CONCENTRIC RINGS DON'T CUT IT.
Of critical importance to any community market research project is accurately defining the trade area, the geographic area from which the majority of consumers are to be drawn. Estimating trade areas requires skilled judgment and experience. Simply using concentric rings or drivetimes is not an accurate method of determining trade area.
There are many factors that affect the trade area. Retail Attractions uses real world experience and research to analyze the factors affecting trade area and define an accurate primary trade area. The most accurate estimated trade areas take into account factors such as population densities, competitive locations, natural barriers, traffic flow, accessibility and convenience. Other less accurate methods are radii, drive-time, or county based trade area definitions.
The effect of competition is best defined by Reilly’s Law of Retail Gravitation which is based on the premise that people want to shop in larger towns, but their desire declines in direct relation to the distance and time they must travel to reach those places. At Retail Attractions, our preliminary trade area is defined using Reilly’s Law. We assess the population and offerings of the surrounding communities to get a starting point for the trade area.
From there, the area is adjusted to account for natural barriers, traffic flow and accessibility. Convenient retail is successful retail. Once we have analyzed all of these factors, we adjust our preliminary trade area to account for our findings. The result is a custom polygon that represents a true consumer base. This methodology has been perfected through years of experience and diligent research and provides a result far superior to concentric rings or drive times. The results of our method are justifiable and proven to be effective marketing information.
Please keep in mind the trade area will vary for different types of retail; convenience locations will have a smaller trade area than destination locations. For example, the trade area for a grocery store will be tighter than the primary trade area, and the trade area for electronics or other specialty items will be wider than the primary area. If a specific retailer has shown interest in a location and the trade area is different due to the type of retail, custom demographics reports can be prepared to provide the pertinent information.
WHAT RETAILERS ARE LOOKING FOR.
Once the trade area is defined, we collect demographics for the trade area and the city limits. This information in conjunction with data provided from the city is compiled in an easy to read format giving an accurate representation of the growth, education level, income level and overall demographic make up of the consumers. This report allows us to identify strengths and weaknesses in a market and move forward in the right direction.
Retailers are looking for specific requirements when trying to choose a site for their next project. Having your community's information compiled by a third party and presented in a professional format will let the retailers know you are a proactive city that wants to make their job as easy as possible. The easier you make it for site selectors, the more likely the are to consider your community.
KNOW WHAT YOU NEED.
Our Opportunity Gap provides an actionable portrait of sales opportunity for optimal site and market analysis, allowing you to maximize your growth strategies by accurately targeting the sales gaps that exist in the marketplace. By using sales potential to depict supply and geography-based estimates of potential annual consumer expenditures to depict demand within a specific market, an opportunity gap analysis of the retail environment is defined. This information is derived from a number of sources including the Census of Retail Trade (CRT) Annual Survey of Retail Trade, Claritas Business-Facts, Census of Employment & Wages,State Sales Tax reports, Trade Associations, Demand Side Estimates, Consumer Expenditure Survey (CEX) Global Insights and Claritas Current Year demographics.
The Opportunity Gap allows you to compare supply and demand to determine potential sources of revenue growth at any standard or user defined geographic level. Such comparison can be achieved at the retail outlet level or the merchandise line level. An opportunity gap appears when household expenditure levels for a specific geography are higher than the corresponding retail sales estimates. This difference signifies that resident households are meeting the available supply and supplementing their additional demand potential by going outside of their own geography. The opposite is true in the event of an opportunity surplus which occurs when the levels of household expenditures are lower than the retail sales estimates. In this case, local retailers are attracting residents from other areas to their stores.
Contact us at (918) 376-6707 to begin your demographic profile.