Market Analysis Summary
There are no exact competitors, and few related competitors in the greater Raleigh area. There are no related competitors in the downtown Raleigh area. The space at 510 Glenwood was recommended to us by the managing realtors because they had targeted that space for a spa type tenant. By nature of the service SoulSpace will provide, success will be readily achieved.
4.1 Market Segmentation
Our target market will be divided by salon customers and spa customers. Salon customers will be from every age and gender; however, since the salon and spa will be in direct association with each other, we expect that the spa market segment will greatly affect the salon market segment. Thusly, our target market segment will be male and female professionals and retirees, from the age of 25, with individual and household incomes greater than $25,000.
|Year 1||Year 2||Year 3||Year 4||Year 5|
|+$25K 5 mi. Radius Raleigh||2%||50,500||51,510||52,540||53,591||54,663||2.00%|
|+$25K 5 mi. Radius West Raleigh||2%||53,000||54,060||55,141||56,244||57,369||2.00%|
4.2 Target Market Segment Strategy
The members of these market segments have luxury money on hand, and lead professional lives filled with stress at a consistent level. All persons usually need hair styling regardless of income level, and make the effort to find the money available to style their “look.”
4.2.1 Market Needs
People love to pamper themselves, especially people who have achieved a modicum level of professional success. Raleigh has become a bastion for the successful, having consistently been named as one of the best cities in America to live and to do business in since the mid 1990’s. This has created a community of wealth, mobility, and growth. Raleigh has successfully implemented a refurbishing plan of “old” downtown, which now makes Glenwood South, the Warehouse District, and Hillsborough Street one of the most popular destinations in the whole city.
4.2.2 Market Trends
With the refurbishment of Raleigh’s Warehouse District, including Glenwood South, and it’s continual development of downtown Raleigh, this area will only become more popular.
4.2.3 Market Growth
When Forbes, Inc., and Money, Inc. listed Raleigh as the best place to live and do business, and subsequently listed Raleigh in the top five and top ten in the following years, a population boom ensued in the late 1990’s.The North Carolina census released in October 2000 reports that an average of 6,000 persons per day were relocating to the greater Raleigh area. According to this census, the Triangle has one of the highest concentrations of Ph.D.’s per square mile in the world. The average income per household is $40,000-$60,000 and climbing.
According to the Raleigh News & Observer reports of Raleigh City Counsel meetings concerning growth, the continuing refurbishment of downtown Raleigh is a top priority, along with a complete overhaul of the mass transit system. New buses and taxis are funded and are to be implemented during the next two years. A Commuter Rail System run by the Triangle Transit Authority is supposed to be finalized May 1, 2001, and completed by 2007-2008, with rail stations throughout downtown, running up Hillsborough Street going to RDU Airport then connecting to Chapel Hill and Durham; later phases include branch rails to North Raleigh. The refurbishment plan continues, and downtown is now populated with more destinations than ever, with the plan growing even more businesses. The future looks very promising for a thriving downtown with a continual presence of customers.
4.3 Service Business Analysis
We are part of the retail health and beauty industry which has four major types:
- Salons: Stores with only hair styling services and products.
- Day Spas: Stores specializing in body health maintenance through a variety of services and products.
- Day Spa & Salon: Stores combining the services of the two aforementioned.
- Health & Beauty Products: Stores selling only merchandise products covering the wide range of products available but not inclusive of those sold by salons and spas.
4.3.1 Main Competitors
The main competitors are Salon 21 with a location in downtown Raleigh, Von Kekel with locations in East Cary and North Raleigh, Soigne’ with a location in mid North Raleigh, Emerald City with a location in Northwest Raleigh, Image with a location in far North Raleigh, Millennium 2000 with a location in North Raleigh, Devine with a location in mid North Raleigh, and Warren Scott with a location in far North Raleigh. Also, by nature of their popularity we must also include these spas as main competition: Skin Sense with locations in downtown Cary and far North Raleigh, and Iatria in far North Raleigh.
Strengths of the above are services offered: location proximity to major housing developments, and name recognition. The weaknesses of these competitors are general lack of promotion, concentration mainly in North Raleigh.
With our target location being downtown Raleigh, we will be servicing East, South, West, and Old Raleigh, as well as downtown commuters. There are no salon-spas in West Raleigh, the closest being Von Kekel in East Cary, and the spa only Skin Sense also in Cary. The only downtown competitor, Salon 21, is very small, not very well known, and concentrates most of their business on the salon end.
Our market advantage is wide open, and will give us the opportunity to service a large population base that is not currently being well served. When you include our service of energy works, we become the sole provider of all three services of hair works, body works, and energy works not only in downtown Raleigh, but for the entire greater Raleigh area.
4.3.2 Business Participants
Industry participants are those whose services include salon and spa offerings. Salon services concern hair styling, while spa services concern body relaxing and rejuvenating offerings such as massage, and nail and face works.
4.3.3 Competition and Buying Patterns
Customers choose spa and salon services based on proximity to their daily travels from home and work, reputation for quality, and good pricing. With our combined services, we expect to compete mainly against other combination spa-salons.