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Postcodes were originally designed to enable the efficient sorting of mail within our postal system. Over time, postcodes have started to become much more than a 4-digit number at the back of our address - it has started to become part of our identity.
It is human nature for us to prefer living near people who are similar to ourselves, whether that be by age, lifestage or occupation. Over time, as people cluster together, we start to see postcodes coming to life with their own personalities which are then associated with certain stereotypes. However, do we see similar "stereotypes" or clusters being formed in different locations? We used the 2016 Census data to identify similarities across Australia's 3,600 postcodes.
Postcode Profiling: Neutral Bay (2089)
You may already have some preconceived opinions on people who live in Neutral Bay (affluent, white collar professionals), however, let’s take an objective look and see what the data says.
Based on the 2016 Census, we used metrics such as age, level of education, income, family composition, language spoken and occupation to profile each postcode. For instance, the key metrics for Neutral Bay are shown below:
Median age: 37
Median weekly income: $2,349 (high)
Language spoken at home: English, Mandarin, Cantonese
Highest year of school: Year 12 or equivalent
Occupations: Professionals, Managers, Clerical and Administrative Workers
Property type: Apartment 3 storey
We profiled Neutral Bay as an affluent postcode (compared to all of Australia) consisting of mostly low rise apartment buildings. The residents of this postcode are generally young professionals with no children or small families.
Now, can we find other postcodes with similar attributes to Neutral Bay? We developed an algorithm using this data to find other postcodes that matches this profile. The below shows the top 5 postcodes which were most like Neutral Bay.
Neutral Bay (NSW) look-alikes
Looking at the above, we can see that the most similar postcode is Cremone and Cammeray which is directly adjacent to Neutral Bay - so it’s not too surprising that the people living in these areas would share similar profiles. Interestingly, New Farm and Elwood are in entirely different States and have been picked up because of their demographics in terms of age and language spoken. They also have high income, similar occupations and tenure type.
Do where you live influence the food you eat?
Now that we can find similar postcodes, what other interesting facts can we derive? How about cuisine types? During the COVID-19 lockdown, food delivery giants such as Deliveroo and UberEats have become almost a staple for the average Australian household. But, have you ever noticed that your choices of restaurants seem to be skewed towards certain cuisines?
We extracted the number of restaurants available in Deliveroo under each cuisine for two different postcode profiles; one based on Neutral Bay (NSW) and the other based on Burwood (NSW).
Neutral Bay (NSW) look-alikes
As highlighted above, Neutral Bay look-alikes are highly affluent with majority young professionals. These are the top 5 cuisines available to them based on the number of restaurants within each cuisine:
Burwood (NSW) look-alikes
Burwood look-alikes are medium affluence with high rise apartment blocks. The main languages spoken at home include Mandarin, English and Cantonese. These are the top 5 cuisines available to them:
Notice any difference?
Let us make it clearer. The below table shows the index score of each postcode against the average. In other words, if the index is higher than 1, the cuisine is more skewed towards that postcode, and vice versa for if it's less than 1.
What immediately draws our attention is inverse in green and red patterns across the two postcode profiles. Neutral Bay look-alikes tend to have higher food delivery options in Italian food, along with Dessert, Curry, Pizza and Pasta. On the flip side, Burwood look-alikes are more skewed towards Chinese, Fried Chicken, Vietnamese, Korean and Bubble Tea.
Can we take a moment to talk about Bubble Tea? We have spoken about Bubble Tea in length in a previous blog, and it is clear again here that Bubble Tea is heavily skewed towards postcodes which have high Chinese, Thai, and Indonesian populations.
So what does this mean? Does where you live influence the type of food you eat, or is the type of food you eat influenced by where you live? What we have shown above is that there is a clear relationship between the type of people who live in an area, and the type of restaurants which are opened around there. This further enriches the profile or stereotype of the postcode.
Some postcode stereotypes have been well known for a long time, however some have only just started to take form. Gentrification has been happening over a number of decades and have transformed postcodes such as Newtown in NSW, Fitzroy in Melbourne, and West End in Brisbane. If we conducted this analysis in 2012 using the 2011 Census data, our findings might have shown different postcodes grouped together. You can expect the stereotypes of postcodes to change as our population also changes. However, it is important to note that businesses and governments also play a large part in how each postcode is perceived and how fast it changes.
Large corporations have long used postcodes as a quick way to segment their customers, including:
Marketing agencies - the easiest way to narrow advertisement campaigns is by postcodes, for example, if the product is targeted to young professionals or certain ethnicities
Car insurance - where you live could affect your insurance premium with risk factors such as theft or crime rates in your area
Telecommunications - companies may roll out new technology to postcodes where there is more likely to be “early adopters” of their products
Not only large corporations, but businesses such as restaurants and cafes will anchor towards certain postcodes to further enhance its identity, as we have shown above
People prefer living in areas where they feel they can connect and find other people similar to them. It is also natural to look for new suitable areas as they progress through their life stage - for example, young professionals moving to a family friendly suburb in anticipation of starting their own family.
We have built an online tool using the census data where you can enter your own postcode. Check it out at Postcode Like Yours! It’s a pretty handy tool if you need to move and want to find a similar location to where you’re already living. We have worked with a multitude of clients to help them better understand their customers using data and drive further growth to their business.
EdgeRed is an Australian boutique consultancy specialising in data and analytics. We draw value and insights through data science and artificial intelligence to help companies make faster and smarter decisions.
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