Do you have an accurate assessment of residents and visitors shopping and dining in your community? That’s a key factor in recruiting new retail and restaurant options to expand your sales tax base.
In order to recruit retailers to your community, you must know your Retail Trade Area. The Retail Trade Area is the geographic region from which 80-85% of your customers travel from to spend money in your community. A secondary Retail Trade area encompasses the geographic region in which the rest of your shoppers reside.
The population of your Retail Trade Areas will typically be far greater than your community population quantified by the U.S. Census Bureau and other research entities. That’s why it is so important to have the most accurate and current Retail Trade Area determination so that you can present your true retail potential to retailers.
Using the newest technology to capture cell phone data, communities are now able to determine shopper traffic throughout their City and at specific shopping and dining destinations. This is the most precise approach to determining consumer shopping patterns and retail trade area boundaries and it is the most successful way to capture and present your full retail potential to site selectors.
Drive times and radials are two popular, yet outdated, methods for determining Retail Trade Areas. Although not ideal for determining trade areas, they can still support your recruitment efforts to some degree.
Drive times are determined by the amount of time it takes to drive to a community or retail location. For example, anyone within a 20-minute drive time can reach the destination in 20 minutes or less. Radials are formed by drawing rings at varying intervals around a community or retail destination. However, neither radials nor drive times take into consideration the location of competing communities, an important factor retailers consider when they’re looking to relocate.
Like most industries, technology advances like compiling cell phone data continue to improve your community’s ability to document the most accurate retail environment and improve opportunities for successfully recruiting new businesses to service your residents and visitors.
About The Retail Coach
For more than 16 years, The Retail Coach has been the go-to firm for municipalities, economic development organizations, real estate developers, and retailers seeking practiced advice on retail strategy, property development, property redevelopment, and urban revitalization.
As the first transaction-oriented retail real estate advisory firm in the nation—with experience in more than 400 communities and repeat assignments with over 88 percent of them—we provide tailored, end-to-end retail economic development strategies for clients.