Identify retail gaps with void analysis

As demand for healthy foods and beverages grows, power juices and smoothies increase in popularity. A successful juice bar chain in Frisco, Texas, wants to expand to neighboring cities in Collin County. But does the area already have similar businesses that may reduce demand, or is there a gap that the juice bar can fill? To answer these questions, you'll perform void analysis in ArcGIS Business Analyst Web App.

Void analysis identifies gaps in specific businesses and services in one area compared to a similar area. In this tutorial, you'll use it to compare Frisco to a neighboring city and determine whether that city has a gap in juice bar businesses that the chain can fill by opening a new location. While this workflow uses void analysis for retail, void analysis can also be used for services, real estate, and business networks.

This tutorial was last tested on November 17, 2023.

Requirements

• ArcGIS organizational account with a Publisher, Facilitator, or Administrator role in an ArcGIS organization (see options for software access)
• ArcGIS Business Analyst Web App Advanced

Prepare for void analysis

You know that the juice bar in Frisco is successful, and you want to find a similar area nearby that would be a good candidate for another juice bar location. In a void analysis, you choose an area to analyze and use an area you already know as a reference point.

You want to find an analysis area that is like the reference area (Frisco). Juice bars are primarily frequented by millennials and health-conscious people with high income. The best analysis area will be comparable to Frisco in these demographic categories.

Create a project

You'll create a project in the ArcGIS Business Analyst Web App and locate areas in Collin County where you may want to site the new juice bar.

1. Go to Business Analyst.
2. If you are not signed in, click Sign In. Sign in with your ArcGIS organizational account.

   Note:

   If you don't have an organizational account, see options for software access.

   Your account must be licensed to use the Business Analyst Web App. If you are the administrator of your organization, you can assign yourself a license. Otherwise, you'll need to contact your administrator for permission.

3. If necessary, close the What's New in Business Analyst 23.R03 window.
4. If this is your first time signing in to the Business Analyst Web App, on the message asking you to add a profile image, click Skip This Step. In the next window, click Create Project and go to step 5.

   Note:

   If you have used the Business Analyst Web App before, you can proceed with the next step.

5. If necessary, on the ribbon, click the Home tab. Click New project.

   

   The Create project window appears, with the option to name your project. The project name must be unique in your organization.

6. For Project name, type Juice Bar Void Analysis and add your name or initials. Click Create.

   Note:

   If a message appears, you can check Open new projects as soon as they are created to automatically open projects when they are created.

   A notification appears, explaining that a project is being created. The process may take a few moments. When it finishes, either a message appears to explain that the project has been created, or the project opens automatically.

7. If necessary, in the message window, click OK. In the list of projects, point to your Juice Bar Void Analysis project and click Open.

   Note:

   Depending on your organization's settings, the default extent and appearance of your project may differ from the example image.

   The project map appears, showing a basemap that is zoomed to a default extent.

   

   Next, you’ll add Frisco to the map. The successful juice bar is in Frisco, so you will use Frisco as a point of comparison for your potential new location.

8. On the ribbon, click Define areas and choose Select geography.

   

   The Select geography pane appears.

   

   In the Select geography pane, you can search for a specific geography, select a geography from a layer on the map, or browse a full list of available geographies based on country, state, city, or other subdivisions. Because you know the exact geography you want, you'll search for it by name.

9. In the Select geography pane, click Search. For Search for your geography, type Frisco, TX and press Enter.

   The search results are divided by categories: ZIP Codes and Cities and Towns (Places).

   

10. For Search results, expand Cities and Towns (Places) and check Frisco City, TX.

    

    The map navigates to Frisco, Texas, and a polygon representing the city boundary is added.

    

    Frisco is in Collin and Denton counties and is part of the Dallas-Fort Worth metropolitan area. It is one of the fastest-growing cities in the United States and has a population of about 200,000.

11. In the Select geography pane, click Finish.

    The Frisco polygon is saved to the project. A pop-up appears with options for analyzing and editing the polygon. (You'll use this pop-up later, so do not close it.)

    

    Note:

    The color of your map’s Frisco polygon may differ from the example images.

12. In the Select geography pane, click I'm done.

    Next, you’ll research areas of interest for the location of the juice bar.

Research locations for analysis

To determine the analysis area, you'll compare Frisco, where the successful juice bar is located, to neighboring cities in Collin County. Because you know the demographics most interested in juice bars, you will base your comparison on the millennial populations, median household incomes, and consumer spending on fruit and vegetable juice. You’ll use a comparison report to determine which areas to include in your void analysis.

1. On the map, in the Frisco City, TX pop-up, click Comparisons.

   

   The Comparison reports window appears and displays your most recent comparison report for the selected area.

   

   You'll create a report that compares areas based on the demographic information you choose.

2. Click Create new report.

   Note:

   If you have created a report in a previous project, you may receive a confirmation window asking whether you want to switch to another report. If so, click Yes.

   

   The Add variables window appears and shows categories of demographic variables.

   

   You can choose demographic variables based on several categories. If you have added variables for analysis in a previous project, those variables may be selected by default.

3. If necessary, for Selected variables, click Clear all.

   

   First, you'll add a variable for millennial population. Millennials are defined as people born between 1981 and 1998.

4. Click Population.

   

   This category contains population information for a variety of demographics. A list of popular variables is displayed, but these variables do not contain the one you want.

5. Under Keep browsing, click Generations.

   

6. Expand 2023 Population by Generation (Esri).

   

   A list of population variables by generation appears.

   

   Note:

   Demographic data is updated periodically. You may see more recent data than the data used in this tutorial and shown in the example images. Feel free to use more recent data if it exists.

   You can choose to add population data as a number or as a percentage of the total population. To account for differences in total population between cities, you'll choose the percentage.

7. For 2023 Millennial Population (Born 1981 to 1998) (Esri), click the percent button.

   

   Note:

   To ensure that the correct variable is added to the Selected variables list, be sure that you click the percent button before checking the variable.

8. In the list of variables, select 2023 Millennial Population (Born 1981 to 1998) (Esri).

   

   The Selected variables list updates with the selected variable.

   

   Next, you'll add a variable for median household income, which is a good indicator of income in an area. Low-income areas may not be able to spend as much at a juice bar compared to higher-income areas.

9. Click the Categories button.

   

   You are returned to the initial list of categories.

10. Click the Income category. In the Popular variables list, check 2023 Median Household Income (Esri).

    

    The Selected variables list updates.

    

    Next, you will add variables for consumer spending on fruit and vegetable juice.

11. Click the Categories button. Above the list of categories, in the search bar, type juice and press Enter.

    The search returns several groups that contain juice-related variables.

    

12. Check the box for 2023 Fresh Fruit Juice and 2023 Vegetable Juice. Choose Index for both variables.

    

    The Selected variables list contains four variables.

    

    These variables should provide a good indication as to whether an area has demand for a juice store.

13. Click Apply.

    The variables are added to the Comparison reports page.

    

    Next, you'll choose the geographies to compare using these variables.

Add other geographies to the report

You want to compare Frisco to its nearby cities so that you can find a city that may need a juice bar. You will add locations to the report and compare their demographics to Frisco's.

1. Click Add sites.

   

   The Add sites window appears.

2. Click Neighboring geographies and uncheck any boxes that are checked.

   

3. Expand Cities and Towns (Places). Check all the cities and towns except Frisco City, TX (there are six total).

   

4. Click Apply.

   The neighboring cities are added to the comparison report, with their values for each of the demographic variables listed.

   

   Rather than compare each city to Frisco one by one, you'll make Frisco the benchmark and automatically style the values for the other cities by their similarity to Frisco's values.

5. For Frisco City, TX, click the options button and choose Make benchmark.

   

   The other values are styled based on their similarity to Frisco's values.

   

   Darker colors indicate values that are higher than the benchmark, while lighter colors indicate values that are lower than the benchmark. No city matches the demographic profile of Frisco exactly. Most of the neighboring cities have higher millennial populations but lower median household income. The city of Plano stands out as having good potential compared to Frisco, along with relatively close values in the other variables.

   You'll choose Plano as your analysis area. Next, you'll add its city boundaries to the map.

6. On the ribbon, click Maps.

   

7. Click Define areas and choose Select geography. In the Select geography pane, click Search.
8. Search for Plano, Texas. In the search results, expand Cities and Towns (Places) and check Plano City, TX.

   

   A polygon representing the city boundaries of Plano is added to the map.

   

9. In the Select geography pane, click Finish and click I'm done.

   

You have mapped the location of the successful juice bar in Frisco, Texas. To find other areas nearby that have similar demographics to Frisco, you created a comparison report using neighboring geographies and discovered that Plano may be a good candidate for a new juice bar. Next, you will perform a void analysis to learn more about Plano’s opportunities.

Perform void analysis

You now have two areas on the map: Frisco and Plano. You know that Frisco’s juice bar is successful, and you want to know whether a juice bar would be similarly successful in Plano. When you compared the demographic information, you determined that Plano had a high retail sales potential for drinking places.

However, it's possible that Plano already contains several juice bars. Even if Plano is demographically favorable, if there is too much competition, a new store in the area may not be successful.

Run the analysis

You'll use void analysis to compare the amount of juice bar businesses in Frisco and Plano. If Plano has fewer juice bars than Frisco, there is probably demand for a new juice bar. If it has more juice bars, opening a juice bar may be inadvisable. You will use Frisco as the reference area, where the juice bar chain already has a successful location, and Plano as the analysis area, an area to which the chain may want to expand.

1. On the ribbon, click Run analysis and choose Void analysis.

   

   The Void analysis pane appears. If you've never used void analysis, the pane displays a brief outline of the void analysis workflow.

2. If necessary, in the Void analysis pane, click Get started.

   

   Next, you'll choose your analysis area and reference area.

3. Click Select analysis area. In the Select analysis area window, check Plano City, TX.

   

4. Click Apply.

   Note:

   If this is your first time using this workflow, the Setting the reference area window automatically appears, and you should choose Select area manually. If this is not your first time using this workflow, in the Void analysis pane, click Select reference area and choose the are manually.

   The workflow defaults to the reference area selection option you previously selected when running Void Analysis. If you previously chose to select the reference area manually, you will be taken directly to the Select reference area window.

5. If necessary, in the Choose how the reference area will automatically be set each time window, click Select area manually and click OK.
6. in the Void analysis pane, click Select reference area.
7. In the Select reference area window, check Frisco City, TX.

   

   You've now selected both Plano and Frisco to be used in the void analysis.

   

8. Click Apply.
9. In the Void analysis pane, click Next.

   Next, you'll choose the business data to analyze. For this scenario, you want to analyze juice bars and other drinking places.

   There are three options for choosing business data:

   • You can choose from Esri-provided business data categories.
   • You can search for businesses and services using the United States Census Bureau's North American Industry Classification System (NAICS) and Standard Industrial Classification codes (SIC).
   • You can import a custom business data layer with your own business data.

   For this analysis, you'll use Esri-provided business data categories.

   Note:

   To look up NAICS or SIC codes, you can do so at the NAICS Association.

10. Click Create custom list.

    

    The Create custom list window appears.

11. In the Create custom list window, click the Category drop-down menu to view categories of data available.

    

12. Expand Food & Restaurants and check the following variables:
    • Coffee Shops
    • Ice Cream Parlors
    • Juice Bars

    These options are similar drinking establishments that might compete with juice bars among millennial populations.

    

13. Click Done.

    The final parameter that you will verify is the field used to compare businesses in the analysis and reference areas. You can choose to compare by business name or by NAICS or SIC codes. If you compare by business name, you can still filter the results by NAICS code later.

14. For Field to determine void, confirm that Company/Business Name is selected.

    

15. Click Save list. In the Save list window, for List name, type Juice Bars and Coffee Shops.
16. Click the List icon drop-down menu.

    

17. Click the All icons menu and choose Food.

    

18. Click the drink icon.

    

19. Click Save and run analysis.

    Note:

    Business data updates periodically. Your results may not match the example images exactly.

    When the analysis is complete, juice bars, coffee shops, and ice cream parlors in Frisco and Plano are added to the map as point locations.

    

    In areas where dense clusters of points are located, the points are replaced by numbers that indicate how many shops are in the area.

    The Void analysis pane also shows the results summary.

    

    Next, you will explore the results of the analysis.

Interpret the results

According to the summary, Plano (the analysis area) has 74 businesses matching the chosen criteria, while Frisco (the reference area) has 68. Plano has a surplus of 8 businesses compared to Frisco. (Your numbers may vary and that is ok.)

This comparison is based on the combination of all three business types you chose. You can filter the results by individual business type. You'll check to see whether Plano has a surplus specifically in juice bars.

1. On the Void analysis pane, click the Filter button.

   

   The Filter results window appears.

2. For Filter by category, choose Juice Bars and click OK.

   On the map and in the Void analysis pane, the data is filtered to juice bars.

   

   According to the results, there are 13 juice bars in Plano and 15 in Frisco, meaning there is a gap of 2 juice bar in Plano. These results indicate that the Plano area might be able to support the opening of another juice bar, which is promising for your chain.

3. Filter the results by Coffee Shops, then by Ice Cream Parlors.

   Plano has a few more coffee shops and ice cream parlors than Frisco. Coffee shops are the primary driver of the total surplus. Coffee shops may provide competition for juice bars, so a large surplus of them could potentially diminish the success of a new juice bar in Plano.

4. Remove any filters and click Full results.

   

   The Void analysis pane expands, showing a table with the names of all the businesses in Frisco and Plano.

   

   Rows highlighted in red represent voids, meaning the business appears in the reference area (Frisco), but not the analysis area (Plano). Rows highlighted in blue represent businesses that appear in both cities. Currently, there are no blue rows, as there are no juice bars with locations in both cities.

   Looking at the results by business name may be useful if there are brands or franchises that are of interest to your analysis. However, for the purpose of this analysis, you are more interested in juice bars as a category of business.

5. Click the Settings button.

   

6. In the Results table settings window, check Show categories only.

   

   The results are grouped into the three categories you selected: Juice Bars, Ice Cream Parlors, and Coffee Shops.

   

7. Click the Advanced view toggle button.

   

   The advanced view provides more details about the analysis results and has automatically normalized the results based on population.

   

   Normalization is when two values are adjusted to account for differences in scale. For instance, your void analysis indicates that Frisco and Plano have about the same number of juice bars, so there does not seem to be a void. However, these counts do not consider the population of each city. A city with more people will have more demand for businesses than a city with fewer people.

   The advanced view of the table shows the populations of the analysis area and the reference area, as well as the difference in population between them. Although Plano has a similar number of juice bars as Frisco, it also has a higher population.

   

   The normalization results also list the expected number of juice bars in Plano based on its population compared to Frisco. When accounting for population, 19 juice bars are expected, 6 more than the actual total of 12.

   

8. Point to the Expected in analysis area value.

   Note:

   You must click the actual number, not the Expected in analysis area text. This value indicates the expected number of businesses in the analysis area for all the categories you selected.

   

   A pop-up window appears showing the formula for how the expected number of juice bars was calculated.

   

   The formula divided Plano’s total population by the density of juice bars in the reference area of Frisco. In short, normalization calculated the number of juice bars per person in Frisco, then multiplied that value by the number of people in Plano.

   You can also normalize results by other variables. You can pick a variable from the Normalize results by drop-down menu or click Browse for a variable to choose a variable through the data browser.

9. In the Normalize results by drop-down menu, choose 2023 Total Households (Esri).

   

   When normalizing results by 2023 Total Households (Esri), Plano is expected to have 21 juice bars, 8 more than it has.

   

   Note:

   To export your results, click Export in the Full results table. You can export the results as a table to either Excel or PDF. Including individual business locations in the analysis report uses credits.

10. Click Minimize table.

    

    The table is minimized, showing the Void analysis pane and the map again.

11. In the Void analysis pane, click Finish. To close the workflow, click I’m Done.

    You have now completed your void analysis. Although there is a balanced number of juice bar business in both areas, normalizing the results reveals that the expected number of businesses in the analysis area of Plano is greater than what the initial analysis showed. These results indicate that Plano is underserved by juice bars compared to Frisco. Your conclusions match those made by a real-life juice bar company in the area, which expanded to Plano in summer 2021.

In this tutorial, you used a comparison report to identify an area near Frisco to analyze. You then defined the reference area and the analysis area to compare. You performed a void analysis to determine whether there were any gaps in juice bar businesses in the analysis area. After normalization, you learned that Plano, the analysis area, had fewer juice bars than expected, given its population. Ultimately, you provided critical analysis that could be instrumental in the opening of a new location.

Although the workflow you followed in this tutorial applies to juice bars in Frisco and Plano, it works with any other business data and any United States location. If you have your own business data, you can also perform this analysis for locations outside of the United States.

You can find more tutorials in the tutorial gallery.

Acknowledgements

• Demographic data accessed with ArcGIS Business Analyst. Terms of use.
• Gallery image from Wikimedia Commons.