Trade Area Analysis
Trade areas are descriptive of your business today and provide a consistent, objective basis by which to compare units to each other. No single data source, or methodology is sufficient or “best.” The best trade areas for existing units will come through a combination of data, sources, and strategic consideration unique to each of your businesses.
The Forum Analytics Trade Area Algorithm
Our trade area algorithm utilizes consumer data to define primary consumer-driven, residential-based capture areas for all units. It considers bias uniquely for each industry by supplementing consumer-based data analysis with peer spacing analysis to obtain population averages that include both workplace and residential capture. This approach ensures a reliable, objective, industry reconciliation and removes the residential bias associated with most customer household data capture, especially in hyper-urban markets, to create primary commercial draw areas for all existing units.
Depending on available data, Forum’s methodology will use a combination of ring, drive times, and/or customer convex hull polygons, and our team will develop either a linear regression model to estimate trade areas or a drive time/density based suggestion engine.
Drive time and radius trade areas built from this algorithm are to be used as an initial guide in developing and defining trade areas for proposed new locations. Our SIMMS solution allows you to hand draw polygons created with field knowledge to make more accurate representations of trade area draw.
Trade Area Methodologies