What are trade areas?
A trade area refers to the geographical area from which any business or organization draws its visitors (also known as a market area or catchment area). It represents the area where the majority of visitors live or work. Trade area analysis is key to assessing market demand, identifying local competition, and understanding the potential customer base.
The size and shape of a trade area can vary depending on the nature of the business and the products or services offered. For example, a local grocery store may have a trade area encompassing a few neighborhoods or a small town, while a downtown district of a large city may have a trade area covering an entire city or even multiple cities.
How does Placer define the boundaries of a trade area?
The size and boundaries of a trade area can be determined using various methods; each method is relevant to different businesses or cases. Placer supports several trade area types, allowing customers to adjust their analyses per their business needs:
Different types of trade areas compared - distance in miles, drive time, True Trade Area.
- Distance in miles- Presents the trade area based on distance in miles from the location.
- Drive time - Displays the trade area based on how long it takes for visitors to drive to the location.
- Walk time - displays the trade area based on how long it takes for visitors to walk to the location.
- True Trade Area - Placer.ai’s True Trade Area displays the dispersement of visitors’ home or work locations based on the actual volume of visitation, and provides a highly accurate visual representation of where visitors are coming from.
Learn more about trade area types and methodologies.
Can I analyze the demographic attributes of the population that lives/ works in the trade area?
Yes. Audience attributes are calculated by aggregating the Census Block Groups within the trade area, and statistically extracting the attributes of the population within those Block Groups. Customers can use the Demographics report to dive deep into the demographic and psychographic attributes of the population in the trade area.
In addition, Placer allows to choose between analyzing attributes of the entire population within the trade area (Potential Market), or using a different approach that assigns greater weight to the areas that generated more visits to the location (Captured Market).
Learn more about the methodology behind Captured and Potential Market analysis.
Start analyzing trade areas right away with this introduction guide
