“We’ve consulted our maps and compass and have found a terrific location for a store in Providence, RI,” says the Trader Joe’s website in a new location announcement. In November 2022, the popular grocer opened its first location in Providence, Rhode Island, breaking into the new market with a site near the heart of Providence’s Downtown. Before the new store opened Trader Joe’s had just one location in all of Rhode Island, 20 minutes away from Downtown Providence in Warwick.
Rather than taking over an existing grocery location, the new Trader Joe’s store was built as part of a new multi-purpose construction project at the site of the old freeway route. Without historical data on that site to rely on, the popular chain had to get creative to understand the market, its popular areas, the competitive landscape, and prospective shoppers.
In order to do this kind of market-level analysis, it’s best to take a macro approach to site selection using consumer behavior data. A macro approach can help a brand analyze a general market area versus a specific location. Using location data, brands can understand where consumers already like to congregate, trade areas of competitors in the market, demographics and brand affinities of people in the area, and more.
Here are some of the questions that were critical for Trader Joe’s to answer when considering the new location:
What are the most popular areas of Providence?
When entering a new market, it is important to know where consumers are already gravitating. Providence has the highest levels of activity around its Downtown, and in the Fox Point and College Hill neighborhoods, near Brown University. These areas are also near major transportation routes, the I-95 and I-195 highways. The Fox Point neighborhood in particular, where Trader Joe’s ended up locating the new store, is a popular area near the highway and just a short half-mile walk from Brown University.
What are the trade areas of competitors in the market?
When entering a new market, it’s critical to understand how competitors in the space are already serving the area, and where there may be opportunities. The popular area around Downtown Providence already had a few competitors, including two Whole Foods locations, an Aldi and a PriceRite. While these were all within 1-2 miles of the Fox Point location Trader Joe’s ultimately chose, the densely populated, walking-friendly area still had enough demand to surface an opportunity.
What are the demographics of the area?
To ensure a good fit, Trader Joe’s also needed to ensure that the demographics of the area match their customer profile. Here are a few of the key demographic elements of the Fox Point neighborhood they were looking at:
- The area is dense with students with its location near Brown University – nearly a third of the population is under 25 years old (31.5%).
- The area also has a higher median household income than for the rest of Providence ($63K versus $55K, respectively).
- The audience in the area over indexed as fast food lovers – for example, they were .92 more likely to visit Burger King than the average. This could align with Trader Joe’s selection of quick and easy meals.
How is the new store doing?
The new Trader Joe’s opened on November 3, 2022 to great fanfare. In its first 2 months after opening, the store saw 15% more foot traffic than the other Trader Joe’s in Rhode Island. By December, 2022, the new Trader Joe’s exceeded foot traffic for the average grocery store in the area by 9%. And customer reviews are highly positive, indicating there’s likely to be a loyal group of customers returning regularly to the store.
Who is shopping at the store?
The new store is attracting visitors from all over Providence. The trade area shows that the grocery store is attracting customers especially farther towards Barrington and Bristol, an area that lacks another Trader Joe’s option.
While the median distance traveled to the new Trader Joe’s is 6.4 miles, it’s also very popular with students and others within walking or biking distance to the store. Here are a few of the customer groups that have been vocally welcoming the new location:
Navigating New Markets with Data
More than a map and compass, making a solid choice for a new retail or restaurant location requires good data. And while good data is critical for any site selection, it’s even more critical when entering a new market. High-quality data is the key to understanding consumer patterns, the competitive landscape and performance, and demographics and brand affinities of consumers in the area.
Want to learn more? Check out Near’s How-To Guide to Site Selection Using Consumer Behavior Data or get a demo.