Market Application of Demographic Analysis
Recently, there have been some incredible advancements in demographic technologies. Never has there been a time where retailers, service providers and restaurants (RS&R's), been able to obtain so much valuable information on their potential customers and how to access them. However, some companies get so enthralled with the demographic analysis and information, they tend to forget the other half of the equation: Market Application.
We definitely recommend investing in quality information but interpreting it and then translating it to something that actually can be achieved in the particular market is equally important. Markets vary substantially and so does timing and conditions. For example in 2014, we had one major chain from the US ask us to find them 300 drive thru locations in a three year period in Canada. While the demographics supported the initiative, the realities of the market could not and we declined the mandate. We recognized that various zoning and municipal restrictions (along with supply/demand issues) didn't provide enough opportunities for this group and therefore we could not successfully fulfill their objectives. As a result, the area developers for the chain defaulted on growth requirements and they did not meet their market share objectives (they have less than 25 locations three years later).
We recommend investing in demographic analysis and then matching that investment in local market expertise to maximize the chances of fulfilling your business plan objectives.