Sometimes, finding meaningful business insights doesn’t require fancy or expensive software. If you think about it, finding vast amounts of knowledge is just one Google search away, and has been since its founding back when the internet was just starting to become mainstream. But did you know that data related to Google searches have been collected over time and that you can access said data for free? This simple yet powerful tool is known as Google Trends.
In a nutshell, Google Trends analyzes the popularity of top search keywords in Google’s search engine across a multitude of regions, languages, and time periods using graphs and tables. With this data, you can find and analyze trends on key topics related to your areas of interest. From a business perspective, your strategy can be greatly enhanced.
So, for this week’s exercise, I will demonstrate just how powerful Google Trends can be using a scenario for a startup drive-thru coffee business.
The Scenario
Hypothetically, I am the social media manager of a coffee manufacturing company, and my company wants to dive into the end-user market by opening ten drive-thru coffee shops somewhere in the United States in the next year, and then doubling or tripling that figure by the following year. This is a bold investment that is entirely dependent on the success of the first ten shops; therefore, management wants to limit this first group to a specific state in the US (let’s say Minnesota), along with at least two neighboring states that are near the company’s location. As the social media manager, I will be using Google Trends and a handful of search terms to extract meaningful data and make educated decisions for the future of this business.
The Findings
First of all, I wanted to get a general sense of how “trendy” coffee as a drink is in each state and see where Minnesota—the state of the company’s founding—falls. I made sure that the search term ‘coffee’ was under the category Drink to make the search was more refined. By entering ‘coffee’ in the comparison widget and setting the region to United States and the time period to the past 5 years, I was able to retrieve a ranking chart by state. It just so happens that Minnesota ranks #4 in the entire country for interest in coffee (even above Washington, which I found surprising). Perhaps this is because it’s so cold up there and the twin cities make up a large metropolitan area full of young people who are interested in coffee, coffee shops, and the coffee industry.
Next, it was time to compare ‘coffee’ to other, more specific, search terms. While coffee as a drink can provide a general idea of interest in the product, it’s still a bit vague when it comes to demand for drive-thru coffee shops. That is, this term could cover anything, from coffee products for the home to coffee at big chains such as Starbucks and Dunkin’. Therefore, I decided to include three more search terms: ‘coffee near me,’ ‘coffee shops,’ and ‘coffee shops near me.’ This way, we can get a sense of interest in coffee on-demand at places other than the already-established chains and avoid entering a potentially oversaturated market.
I chose to set the time period to the past 5 years because a shorter time may not provide enough data, whereas a longer time may result in data anomalies, which were more common back in the day when Google’s tracking systems were less stable. I also made sure that the category was Food & Drink and the search was limited to the web.
The resulting graph above represents Google Trend’s ‘interest over time’ (IOT), a metric which depicts search popularity relative to the highest point in the chart for the specific region (Minnesota) and time period (past 5 years), with a value of 100 meaning peak popularity. As shown, the more general search term ‘coffee’ clearly trounces the other terms in IOT.
Looking at the graph, it seems that overall interest in these search terms in Minnesota has been relatively stable with a slight increase. However, there are some more specific and interesting trends to point out. In April of 2020, when lockdowns due to COVID-19 began, interest in ‘coffee’ went up while the other terms plummeted. This may be due to people expressing interest in at-home coffee products while most shops were closed. Also, there seems to be spikes in interest for ‘coffee’ during December, probably due to people searching for Christmas coffee recipes.
By looking at the related topics, I was able to find another probable explanation for the April 2020 spike. I discovered that ‘Dalgona coffee’ received a huge search spike during that time, which is probably due to this product going viral.
To get an even closer view at the latter three search terms, I removed ‘coffee’ and above is the resulting graph. Here, I noticed that there are more erratic changes in interest when it comes to coffee shops; however, it seems that the average interest is growing.
At this point, I wanted to perform a more specific regional breakdown so that I can report where in Minnesota it would be most ideal to have most of our startup locations at. Luckily, in the Minnesota report, I also get data from other metro areas in neighboring states, which will help me determine which neighboring states are the best for expansion. The following charts show the regional breakdown for each of the four search terms.
Based on the above graphs, it seems like the Minneapolis-St Paul area is neck-and-neck with the Duluth-Superior area up north for ‘coffee’ and ‘coffee near me.’ However, what I found interesting was that for the latter two terms that involve coffee shops, the Duluth-Superior area actually outperforms the twin cities. While the twin cities are definitely more densely populated, perhaps Duluth is a little more in demand of new coffee experiences due to it being more sparsely populated. Therefore, both regions should be heavily considered first for the startup locations.
Conclusion
Based on my above findings, I would conclude that Wisconsin and then North Dakota would be our most ideal neighboring states for starting up the company’s drive-thru coffee business. More specifically, these regions are the most ideal for the first ten locations:
- Minneapolis-St Paul region (5 locations): The twin cities easily make up the most populated metro area; therefore, at least half of our locations should be in this area. Perhaps three can be in Minneapolis and/or its suburbs, and two can be in St Paul and one of its suburbs.
- Duluth-Superior region (1 location): Although the interest seems to be the highest here, this metro area is much less populated than that of the twin cities, and is quite of out the way of other cities. Therefore, starting with one in Duluth is the safest, and then maybe add a location in Superior in the next expansion.
- La Crosse-Eau Claire region (2 locations): One in La Crosse and one in Eau Claire. The distance between these cities in Wisconsin is quite large, so there should be little worry about market over-saturation.
- Rochester, MN (1 location): Although interest within the Rochester region was lower, the city has a decent-size population and sits between the twin cities and La Crosse, making this a less risky investment.
- Fargo-Valley City region (1 location): Fargo would be the safest bet here because it’s the most populated and it’s close to neighboring Moorhead in Minnesota.
By simply using this free tool from Google plus a handful of keywords, I was able to extract a lot of data and even formulate business expansion decisions based on my findings. Analyzing search trends this way is very useful to see what people are searching for and when/where the interest in, or demand for, something is taking place. It seems that to “google” something does not only apply to seeking random facts and knowledge anymore; we are also able to use this technology from our fingertips to develop actual effective business strategy.
