Trade Area Analysis
Businesses from sole proprietorships to chains with multiple locations need to understand where their customers are coming from. Cardinal Geographics, through the use of customer mapping techniques, can show businesses or organizations ways to calculate the trade area for their business.
In business or economic development, a trade area is the geographic area from which a community generates the majority of its customers. Often, this is the geographic area that represents 75-percent of current customers. Sometimes a community may have more than one trade area (such as a convenience and a destination trade area). Knowing the size and shape of each trade area is extremely important because its boundaries allow for measurement of the number of potential customers, their demographics, and their spending potential. This information provides valuable insight into your community’s customer base and allows you to calculate demand for stores, products, and services.
In the example shown here, detailed demographics are available for each of the drive-time rings. Some of the demographic data available in these reports include household size, number of children, median age, household income, race/ethnicity, the number high school or college graduates, average rent, and even household buying power.
Following are descriptions of three different GIS techniques using basic geographic data: