Two coffee shops in San Francisco, California wanted analysis performed
on their customer bases to better understand their markets and their
customers.
Store 1's customers are primarily located around the Western Addition of
San Francisco, with major populations also coming from Chinatown, the Marina
District, and the Richmond District (Figure 1). Store 2's customers are primarily
located between the Outer Mission and the Mission District, with a smaller
westward concentration in between Monterey Boulevard and Portola Drive (Figure
1). The mean center for Store 1’s customers is located ¼ mile southwest of the
store, suggesting that the population is concentrated fairly evenly around the
store, with slightly more customers southwest of the store’s location (Figure
1). The Mean Center for Store 2’s customers is ½ mile north-by-northeast of the
store’s location. This suggests that there are more distribution of customers
for Store 2 is more widespread, and the map supports this by showing a large
number of outlying customers as far as Chinatown and the Marina District
(Figure 1).
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| Figure 1: Store Locations & Mean Centers |
Their competition is concentrated in the Financial District between
Chinatown and I-80, with some other locations throughout the Mission District
(Figure 2). The stores in the financial district prevent either store from
receiving barely any customers from that district, though the impact is more
pronounced on Store 1 (Figure 1). The competing stores in the Mission District
limit the concentration of customers in that area, though Store 2 is still able
to maintain a fairly strong customer base regardless of the competition
(Figures 1,2).
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| Figure 2: Competitor Locations |
Both stores exist in completely different markets. Figure 3 shows
Customer Derived Trade Areas with 40% of the customers within the yellow ring,
60% of the customers within the red ring, and 80% of the customers within the
blue rings. The stores are both in very different neighborhoods with very
different client compositions.
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| Figure 3: Customer Derived Trade Areas |
Analysis of Store 1’s trade areas indicated that the customers within
the 60% ring spend the most on food away from home, with a spending index of
148 (100 is the national average). The 40 and 80% rings had spending indices of
129 and 136, respectively. Among the trade areas for Store 1, the 60% ring has
the highest median household income, and the lowest racial/ethnic diversity.
The household sizes in Store 1’s trade areas are all between 1.81 – 1.78,
suggesting that there aren’t many families in the area.
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| Figure 4: Store 1's trade area information. |
Customers within all of Store 2’s trade areas have higher average
spending indices than Store 1’s 60% ring, with the 40, 60, and 80% rings having
151, 159, and 161 respectively. Store 2’s 80% ring has the highest household
income, lowest white population percentage, and the highest Asian population
percentage among all of the trade areas. Store 2’s trade areas have much lower
black populations, much higher Hispanic populations, and substantially more of
the population identifying as “Some other race alone”, than Store 1’s trade
areas.
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| Figure 5: Store 2's trade area information |
Almost all of Store 1’s customers live within 1.5 miles of Store 1.
Store 1 is in a part of the city with a much more traditional street grid which
makes it easy for customers to walk to the store directly. Store 2 is in a part
of San Francisco with irregularly organized streets, which cause the drive time
area rings to be slightly shorter, in Euclidean distance (Figure 6).
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| Figure 6: Drive Time Areas for both stores. |
According to my analysis, Store 2 is in a demographically preferable
position. The population’s higher average household size allows for higher
disposable income, which allows for more spending on coffee.
