Trade Area Basics – Part 1,The Radius

Trade Area Basics – Part 1,The Radius

Trade areas are not a new thing by any means but they are often misunderstood. Sure they are a way to show where people tend to be based on location and distribution of target locations. Most people start with a simple Radius.

The Radius

While this is useful in a simple yet standard setup, it could miss very important items like physical and mental boundaries. Kind of like this sample.

Radius Map
Simple Radius Example

 

While we are showing a 3 Mile radius, we are ignoring in this example that the area show only has population in half of the area due to the mountains on the east. More commonly known as a 180 Degree trade area.  It’s also ignoring mental barriers like people on the other side of I-215 and their unwillingness to travel further south away from their typical traffic pattern.

For better or worse this is typically the starting point for all trade area analysis. We use this approach all the time to illustrate simple distances between targets. We also use it in to build the basics of a trade area you will learn about in Part 3

Overall it’s a good starting point for simple comparisons but it’s lacking. We will look at Part 2 in this example set next, the Drive Time approach.

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