Week 11:
Data Analysis in Practice

Motivation

Our goal in this course is to teach tools and processes for analyzing data to inform decision-making.

You now have some tools for data analysis.

Today, let’s revisit the process.

How do we get from question to answer?

Agenda

Finding patterns in grocery store location

Identifying target markets

Project 2: Q&A

Where should we open a grocery store in AZ?

From Chat GPT

The ideal location for a grocery store in Arizona depends on various factors such as population density, demographics, competition, accessibility, and local zoning laws. Here are a few things to consider when choosing a location for a grocery store in Arizona:

Population density: Look for areas with a high population density, as this is likely to increase foot traffic to the store.

Demographics: Consider the demographics of the area you are targeting, such as age, income, and household size. These factors will affect what types of products will sell well in your store.

Competition: Analyze the competition in the area, including the number and types of grocery stores, to determine the level of demand for a new store in the area.

Accessibility: Consider the accessibility of the location, such as its proximity to major roads and public transportation. This can affect the convenience of shopping for customers.

Local zoning laws: Check local zoning laws to ensure that the location you choose is zoned for commercial use and that there are no restrictions on operating a grocery store in the area.

Some potential locations to consider for a grocery store in Arizona could include areas with growing populations, such as Phoenix, Tucson, and Mesa, or areas with a high concentration of college students, such as Tempe. Ultimately, conducting thorough research and analyzing the factors above can help you make an informed decision about the best location for your grocery store in Arizona.

Refining the question

Our current question: ``Where should we open a grocery store in AZ?’’

Normative. Can we clarify our objective?

Spatial scope. Can we clarify the spatial unit of analysis?

Store format. Can we clarify the type of grocery store?

Refining the question

Normative. Can we clarify our objective?

  • Where would opening a grocery store in AZ most likely generate the most profit in 30 years?

Spatial scope. Can we clarify the spatial unit of analysis?

  • In which county would opening a grocery store in AZ generate the most profit in 30 years?

Store format. Can we clarify the type of grocery store?

  • What type of grocery store format (e.g., supermarket, discount, specialty) would be most suitable in different areas of AZ?

Data

  • Grocery stores

  • Population

  • Income

  • Unemployment rate

  • Land area

EDA (Cluster Analysis)

Let’s explore the data with a cluster analysis

Also, if the market is not in (or close) to equilibrium, cluster analysis may help identify areas with opportunities

3 clusters on: stores, population, income, land area, unemployment

Store Number and Population

Store Number and Unemployment

Store Number and Land Area

Additional Clustering Analysis

  • Perform additional clustering analysis using other relevant variables (e.g., demographics, competition, accessibility)

  • Interpret the clusters and identify potential opportunities for new grocery store locations

  • Use visualization techniques (e.g., scatter plots, maps) to explore the clusters and their characteristics

Clustering Interpretation and Recommendations

  • Summarize the key findings from the clustering analysis

  • Discuss which clusters or areas appear to be underserved or have potential for a new grocery store

  • Provide recommendations on potential locations based on the clustering results and other factors considered

  • Highlight any limitations or caveats of the analysis

Project 2: Q&A

Let’s discuss your ideas and approaches for Project 2:

  • Summarizing data and visualizing patterns

  • Conducting cluster analysis

  • Communicating cluster analysis

Summarizing Data and Visualizing Patterns

  • What are some effective ways to present summary statistics and visualize your data?

    • Scatterplots, histograms, maps

    • Descriptive statistics (mean, standard deviation, range)

  • How can you highlight geographical differences in your variables?

    • Choropleth maps, bubble maps

  • What other visualizations or techniques could be useful for your specific project?

Conducting Cluster Analysis

  • What is your rationale for using cluster analysis to answer your research question?

    • Identifying groups or segments with similar characteristics

    • Exploring patterns and relationships in the data

  • How will you choose the appropriate variables for clustering?

    • Relevant to your research question

    • Capturing different aspects of the data (e.g., demographics, economic factors)

  • What are some potential challenges or limitations of your cluster analysis?

    • Choosing the right number of clusters

    • Interpreting and validating the clusters

Communicating cluster analysis

  • What story does your cluster analysis tell?

    • Sales in segment x are strong.

  • Create visuals to support your story.

    • Bar chart with sales by segment.

  • What is your call to action?

    • We should market segment x.

Summary

  • Summarizing data and visualizing patterns

  • Conducting cluster analysis

  • Communicating cluster analysis