Help with Demographics Research

Discussion in 'Growing and Managing a Business' started by Ocean Archer, Jul 2, 2012.

  1. Ocean Archer

    Ocean Archer
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    Jun 19, 2012
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    In another thread I said I wanted to open a 20,133 square foot baby super store because there isn't another baby super store within 1 hour driving distance.

    I'm working on my business plan, and I'm stuck on the percent market share I anticipate. I gathered a lot of statistics. I hope you guys can help me make sense of it.

    If the local market is $15,000,000 per year, how much market share can my store claim? Can this number be derived from an objective number like square footage percentage?

    I couldn't find 100% local stats, so I had to extrapolate some national stats:

    Baby products is a $28B/yr industry in 2010 (couldn't find figures for 2011). 4 Million babies born per year, so the average baby gets almost $7,000 spent on its first year of life (not including healthcare and daycare). This corroborates independent surveys from sites like babycenter ($6,800) and a new mom's site ($6,500).

    My city has a population of ~100k, with a trade-area population of 197k. 40k of that are university students, so I can't count them, so I'm left with only 157k total trade area pop. Birthing rate is .014 of total population, same as rest of nation, so that's ~2200 babies per year, which gives a total trade area market of 2200 * 6,800 = $15,000,000 per year. Median household income in trade area is $56k compared to $51k nationally.

    My city has a couple very small specialty baby stores (less than 800sf each) as well as big boxes like Target, K-Mart, Sears, 2 Wal-Marts, and 10 supermarkets/grocery stores that sell baby products. The combined square footage of all the baby stores and the baby products display area of the big boxes total just under 18,000sf.

    My store will be laid out almost identically to Buy Buy Baby, both in size and selection. If you've ever been in one, you know what it's like. If not, just think baby products version of Bed Bath and Beyond (parent company of Buy Buy Baby).

    As for marketing, we'll give a pamphlet with free gift to every OB and pediatrics office for patients' initial sign-up visit as well as hospital labor units and birth centers.

    Based on the above information, can I get any reliably objective measure of what percentage of the total local market share my store can claim? If not, is what other information can I get, and where can I get that info? Do I need to survey hundreds of shoppers in Target's baby section and ask them if they'd drive 5 miles to shop at my store instead of Target?


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