zip code with a fairly low market penetration. Overall, the Schofield location is the most promising location with the most promising trade area for Pets Unleashed in Marathon County.  

Trader Joe's Retail Site Selection

Introduction:

Recently the Trader Joe’s Company has been particularly successful. The current success of the company has established an interest in opening another store. The Minneapolis, Saint Paul area in Minnesota has been a specific area of success for the company and is an area of particular interest for a new store location. Investigation of current demographic and marketing trends in Hennepin and Ramsey County is necessary in order to determine the most desirable location for a new store in the Minneapolis, Saint Paul area. Upon Investigation of several marketing and demographic factors in Hennepin and Ramsey County, three potential Trader Joe’s Store locations will be determined and ranked based on their potential.

Methods:

Before various marketing and demographic trends can be investigated, it is necessary to determine the current locations of the existing Trader Joe’s Stores as well as each stores respective customers. The current store locations will provide an understanding of the areas to avoid for a new store location as Trader Joe’s does not want to take away sales from their current stores. Also, understanding the location of Trader Joe’s customers not only provides information on which customers utilize which store, but establish a mean center that represents an ideal store location.

In addition to understanding the locations of the current stores, it is also necessary to understand the market penetration of the current Trader Joe’s Stores in Hennepin and Ramsey County based on zip codes. The market penetration is beneficial for understanding how well Trader Joe’s is reaching their market area in a particular zip code. Understanding which areas are successfully penetrating their market and which ones are not offer insight on specific areas that would benefit from a new store.   

In combination with Trader Joe’s current market conditions, a hot spot analysis of Hennepin and Ramsey County is used to understand demographic information in the Minneapolis, Saint Paul Area. The first hot spot analysis displays total population data in 0.5 mile grids. The second hot spot analysis displays median household income in the same 0.5 grids. Comparing the population hot spot analysis to the median income analysis provides the means to determine any correlations between income and population in Hennepin and Ramsey County.

Aside from the hot spot analyses providing beneficial demographic information for Hennepin and Ramsey County, it is also necessary to determine which zip codes possess ideal customers. The ideal customers are determined by several factors including population, income, and family size. In terms of these factors the ideal customers are located in areas with a population greater than 15,000, have a median income greater than 65,000, and a family size larger than two. Zips codes that meet all three of these requirements are areas set aside as ideal customers.

After analysis of the methods above three potential Trader Joe’s Store locations are determined based on ideal location, market penetration, population and income data, and the location of ideal customers.  Based on the data, the general area of each potential store location is determined and then specifically selected based on locations that are suitable to build a new store. Once the specific locations are selected they can be ranked. The rankings for the potential stores are based on total population data, median household income data, average amount spent per week above $150 by household, and the amount of individuals shopping at Trader Joe’s over 6 months. The specific data is used to rank each store in comparison to the ideal store location set at the mean center of all Trader Joe’s customers.

Conclusion:

Trader Joe’s is successfully penetrating their market for much of Ramsey County and just over half of Hennepin County. The high market penetration in the zip codes in the western part of these two counties can be explained by the location of four out of the six stores in this area. These four stores are utilized by the majority of all the Trader Joe’s customers causing a high market penetration. The zip codes in most of the eastern part of the Hennepin County is below 32 percent as there two less stores and fewer customers.

The hot spot analysis for total population show that the higher populated areas are also located on the western half of these two counties, which account for more stores and customers’ existing in this area. The population of east Hennepin County is significantly less than the western half of the two counties as it is further away from the cities of Minneapolis and Saint Paul.

The hot spot analysis for median income shows an inverse relationship compared to the hotspot analysis for population. The areas with high income are located in east Hennepin County where the population was significantly lower than the rest of the two counties. As the population increases toward the western half of the two counties the income appears to decrease. Overall, the less populated areas appear to have a higher median income compared to densely populated areas of Minneapolis and Saint Paul.

The hot spot analysis portrays population and median income data for all of Hennepin and Ramsey County, which are essential demographic factors for determining potential store locations. In addition to population and income data, it is necessary to incorporate average family size for determining ideal customers as families tend to utilize grocery stores more often than singles and young couples. The zip codes that have a population greater than 15,000, a median income greater than 65,000 and an average family size greater than 2 are located primarily in the center of Hennepin and Ramsey County and north Ramsey County.    

Recommendations:

The three potential locations for new Trader Joe’s Store were determined based on analysis of the above conclusions. Based on the ideal customer locations, the areas of higher median income further from the cities, and sufficient population, west Hennepin County was selected as a general area for potential store locations. Not only is west Hennepin County appropriate in terms of income and ideal customers, but it is away from the market area that Trader Joe’s is already successfully penetrating. Specific locations for potential stores were selected within the general area of west Hennepin County based on closest possible proximity to the ideal store location as well as a sufficient distance away from current stores. The specific potential stores are then ranked compared to the ideal store. The southernmost location near Chanhassen is determined to be the potential store location with the best rank of the three potential stores.

415 Summit Avenue

Introduction

Purchasing a home is decision that requires a lot of planning and investigation. When considering purchasing a home there are a variety of complex elements that can negatively or positively influence a final decision. Personal needs are the first element influencing a decision on buying a specific home. Personal needs and requirements include anything from budget, location, size, maintenance and simply overall appeal of a home to specific individuals. There are also decision factors regarding the neighborhood itself and how it compares to the surrounding area. Before deciding on a specific home, it is necessary to understand how that home compares to other homes in the neighborhood. This is not only important for determining whether or not the price is reasonable, but also to understand the elements of the surrounding homes. Understanding these elements is helpful in making inferences about the demographics of a particular neighborhood. In addition to comparing a specific home to the other homes in a neighborhood, it is important to understand how the neighborhood overall compares to the surrounding area. Investigation of the surrounding area provides deeper insight on the demographics of the area as well as the opportunities and activities available. Investigation of 415 Summit Avenue, a home for sale in the 3^rd ward of Eau Claire Wisconsin, concentrates on these elements to establish 415 Summit Avenue as a desirable home to purchase in the 3^rd ward.

Methods

Analysis of homes in the Eau Claire 3^rd ward is necessary in order to understand where 415 Summit Avenue stands compared to the general average of other homes in this area. To conduct a proper comparison between 415 Summit and other homes in the 3^rd ward it is necessary to establish specific factors to compare. Square footage, age, bedrooms, bathrooms, estimated value, and current market of homes are all important factors for those deciding whether or not to purchase a home. The first step for successfully comparing these factors among homes in the third ward is to establish a study area of the third ward encompassing all homes that are to be evaluated. Using the Wisconsin parcel data map, individual parcels of the desired 3^rd ward homes were selected and exported as a separate shapefile. The selected shapefile of the 3^rd ward includes over 300 parcels that provide data on street address and name of the current owner. After creating a shapefile of the desired study area, data for the respective factors was obtained from zillow for each address in the study area of the 3^rd Ward.  The data from zillow for each address including square footage, age, bedrooms, bathrooms, value, and market price (if currently for sale), was displayed in an excel spreadsheet. The spread sheet of the data was then joined to the 3^rd ward shapefile allowing for each factor of 3^rd ward homes to be mapped by individual parcels.

To distinguish the Third Ward from the rest of Eau Claire, one must separate the city into five regions using Business Analyst Online. For the four big divisions (North, West, South, and Downtown), the areas selected by census tracts. To get the perfect size for the 3^rd Ward, a smaller area must be used. Therefore, using block group for the area would be correct. Using these sectors, the user is now able to run standard reports such as Tapestry Segmentation and Traffic Reports. These same sectors were also used to run comparison reports on categories such as population over 18+ and political/ community involvement using Eau Claire County’s total population as a baseline. Once the data was accessible, download it from ArcGIS Online to Microsoft Excel. Now in Excel, the user is now able to create aesthetically pleasing charts that were not available from ESRI directly.

Results     

The first map displays the square footage of the individual homes in the third ward. On average, most homes in the 3^rd ward are between 1,700 and 2,600 square feet. 415 Summit Avenue is 2,965 square feet, which is significantly larger than the average size of 3^rd ward homes.

Square Footage of 3rd Ward Homes

 The map displaying the age of homes in the 3^rd ward shows that majority of homes in this area are older than 80 years old. 415 Summit Avenue falls between the ranges of 80 to 110, at 84 years old. Although 415 Summit Avenue fits into the same category of most homes being over 80 years old, there are a significant amount of homes much older between 110 to 175 years old.

Age of 3rd Ward Homes

The map displaying the number of bedrooms per home shows an average amount of bedrooms in the 3^rd ward homes to be between 3 and 4. 415 Summit Avenue has 3 bedrooms which is similar to most other homes in the 3^rd ward.

Number of Bedrooms Per Home in 3rd Ward

The map concerning the number of bathrooms per home shows most homes having 2 bathrooms. 415 Summit Avenue has 3 bathrooms, one more than the typically home in the 3^rd ward.

Number of Bathrooms per Home in 3rd Ward

The map of the estimated values for the homes in the 3^rd ward show that most homes are over $140,000 but under $230,000, thus, a typical price range for those in the middle to upper middle class. 415 Summit has an estimated value of around $205,000, falling somewhere in the middle range of 3^rd ward homes.

Estimated Value of 3rd Ward Homes

The final map displays the homes in the third ward that are currently for sale along with the asking price. Out of the 360 parcels, only 11 homes are currently for sale. The median asking price for all these homes is around $259,000, and the asking price of 415 Summit Avenue is $218,000.

3rd Ward Current Market

The first map that was created of Eau Claire shows the city divided into five sub regions. These zones would be used to run Business Analyst reports on. The Third Ward is highlighted in red.

        

The first chart that was created showed how the population dynamics of the Third Ward compared with the rest of the city. As the Third Ward’s total population is smaller than the rest of the other sectors, the data would be displayed as a percent to normalize it. This chart illustrates how the Third Ward does not have large population that is composed of young families.  Most of the population in the neighborhood 415 Summit is located in is over the age 18.

The second chart shows how the Third Ward leans politically and the neighborhood’s involvement in community affairs. Comparing the sectors against the whole population of Eau Claire County allowed for analysis to take into account how prospective home buyers might also consider a city such as Altoona to live in as it is relatively short commute away from Eau Claire. The results show Third Ward residents lean far more left than the rest of the city. They also participate slightly more in local politics.

The final characteristic of the Third Ward that separated it from the rest of Eau Claire was its traffic count. Being separated from major roads led the area to have a lower traffic count than the rest of the city. The lower amount of vehicles, as well as access to trails, made travel options such as biking and walking more viable. The following maps depict traffic counts for the five regions.

Third Ward:

North Side:

West Side:

South Side:

Downtown:

Conclusion

415 Summit Avenue is the same or better in all factors compared to the majority of the homes in the 3^rd ward, and has an asking price lower than the median price of $218,000. Also when comparing 415 Summit Avenue to homes for sale that are similar in each factor, 415 Summit also has a cheaper asking price. Overall, in regards to these factors, 415 Summit Avenue is the same or better than the average homes in the 3^rd ward with a more affordable price.   

Coffee Shop Analysis

Introduction

Two coffee and doughnut shops in San Francisco are interested in working together to maximize their trade area.  Both coffee shops are located within close proximity to one another; therefore have customers within the same general area. In order to maximize their trade areas, each coffee shop needs a basic understanding of their customers and competitors.  Both coffee shops must recognize where their customers are located as well as the overall walking distance of their customers in order to establish a customer derived trade area. It is also important to understand who their customers are in regards to various demographics. Furthermore both coffee shops need to determine the location of their competitors in the area. Through a spatial understanding of various aspects in regards to their customers and surrounding competitors, both coffee shops can generate a plan to maximize their trade area. 

Methods

In order to begin establish a spatial understanding of the customers and competitors of both coffee shops, a study area must be defined. Defining a study area of around San Francisco allows for the necessary data to be displayed within a central focus. After a study area is defined then then each stores location and their customers can be geocoded. Geocoding allows for specific point data to be located then displayed in a spatial representation, in this case both store locations and their customers. Once each store is plotted along with their combined customers, it is necessary to separate the customers based on which specific coffee shop they go to. Assigning customers to their respective store is necessary in order to establish the mean center for each store’s customers. The mean center determines the central point for each stores customer’s location displaying whether or not each store has more customers in specific direction. The result from these processes produces a spatial representation of the San Francisco area displaying each stores location, the location where each set of their customers comes from, as well as the mean centers of each set of customers (Figure 1. Coffee Shop Customers).

In addition to displaying the points of individual customers for each store and determining both mean centers, it is also necessary to establish a customer derived trade area for each store. The trade area for each store is created through a business analyst tool which produces a trade area represented by three rings. The first ring surrounding each store sets an area enclosing 40 percent of each store’s customers; the second ring encloses 60 percent, while the third encloses 80 percent. The spatial representation produced from this process illustrates the surrounding area where 80 percent of each store’s customers are located. (Figure 1. Customer Trade Area)

Furthermore, while creating the customer trade area for each store using business analyst, reports regarding community profile and retail goods and service expenditures were generated. These reports provide data concerning the population of the individuals located within each coffee shops customer derived trade area. Using these reports in combination with the spatial representation of the customer trade area not only determines where current and prospective customers are located, but also provides useful demographics regarding those customers.

Not only is it important to determine the general location where majority of each store’s customers are located, but it is also important to determine the general walking distance for each stores respective customers.  The walking distance representation is created through the same business analyst tool used to establish the customer trade area, and is also displayed by three rings. The first ring surrounds 0.5 miles around each store, the second ring 1.0 mile, and the third 1.5 miles. Considering most customers walk to their designated store, it is important to produce a spatial representation that shows the distance that majority of the customers have to travel to each store (Figure 1. Customer Walking Distance).

The last spatial representation again displays the location of each store as well as the location of various coffee shop competitors (Figure 1. Coffee Shop Competitors).  In this map, the same San Francisco study area was used and the same points were plotted for each coffee shop. The locations for the store’s competitors where plotted through the business analyst tool, add business listing, and searching for the other coffee and doughnut shops.

Conclusions

The spatial representation, Coffee Shop Customers, show the mean centers for each store to be located at almost the same point of the stores themselves, meaning there is a fairly even distribution of customers surrounding both stores. Even though the mean centers appear to be fairly central to each stores location, it is evident that each mean center has been pulled towards the other store’s location. Thus, each store has a considerable amount of customers that come from the location between the two stores.

The spatial representation, Customer Trade Area, also indicates that a considerable amount of customers for each store are located in the area between the two stores. The rings which enclose various percentages of customers extend fairly evenly around each store, reflecting the same even distribution of customers as the mean centers. The customer trade areas, like the mean centers, indicated each store’s customers surround their respective store fairly evenly from all directions; however also show there are considerably more customers in the area between the two stores. The ring enclosing 80 percent of the customers for each store appear to extend toward the one another, meaning each store has a respectable amount of customers in the direction of the opposite store.

The spatial representation, Customer Walking Distance, when compared to the customer trade area spatial representation show that approximately 40 percent of the customers for each store come from a distance of one mile or less. Therefore, 40 percent of the customers for each shop are is close proximity to their respective coffee shop. However, when comparing the area containing 60 to 80 percent of each store’s customer is appears that these customers over a mile to their respective coffee shop. Although 40 percent of each coffee shop’s customer come from less than a mile away, the other 60 percent travel more than a mile, likely coming from the direction of the opposite store as the mean centers and customer trade areas indicated.  

The spatial representation, Coffee Shop Competitors, indicates that majority of the competitors of the two coffee shops are located in the north east. The coffee shop located close to the north east area where majority of the competitors is located has a smaller trade area than the other coffee shop. Because there are more competitors located near this store majority of its customers come from close by. The other store has a much larger trade area, with customers coming from longer distances, because there are far less competing coffee shops surrounding this store.

In addition to the spatial representations which provide information regarding where each stores customers come from, the reports generated in business analyst offer data establishing who each store’s customers are. The community profile report states that within the area encompassing 80 percent of the customers for both stores have a total population of 138,511. Of the population of individuals in that area 26.7 percent of them are between the ages of 25 and 34, and there are 2,400 men than women. The area has an average annual income of $96,083 and in regards to race 59.2 percent of this area is white, and 22.8 percent Asian being the next most predominant race. The service expenditure report stated that within this area the average annual amount spent on food away from home, with a likely portion spent at coffee and doughnut shops, is $4,469.

Recommendations

Focusing on the customers directly between both stores would be the most effective way to maximize the trade area. A considerable amount of customers for each store is located in between both stores, and even as far as next to the opposite store. By addressing these customers both stores can work to maximize and possibly even expand their trade areas in the direction toward one another. The populations surrounding the stores, which consist of 80 percent of each store’s customers, are primarily young adults ages 25 to 34. This area is also predominantly white; however has a significant Asian population of over 20 percent. In addition to focuses on the area between both stores, it may also be beneficial to focus on these particular demographics.