Our approach to defining our target customers and a target location to operate our virtual kitchen
A series of 50 posts in 50 days - Day 19/50
Our target customer is:
Interested in delivery/takeout
Tech savvy - they think "digital first"
Willing to pay a slight premium
1. Interested in delivery/takeout
Younger, fast-paced, busy, in dense areas where 3rd party apps are used and familiar. Dine out frequently, like to indulge after a long day/week.
This includes:
College students
Recent grads / YoPro's
Small families
Young couples
Gen Z
This excludes:
Seniors
Empty nesters/boomers
If we do get any orders from these customers, great! Just not anticipating them to be the main audience.
Which feeds into # 2.
2. Tech savvy - they think "digital first"
While we would like to be in a heavily trafficked area to grab customers that see our physical location, a lot of what we will do is digital.
Digital discovery/conversion, ability to target with digital experiences and ads on social platforms, familiarity with 3rd party apps, online ordering, etc.
The proxy we used for this was age. We think this customer is 14-45 years old. While teenagers may not have much income, Gen-z are sometimes the decision makers in their households regarding food.
They see whats trendy, they want to be cool, and this funnels up to mom/dad.
Gen-z LIVES on Tiktok. That will be a new medium for me. But while Instagram is table-stakes, Tik Tok is where you can win.
3. Willing to pay a slight premium
We plan to price slightly higher for "indulgent" food and a more premium delivery experience.
This ones tricky, because we don't think that willingness to pay is directly correlated to household income, as the most wealthy probably wouldn't order much.
But we also don't think the lowest income neighborhoods will order much either, as McDonalds is a way cheaper option.
Our conclusion was that we need to hit middle class / mid-upper class people.
Identifying an operating location based on target customers
Knowing who our target customer is, we started to look at target locations we could exist to serve them:
Key factors to define our target locations to operate
Access to target customers
Population density in 5 mile radius
Accessibility to major roads
Easy for us to get to
Located near some big players
1. Access to target customers
Based on the target customer needs listed above, and our local knowledge of Columbus, we can pretty easily prioritize the different suburbs.
We listed the following for all suburbs/neighborhoods around the Columbus area:
Population size
Avg household income
Residential density*
For #3 we just eyeballed google map views and determined low (1), med (2), high (3). We focused on the top 10.
2. Population density in 5 mile radius
We want to maximize this. The more people in our delivery radius, and the more "full" that radius is, the more customers we can reach. We did 2 main things:
First - Googled "draw radius on map", found this site and picked addresses in the center of our target neighborhoods. This validated "how full is this circle". We wanted to minimize the amountt of space that was just farmland, undeveloped, or industrial.
Second - went to commercial real estate platforms like Crexi and Loopnet and searched for properties as close as possible to the center of that circle. These almost always come with downloadable pdf reports of the area. Density in 1, 3, 5 mi radius, income levels, traffic, etc.
One tricky tradeoff is that in cities like Columbus, density can mean lower income levels, so while densely populated, might mean less affinity to purchase delivery food.
On the other hand, wealthier areas = larger homes, larger yards, less density. Even though they may have more disposable income, theres just less of them.
Hard to find the right balance.
3. Accessibility to major roads
Need to be short drive from major "arteries". Ideally less than 1 mile. If we're 3 miles from a main road, it makes delivery times longer for customers in our radius.
We eyeballed this + grabbed it from real estate reports from step 2 above.
4. Easy for us to get to
This one is just personal preference. Ideally 15-20 minute drive or less from our commissary / prep area. Kind of a pain to drive 30+ minutes there and back across town every day.
5. Located near some big players
Our thinking: if some of the big guys placed a location here, they did some analysis to justify the demand. And due to the way we are differentiating, we think we can steal some of their share.
Better to be near a few competitors than isolated.
Where does that leave us?
For anyone interested / familiar with the Columbus area, our target locations after following the above steps are:
1. Grandview - Includes Grandview + parts of Hilliard, campus, downtown, and UA. Younger customers, trendy area, on the rise. Super dense. Downside is a rougher patch called Franklinton to the south, very low income levels/unlikely to be a customer
2. Upper Arlington Corridor (Lane ave) - Includes UA + parts of Dublin, Hilliard, Grandview, Campus, and Downtown. Downside is its a slightly wealthier/older population, not sure how well this translates to delivery orders.
3. Henderson Rd Columbus/Dublin corridor (east of Scioto but west of Olentangy) - hits parts of Dublin + Bridge park area, UA, Campus, Worthington, Clintonville. Great road/delivery access. Downside is a chunk of the radius is the OSU airport, aka wasted space for our business
Next I'll outline what we did to actually find a location that wanted to partner with us in a win-win scenario, that would fit into the above locations!