Understanding your local customer base is crucial for success as a retailer with a physical shop. A powerful tool widely used is local market research, which involves a demographic analysis of your shop's feeder area. Let's explore how you can leverage these demographics to boost your business.

Why Demographic Analysis Matters

By understanding who lives in your feeder area, you can:

• Profile your product range better to meet local needs
• Adjust your pricing strategy based on local income levels
• Create better marketing campaigns that resonate with your community
• Plan store hours that align with local work patterns
• Improve customer service by understanding cultural nuances

How to Conduct a Demographic Analysis

Step 1: Census data for retailers

1. Visit the Australian Bureau of Statistics website here:
2. Select the most recent census year (currently 2021) - red arrow
3. Enter your shop's postcode in the location field - blue arrow
4. Review the wealth of information at your fingertips; it will go on for pages. Do not let it overwhelm you!

Step 2: Demographic analysis for retail

As a rule, I recommend you focus on these crucial demographic factors:

• Age distribution
• Income levels
• Family structures
• Cultural diversity
• Employment rates
• Education levels
• Housing types

Step 3: Compare to State Averages

Understanding how your area differs from broader trends can highlight unique opportunities or challenges.

Putting Data into Action: A Real-World Example

Let's look at postcode 3173 here as an example:

MetricPostcode 3173VictoriaAustralia

Median Age363838

Median Weekly Household Income$1,991$1,759$1,746

Couples with Children55.4%LowerLower

Unemployment Rate5.4%5.0%5.1%

Key Insights:

1. Younger Population: With a median age of 36, this area skews younger than state and national averages. Consider stocking products that appeal to a younger demographic or families with young children.

2. Higher Income: The median weekly household income is significantly higher than average. This could support a premium product range or luxury items.

3. Family-Oriented: Family-friendly products and services could be a hit with many couples with children.

4. Cultural Diversity: The area boasts significant Chinese, Vietnamese, Cambodian, and Indian communities. Consider stocking culturally relevant products, e.g. Chinese New Year cards. 

5. Slight Employment Challenges: The slightly higher unemployment rate might impact discretionary spending.

Think of products example:

Kids games 

Based on the demographic data for postcode 3173, I would say that kids' games could be a good business opportunity. Here's why, along with some considerations:

Positives:

1. Young population: The area has a higher proportion of children compared to state and national averages:

2. Family-oriented community: 55.4% of families are couples with children, higher than state and national averages.

3. Higher household income: The median weekly household income ($1,991) is higher than Victorian averages, suggesting families might have more disposable income for children's products.

4. Educational focus: Asian cultures often emphasize education. Educational games or those that develop skills might be a hit.

5. Traditional and outdoor board games could be good for family time.

By leveraging demographic analysis, you're not just running a shop—creating a tailored experience that resonates with your local community. This level of understanding and adaptation can set your brick-and-mortar business apart in today's competitive retail landscape.

Get it a shot. It will only take you a few minutes.

I was listening to a talk on retailing. One point that became clear is the growing importance of males in shopping today. We are seeing a remarkable shift underway in today's shopper demographics, challenging long-held beliefs about who does the shopping. Contrary to traditional notions, men shop for basics almost as frequently as women.

Too many retailers are not considering this.

Where there was a family in the United States in 2023 by gender; this was the grocery shoppers. Check this chart below.
 

I found it interesting that if someone is shopping for themselves, men and women are now doing their shopping.

In another study, I found the result was 51% for women and 49% for men. 

Gender consumer behaviour

While the frequency of shopping today is comparable between genders, studies do show notable distinctions in gender behaviour:

• Spending Power: Women spend more per trip than their male counterparts. This difference is why women hold a more prominent role in shopping.

• Shopping Preferences: Men are generally more inclined to shop online and at convenience stores. They like the convenience of these channels. Women seem more likely to shop in physical shops as they prefer the in-person shopping experience.

• Shopping Mindset: Men are likelier to have a predetermined plan and, most importantly, stick to it. If a male comes to your shop, you better have what he wants. Women are more open to impulse purchases.

• Price Sensitivity: Men are typically less price-sensitive than women shoppers. Therefore, you could market higher-priced items to males than females.

Implications for Retailers

1. Optimize Store Layout: Evaluate your store layout. Retailers must ensure that the items men are looking for, such as staple goods and household supplies, are prominently displayed and easily accessible while creating dedicated browsing zones for women.

2. Strategic Merchandising: For males, consider going upmarket. If dealing with women, you need to make sure the area has plenty of cross-merchandising and impulse product placement to encourage impulse purchases and cater to women's shopping tendencies.

3. Gender-based marketing: If you are marketing to men, emphasise convenience, while for women, highlight promotions, new products, and their in-store experience.

Adapting to the New Normal

You need to consider your shop to better accommodate these trends.