Rocket Bomber - article - retail - business - Rethinking the Box: Location - Location - Location... and will it play in Peoria?

Rethinking the Box is a collection of ruminations on retail: a unique combination of sober (and sobering) business analysis mixed with drunken, inflammatory personal invective.

Previously:
Study your History. Recognise your Motives. Know your Customer Base, and your Staff. Find your Niche. Consider your Product Lines, take a second look at What the Customers Want, and then stare again in dismay at the Profit Margins. Try calculating the rent and the revenue from inventory (with a side of coffee) and compare your numbers to average industry per-storefront sales.

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Last week month I went over some retail theory. Let’s translate that into retail and real estate application & practice.

I could do this for my hometown, obviously, but I’m not quite ready to open up shop yet (a small matter of 2 million dollars… I’m a tad short at the moment) and I’d hate to give away the perfect spot to someone else for their stinkin’ bookstore. So we’ll pick a town at random, do some basic research, narrow in on a neighborhood, and then maybe see if Google Maps has some street level views for us.

Oh, yeah: we’ll be able to do this from the comfort of the internet (I would say from the ‘comfort of home’ but I know some of you are at work, some are at a coffee shop and about 12% of you are clogging up my bookstore because we now offer free wifi) — and did I say random? As long as our target could be anywhere, why not answer the age-old question, “Will It Play in Peoria?“

Peoria (named after the Peoria tribe) is the largest city on the Illinois River and the county seat of Peoria County, Illinois, in the United States. As of the 2000 census, the city was the fifth-largest in Illinois, with a population of 112,936; by 2007 it was the sixth-largest city and had population of 113,546. The Peoria Metropolitan Statistical Area had a population of 372,487 in 2008, making it the third largest metropolitan area in the state after Chicagoland and the Metro-East portion of the St. Louis metropolitan area. (from wikipedia)

So this is our target. Not exactly the back woods, or the far end of nowhere. Peoria is in fact a small city like at least 200 others (it ranks 217th) and it is home to Caterpillar Inc., a Dow component and Fortune 500 company. There is a community college and local private university; Illinois State University is also nearby, just 35 miles away.

Peoria has both a Barnes & Noble and a Borders, and not one but two comic shops. There’s a symphony, an opera, a zoo, interstates, an airport, blah blah blah — you can read wikipedia as easily as I can for the rest of it. It’s a normal, boring small city. —no offense intended, Peoria: you’re a damn sight more interesting than the place I grew up in.

So you could start at the Town Hall, or the Bradley University Campus, or the Madison Theater — or the Illinois River, for that matter — and walk around and get a feel for the neighborhoods and maybe luck across a storefront for rent in a nice looking part of downtown, in a quaint brick building from the 20s or 30s — so cute, and look there are still some shelves and fixtures from the last guy who went out of business here. (note: not the best sign for retail)

Or we can drop some science on it.

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I was half-joking about the storefront above. I have no idea what downtown Peoria looks like. There may in fact be a thriving shopping district there for all I know.

In fact, I know nothing about the neighborhoods of Peoria and it’s surrounds. That is to say, I know nothing yet.

What’s our criteria for a retail location?
Well, I want to be where the people are, and since I’m opening a bookstore I want to be where smart people are (or at least pretentious people who spend money on books because they want to look smart, those are good too), and I’d like to be where the people with money live. Of course I’m speaking in broad generalities, but this information would be good to have, right?

If you want to know about people, ask the Census Bureau. (This is one of the best uses of taxpayer money ever.) Before we tap the CB, though, let’s start with the map:

Head on over to maps.huge.info/zip.htm, and let’s plug in our target zip code (61605, Downtown Peoria) — if you don’t happen to know the zip code yet, well, just start clicking the map and scan around until you find your target, which is what I did last night. Zoom out a bit and look at the surrounding zip codes — you might want to start writing these down, actually.

Now, point your browser to www.census.gov and look up each zip code. Easy, right?
…OK, so it’s a mess, and you have no idea where to start. That’s fine, because someone at the Census Bureau has written directions on how to find exactly the information we need, by zip code. Gosh, they’re smart. (and I’ve a feeling someone—a lot of someones—have asked exactly this question before.) This will be a lot of clicking and writing and typing — and if you have the time it’d be 2-3 hours worth of work. And worth it, but still a pain in the ass.

If you’re willing to spend a little money, I can make it even easier for you:

Uclue is a research service I’ve used in the past, and have been quite pleased with. The folks they have working there are top notch, professional (but with a sense of humour), and more than willing to tackle tricky (or time consuming) research tasks of all types: From “this is driving me nuts, what’s the name of the song with this lyric” to [*cough*] “Median income and education levels by zip code for Peoria, IL”. Most of the previous questions asked are publicly viewable so you can go take a look for yourself.

Late last night I asked the question and I had an answer before breakfast. Not only that, I asked for (and received) the appropriate census information for all 616xx and 615xx zip codes, and the Uclue researcher even set it up as a spreadsheet for me. Of course I offered a premium (for prompt service) and also tipped well — if you really like the answer they have a mechanism for tips — but I also value Uclue and will often price my questions a bit higher than the information might strictly be worth because the service is excellent.

Maybe I paid too much. If a lot of us ask this type of question I’m sure supply&demand will figure out just what a fair price is — but for less than a c-note I’ve income and education numbers for a place I don’t live in and and have never been to, and in a format which can be quickly and easily sorted. If I actually were looking to open up shop in Peoria, this information would be priceless.

Zip codes are handy because they’re used by a number of independent sources (like the Census Bureau), the post office originally set them up (and continues to maintain them, occasionally adding new ones) so that while not uniform in size or population they fall within manageable ranges for both, and most importantly, every address — and by extension, every real estate listing — has one.

So what’s the best address in Peoria?

The five zips with the most households are

• 61554: 17,770
• 61614: 16,542
• 61604: 14,477
• 61611: 10,354
• 61571: 8,283

The five with the highest median income are 61525, 61535, 61526, 61547 and 61528. These are less than ideal, though, as each of these zip codes has less than 2000 households apiece. (more expensive homes on much larger lots out in the suburbs and exurbs — wait, does Peoria rate ‘exurbs’? — if you were working with a map you’d put gold stars on these: you’d want to be near them, certainly, but perhaps not in them)

Considering both income and population (even doing something as simple as multiplying one against the other) yields this top 5

zip: households/median income

• 61614: 16,542/47,030
• 61554: 17,770/40,220
• 61604: 14,477/35,878
• 61611: 10,354/43,051
• 61615: 8,157/51,548

and considering the number of college graduates (bachelor’s degree or higher)

• 61614: 9,175
• 61615: 4,835
• 61604: 4,315
• 61550: 3,916
• 61554: 3,647

And it looks a lot like we’ve narrowed our search from 55 zips to just 4: 61554, 61604, 61614, and 61615. Going back to our map:

61604 wraps around zip code 61606 (which has Bradley University in it) and lies just to the NW of downtown Peoria. 61614 is immediately north of that, has 4 golf courses in it (as a Peachtree City, GA native son I know exactly what that means) and in the 2000 Census, also included the area now designated zip code 61616.

61615 is just north and west of both and moreover, seems to be defined by I-474: the north half of the bypass runs smack through the middle of the zip code and it includes the I-74/I-474 interchange. (in fact, it looks like the boundary lines for 61615 were drawn after the interstate was built, as it rather suspiciously follows the curve of the bypass loop.)

aside: Both the B&N and the Borders in Peoria have addresses in (wait for it) 61615.

Not that we have to (or should) slavishly follow the major chains, but it’s a nice little confirmation of my data on the part of their respective real estate departments.

…and actually, given that both majors are on the west side of the river (and also sparing a glance at the locations of the local comic shops) I might first recommend something in 61604, closer to downtown and the university, if possible — in part because I actually like downtowns, and I’ve a feeling a small city like Peoria might have some nice, walkable shopping available — particularly near a college campus.

Alternately, an address in East Peoria just off of the interstate (61611 prefered, or 61550 if a bigger location was available at a cheaper rent) would put us closer to both the community college kids and the ISU campus north of Bloomington (just a half hour away down I-74), while still being in ‘Peoria’.

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We can repeat this exercise for hundreds of other cities and towns. (or you can, and I might be persuaded to if there’s money in it.)

The point I’d like to make is that you don’t have to go in blind: resources are available that will paint a pretty clear picture of where the potential readers are. These numbers will also be awfully nice to have when you walk into the bank, and start asking for money. Market research is a basic necessity for any business, and when you are talking retail, demographics (and real estate) are your market.

If Peoria had an art school — offering a sequential art degree, which would be pure icing if true — we might even consider this city with less than a half-million people in it as a candidate for a Graphic Novel Bookstore. I’m not sure I could make my idea work here, but I could certainly find a home for a strong independent bookstore in Peoria (looks like there are two, in 61616 and 61554).

(and so there might be room for one or two more, in the other two areas I identified: 61604 and 60611. Peoria entrepreneurs, take note!)

If you live in a much larger metropolitan area, you could use these same methods — either on a larger scale, or concentrating on just one county or area (north of I-285 and between I-75 and I-85 in Atlanta, for example) either based on where you currently live or where you see potential for growth. And obviously, there are hundreds of Peorias all across the United States, and similar townships elsewhere (though you’ll have to figure out your own analogues to zip codes and the Census Bureau.)

It’s work. Duh. We’re talking about business here. Even if you are following a dream, don’t forget to ground it in a little business.

Resources:

The U.S. Naviguide Co. set up the Zip Code Map I liberally used above; it’s built on top of Google Maps so the interface should be familiar, and while they have a number of products for sale, the zips map is free to use (but not to copy, which is why there are no screen shots above).

The U.S. Census Bureau rocks. (but then, I’m a numbers geek…) Here’s the link to their detailed instructions on finding census info by zip code

I also made use of the American Booksellers Association store locator, the Comic Shop Locator, B&N and Borders store locators (y’all know those web sites, right?) and the National Center for Education Statistics School Locator — which is handy for finding out how many (and which) colleges, universities, and libraries are in your community.

Uclue did the heavy lifting for me on this one; hell, if you throw enough money at them (with a link to this article, so they know what you’re asking) they’ll likely research the zip codes and identify the best bookstore locations for you. It’ll be expensive, but what’s a few hundreds for convenience?

please note: Uclue provided no money or other compensation for my testimonial. In fact, my queries—as linked above—cost me $80 in this instance. I just like the service.

Coda: The Street Level View from Google Maps for 61606 shows a pretty nice residential neighborhood. It’s not exactly the view of the street I’d be able to open a storefront on, but I wouldn’t mind being just down the road from here. (or living here, for that matter)