Relevant Demographic variables....Race? Sex?

[Moots]

New to the industry and considering investing in building a Car Wash..Obviously, when looking for a site, you want to evaluate as much demographic information for the surrounding area as possible and compare to comps when possible.

Some of these variables are obviously relevant...Traffic Count, Population, Household income, Individual income, etc. etc.

Others, I honestly don't know if they are considered relevant or not in the industry. So, I'm looking for opinions and advice. Let's start with the most sensitive...Race! Do you totally throw it out as a non-issue. If not, how is it factored in and weighted in a decision? In my area, this would be primarily Black and White...is either considered more or less favorable? Does it influence what type of wash might be better for a given community? etc. etc.

Hypothetical - If you're considering building a wash in a community with a 75% Black and 22% White population and find an excellent comp with extremely similar demographics....Population, income levels, traffic count, etc. etc. with the only significant difference being Race....Let's say the comp community is 94% White, 5% Hispanic, and less than 1% Black.

Do you-
A) Totally disregard it as a non-issue and therefore it's a great comp.
B) Think it tells you something, but not necessary sure what...So, declare in a bad comp and eliminate it.
OR
C) Think you can use the comp, but make some assumptions based on this variable. If so, what?

The next would be Sex...Male/Female breakdown... Is a higher percentage of one or the other more advantages, or a non-issue?

Any and all feedback appreciated.

Thanks

 

[robert roman]

“….when looking for a site, you want to evaluate….”?

Answer depends on the problem.

There are three decision levels carwash developers face.

What area or region to build in? Of the potential locations in an area or region which one is best? Which store characteristics to choose for the chosen site?

For example, developers usually build in areas or regions (i.e. county) where there is unmet demand for carwash services.

Unmet demand for carwash in an area can be determined with analysis of demand/supply balance.

One method is to calculate consumer demand as function of the population living within a defined area and spending per capita.

Thus, same store sales and number and type of existing establishments in the area can be used to determine the index of retail saturation.

If the problem is choosing one site location from among several potential site locations, models of sales assessment are needed for each potential location.

There are a number of models available for this purpose.

For example, analogue models are used principally in the carwash industry for estimating turnover (sales volumes) for new stores.

Analogue models are based on the principal of similarity. By finding sites similar in characteristics to proposed site, a good estimate of likely performance of proposed site will be the average of this subset.

Analogue models like checklist method used in OEM pro forma site analysis usually includes between eight and ten major site location factors each one divided into several attributes.

Site specific factors may include area profile, nearest competition, lot position, site access, visibility, traffic speed, etc.

Demographic or segmentation component of these models may include population density, age distribution, income, home ownership, or other variables.

Consequently, great deal of time and effort can be saved by using standard market research methods.

 

[Moots]

“….when looking for a site, you want to evaluate….”?

...Analogue models are based on the principal of similarity. By finding sites similar in characteristics to proposed site, a good estimate of likely performance of proposed site will be the average of this subset....

Robert,
First and foremost, thanks for the response....lots of good information in there. But specifically concentrating on your statement that I've quoted above in reference to my hypothetical question, that you may have answered...But if you did, I missed it.

You say finding sites "Similar in characteristics"...That's my question, is Race and/or sex relevant variables in declaring sites similar?

 

[robert roman]

Site location assessment requires a basic understanding of the relationships between household statistics, traffic patterns and trade area boundaries.

So, instead of answering “no” directly, I suggested you consider looking at the commercially available models.

By examining these models and learning about how they work, you would discover why certain variables are included or excluded.

Ethnicity is irrelevant because anyone that owns a vehicle has the problem of clean, shine and protect whereas male/female is more important from marketing perspective.

For example, empirical evidence shows carwash customers are almost evenly split between men and women.

So, if you conduct a customer satisfaction survey and find only 30 percent of respondents are women, then you probably have a problem.

Male/female also comes into play in terms of perception.

For example, one aspect women tend to judge retail outlets by is cleanliness of bathrooms.

If bathroom is dirty and looks like it belongs in some lower tier convenience store, they won’t come back.

Here is link to primer on assessment you may find useful.

http://www.slideshare.net/GenevaAnalytics01/retail-site-assessment

Now, thanks to President Elect Trump, I guess it is politically correct to say,

Merry Christmas

 

[Moots]

Site location assessment requires a basic understanding of the relationships between household statistics, traffic patterns and trade area boundaries.

So, instead of answering “no” directly, I suggested you consider looking at the commercially available models.

By examining these models and learning about how they work, you would discover why certain variables are included or excluded.

Ethnicity is irrelevant because anyone that owns a vehicle has the problem of clean, shine and protect whereas male/female is more important from marketing perspective.

For example, empirical evidence shows carwash customers are almost evenly split between men and women.

So, if you conduct a customer satisfaction survey and find only 30 percent of respondents are women, then you probably have a problem.

Male/female also comes into play in terms of perception.

For example, one aspect women tend to judge retail outlets by is cleanliness of bathrooms.

If bathroom is dirty and looks like it belongs in some lower tier convenience store, they won’t come back.

Here is link to primer on assessment you may find useful.

http://www.slideshare.net/GenevaAnalytics01/retail-site-assessment

Now, thanks to President Elect Trump, I guess it is politically correct to say,

Merry Christmas

Robert,
Again, thanks for taking the time, I appreciate your sharing your knowledge and experience. And as you suggest, I've got plenty more to learn and plenty more research to do. I do appreciate the link and the Christmas wishes...Hoping you and yours have a Merry Christmas as well.

My question concerning Race and Sex were meant as simply a big picture view...Say from 10,000 feet or higher. LOL! I appreciate there are other intricate details and ground work that needs to be done in this process. But I was just curious, what weight, if any, those variables deserve from a distant overview look at a potential site.

For example, you say:
"empirical evidence shows carwash customers are almost evenly split between men and women."

Assuming that's true, which I have no reason to doubt...It still makes me wonder, does that hold true against all styles of wash throughout the industry, all other things being held equal (clean restrooms, etc)?

I have no data to support it, but I would be SHOCKED if it did. My assumption, and I know those are dangerous, would be that Men probably are much more likely to use a self serve style wash than women. And I would also believe that women are much more likely to use an automatic or conveyor, than a self service wash. So...if my theory is true, while men and women might use "car washes" in general equally...Sex still could be a very relevant issue in looking at building a particular style wash in a particular community.

So, staying with that theme, when you say;
"Ethnicity is irrelevant because anyone that owns a vehicle has the problem of clean, shine and protect"

While I believe that's true, and believe ethnicity is irrelevant in whether or not someone wants a clean car...It doesn't address the issue of...Is Race possibly a factor in predicting ones preferred method (style of wash) in achieving the goal of cleaning, shining and protecting their vehicle?

Understand...I have no idea if it does or doesn't...it's just a data point I have available at this point in the process and trying to figure out if it's relevant or not for the project I'm considering.