The Best Location to Open a New Shop

This section drew the conclusion based on the retail sales data, Australian demographic figures such as age, income, spatial analysis, and regression model to ensure the optimum sales opportunity will be captured. We combined the three types of analysis together which will be explained in different sections as the business aspect, statistical aspect, and spatial aspect.

Statistical Aspect

According to the regression model, the team has developed and the corresponding p-value of each indicator, it is suggested that the total population, number of kids, and the number of the medium-income populations are the good predictors of the quantity of products sold at this geographical level (SA2). So, we scoped down the alternatives by picking the top 25% quantile in each category beginning with the total population with the cutting point at 14,159 persons per area, and then, using the number of mid-income persons with a cutting point of 12,329 persons per area. After that, we took consideration of a number of kids as we considered that this group of the population should be the main customer of the business as they can generate a big amount of revenue so we seek for the location that has a high number of children (0–14 years old) and could drill down the choices to 35 records.

Business Aspect

Although the median household income is not included in the regression, we believed that a good retail location must be in the area where potential buyers have a high buying power, so we then take this factor into account using the same method, top 25% quantile, and we got down to 9 areas of interest.

Spatial Aspect

From the spatial analysis perspective of the existing sales data, most of the top 20 high sale volume shops are in the metropolitan area so we actually started the process with choosing the area that is in the metropolitan before everything else and then applied the method again to choose the 4 candidate areas out of the 9 which was filtered by the median household income before. Selecting the candidate, we tried to diversify the option into different states and look for the area that has or near the railway, and high profitable shop but not too close to competing with it. Besides, we also looked for the strategic location which has a potential neighbor that is to say not only it passes the criteria mentioned earlier but has to be in the center among the other areas that passes the same criteria as well (used in an applicable state like the NSW region since it has many qualified areas), so the shop can take advantage of the proximity of the services area (Figure 13).

Spatial analysis of potential suburbs to set up the new shop

After determining the 4 candidates' location, the regression was used to predict the quantity of products sold of each candidate and we selected the Ellenbrook because the result showed that it has the highest value at 9,487 followed by Quakers Hill 7,937, Mount Annan 1,739 and Berwick 621. The value of Ellenbrook is very high that, on average, it could be in the top 3 of the company most sales branches replacing the Booragoon which has the sales number at 7,219 quantity sold per year (Table 3).

Predicted quantity sold for four candidates

During the process of researching more evidence to support the decision, we found that Ellenbrook was placed to be the key business suburb and commercial center for the city of Swan this year which indicates the huge commercial potential and consumer markets. (City of Swan, 2019) Moreover, the same sources mentioned that the suburb has the largest population growth within the region according to the Australian Bureau of Statistics (ABS) and with the children population contributed to 30% of the total population which still the highest ratio among the 4 candidate areas. In one word, we recommended opening a new shop in Ellenbrook.

P.s This is part of my analysis task taken from the group assignment.