Starbucks’ Real Estate Planning Strategy

Opening a new Starbucks location requires complex data analysis.

What are some variables Starbucks look at?

1. Population

2. Neighbourhood Income: Minimum $60K median household income

3. Age: between 18-40

4. Landmarks/Industrial Area: Locations near offices or university.

5. Traffic: Atleast 25,000 vehicles per day

6. Location: High visibility. Preferably corner stores with multiple access points

7. Crime Rates: Safety of employees and the store is a priority

8. Smartphone Ownership: App usage builds loyalty (Starbucks Rewards) and creates opportunity for the company to upsell. Also, allowing customers to make payment online avoids long queues in the store.

These are some of the variables the coffee giant uses to forecast economic performance of the store.

“The A.I. technology at the heart of this application is location-based analytics. This is also known as mapping or GIS (Geospatial Information Systems).” – Was Rahman

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