Month: May 2022

A trade area is a defined geographic area which generates the majority of its customers. Figuring out the size and scope of a trade area is a vital piece of the puzzle, because these boundaries help determine how we can measure the number of possible customers, their demographics, and their spending power. Knowing a community’s customer base allows commercial agents and RPR users to approximate how much demand there is (or will be) for stores and services.

This basically means: how many people (shoppers) are in a given area and how much do they spend on products and services? Knowing this data goes a long way in determining whether your clients’ business is a good fit for success and growth.

Contributing Trade Area Factors

Many factors go into determining trade areas, especially when you’re trying to map out convenience versus destination shopping habits. Some things to consider:

• Population size: The bigger the community, the bigger the trade area.
• Nearby competitors: The cutoff point where customers are drawn to a competing area.
• Destinations: Big box stores or discount department stores usually attract customers from a long distance.
• Business mix: A cluster of popular businesses tends to pull customers from a distance.
• Large employers: A business with lots of daytime employees means lots of lunch, snack and beverage dollars being spent.
• Traffic: High traffic areas, either by foot or by vehicles, typically have an impact on visitors and sales.