Targeting Locational Demographics
Demographics, or the statistical characteristics of human populations used to identify markets, are of utmost im-portance to garden centers, especially those expanding into new areas. Demographics can determine a lot for retailers: Depending on a store’s location, the average price point, most popular products, even store layout and design can be affected.
Think about it: A garden center in an area saturated with young, single renters may carry less landscaping materials than one with many home-owning families. Working-class neighborhoods may require lower price points and less specialized inventory than an upper-class area with residents who have a lot of cash to burn.
When a garden center outgrows a location or wants to open additional stores, it is necessary to find new places to build. When looking for those places, it is important to consider demographics: not only the demographics of potential areas but the ideal demographics you want your business to thrive in. A neighborhood’s median income, education and age are only a few of the factors to consider.
Choosing A Location
Deciding to open a new location or move your current location is no small decision. Often, it involves years of consideration and planning. Ed Pasquesi, CEO of Pasquesi Home and Gardens, Lake Bluff and Barrington, Ill., estimates he actively considered moving from the company’s old, outgrown location to the new Lake Bluff location five years before it happened.
The search takes time because each possible location has variables to consider: How much space is available? Is there room to expand? How close it is to competitive stores? What types of residents live in the area?
When Jack Bigej, owner of Al’s Garden Center, Woodburn, Sherwood and Gresham, Ore., built his first store, he did not consider the neighborhood’s demographics. “I just bought a piece of property and said, ‘Well, it’s on a major road; we’ll just build a garden center here’,” he explained.
What he learned is that the neighborhood is comprised of blue-collar workers who value a bargain. His newest store in Sherwood is Á in a white-collar area and has a different customer base. “We have three stores, and among the three of them it’s just a day and night difference on what we can sell and what we can charge for it,” said Bigej. The stores exist on three sides of Portland and are roughly 40 miles apart. Though different, Bigej pointed out, the three locations are doing well, and if he opens a fourth location, Bigej feels he’ll take a closer look at demographics beforehand.
Many retailers study demographic information closely prior to choosing a new location, and John Darin, president of English Gardens, which has five stores in metro Detroit, Mich., does just that. The first aspect he looks at is the housing market; then he considers the street the property is on and the amount of traffic it gets. After these considerations, he looks closely at demographics. “When we look for demographics, we’re looking for two things: We’re looking at density and median income. We take the density and the median income and do a formula. Then we match that against our existing stores,” said Darin.
Once Darin takes into account the traffic and marketplace competitors, Á he is able to create a sales projection for the potential location based on the model for other stores. The projection is weighed against what English Gardens can afford to invest in the location; based on the results, a decision is made about the location.
Some garden centers search for locations that have an ideal demographic: Randy Pike, president/CEO of Pike Family Nursery, located throughout metro Atlanta, Ga., looks at areas with $75,000+ household incomes and 50,000-75,000 people in about a 5- to 7-mile radius. His target age group is between 32 and 45 years old.
Ideal demographics can vary among garden centers some may choose to cater to high-end clients, while others prefer serving consumers with unique wants or working-class families. Three garden centers English Gardens, Al’s Garden Center and Pasquesi Home and Garden each recently opened new locations (in different states), yet all three of them have some demographic similarities.
English Gardens. The area around English Gardens’ new Ann Arbor, Mich., store is populated with highly educated people, said Darin. The store is positioned in a shopping center alongside other retail businesses such as a Kmart and a sporting goods store. The Secretary of State’s office also is located in the center, which means there is a “built-in” stream of people stopping by to get their drivers licenses issued or renewed.
Al’s Garden Center. Bigej describes the demographics of the neighborhood around the Sherwood, Ore., store as white collar and high tech with a lot of young families with children. “We’re getting 100 kids out to our kids club meetings,” he explained. The consumers in the new neighborhood are generally not bargain shoppers, and Bigej has found that “they’ll buy anything.” He noticed that price was rarely a problem for the new store’s clients.
Pasquesi Home and Garden. Pasquesi Home and Garden recently moved from its Lake Forest, Ill., location to Lake Bluff, Ill., because the business outgrew its original space. The new location is 31?3 miles from the old one because Pasquesi wanted to stay in the same market area. He described the demographics of the location as higher-end. People who live there have a good amount of disposable income.
Though the three centers are located far from each other, there are similarities among the demographics of their respective areas. Figure 1, page 38, shows a sampling of demographic data for each location from the U.S. Census Bureau. It shows, among other appealing demographics, that median household income does not dip below $60,000 for any of the three locations.
Doing The Research
There are numerous resources available for those seeking demographic information about a location. For the most part, the resources are free for you to use and only need to be sought out. Darin recommended checking local newspapers for density and median (never average) income statistics and state or county highway departments for information on traffic counts. Bigej suggested building a relationship with a real estate agent, who is likely to have most of the data you would need.
The internet is another valuable tool for demographic research. Try visiting your city’s, county’s and state’s Web sites; many of them contain local demographic information. Some Web sites such as www.hometownlocator.com offer community profiles searchable by city, county, area code or zip code. Another good resource is the U.S. Census Bureau, www.census.gov. The site has a wealth of information that can also be broken down by city, county, zip code, etc.
No matter if you’re moving to a new location or staying where you are, when it comes to demographics, it’s all about knowing your market. If you are aware of the demographics in your area, you can tailor your product lines to suit the local tastes. Pasquesi described the different departments in his new location from an upgraded pet supplies department to a home accents lifestyle center to a coffee area, his stock is geared toward a high-end crowd.
Marketing to certain demographics is not a new idea: companies large and small engage in the practice. Recently, Wal-Mart announced it is looking for a new advertising agency to help them cater to higher-income, urban markets and upscale shoppers. Additionally, the company introduced more stylish merchandise and expensive TV sets and revamped their store interiors, according to the New York Times. Garden centers can and do target their demographics in the same way.
The bottom line is, if you are thinking about getting a new location, “Study your demographics closely and don’t overspend on your development costs,” advised Darin. Following his advice can help your new ventures be just as successful as the others.