Trade Area Analysis
A trade area is the geographic region from which a retail location draws its customers. Defining the right trade area is foundational to site analysis—it determines which demographics, competitors, and market conditions are relevant to your evaluation.
GrowthFactor provides three methods for defining trade areas, each suited to different analysis needs. All site intelligence in the results panel (demographics, competitors, sales projections, cannibalization) automatically updates based on your selected trade area.
Accessing Trade Area Settings
Click the trade area selector in the top bar (e.g., "16 min drive time") to open the configuration panel. The panel has three tabs:
Presets – Standardized trade areas configured for your organization
Walk/Drive Times – Custom isochrones based on travel time
Trade Zones – Boundaries derived from actual foot traffic data
After making changes, click Apply Changes to update your analysis.
Presets
Presets are pre-configured trade areas set up by your organization, typically based on your standard evaluation criteria. These might include fixed radiuses (e.g., 1-mile, 3-mile, 5-mile) or drive times that match your typical customer behavior.
When to use Presets:
Rapid screening of multiple sites using consistent criteria
Standardized reporting for committee presentations
When your organization has established trade area standards
Presets appear as quick-select buttons, allowing you to switch between common configurations with a single click.
Walk/Drive Times
Walk/Drive Times calculate trade areas based on how long it takes to reach a location, accounting for actual road networks, speed limits, and geographic barriers. These isochrones provide a more realistic view of accessibility than simple radius circles.
Configuration Options
Drive Time: Calculate based on driving (1–60 minutes)
Walk Time: Calculate based on walking (1–60 minutes)
Radius: Fixed distance in miles (if preferred over time-based)
Use the slider or enter a specific value, then click Apply Changes.
Understanding Isochrones
Unlike circular radiuses, drive-time boundaries follow the road network. A 15-minute drive time from a suburban site with highway access will cover more ground than the same drive time from a dense urban location with traffic congestion. This reflects the reality of how customers actually travel to your stores.
When to use Walk/Drive Times:
Evaluating accessibility from surrounding neighborhoods
Comparing sites with different road network characteristics
Analyzing urban locations where walking traffic is significant
Customizing analysis beyond your organization's standard presets
Foot Traffic Trade Zones
Foot Traffic Trade Zones use real visitor data to show where a location's customers actually come from. Rather than assuming customers travel a certain distance or time, this method reveals actual behavior patterns based on observed foot traffic.
How It Works
GrowthFactor analyzes anonymized mobile location data to identify the home and work locations of visitors to an area. This data is aggregated into geographic zones, showing which neighborhoods and areas contribute the most visitors.
Configuration Options
Percentage Slider (50–100%): Controls how much of the visitor base to include in your trade zone.
50%: Shows the core area where your most frequent visitors originate—a tighter, high-concentration zone
80%: Shows a broader area capturing most of your customer base
100%: Includes the full geographic spread of all visitors
Adjusting this slider lets you focus on your core customer base or expand to understand the full reach of a location.
Visitor Origin Type:
Live: Shows where visitors reside (home locations)
Work: Shows where visitors are employed (work locations)
Toggling between these views reveals different customer behavior patterns. A downtown lunch spot may draw heavily from nearby offices (work), while an evening restaurant may pull from residential neighborhoods (live).
Interpreting Trade Zone Visualizations
Foot Traffic Trade Zones display as shaded regions on the map, often with color gradients indicating visitor density. Unlike the clean boundaries of drive-time isochrones, these zones may be irregular—reflecting real-world patterns like highway corridors, neighborhood boundaries, or geographic barriers.
When to use Foot Traffic Trade Zones:
Validating assumptions about where customers actually come from
Understanding customer travel patterns for an unfamiliar market
Analyzing sites where drive-time assumptions may not hold (urban cores, destination retail)
Building the most accurate demographic and competitive analysis
Important Considerations
When using Foot Traffic Trade Zones, demographic data reflects only the population within the displayed zone. This may result in lower absolute numbers compared to a circular radius, but the data is more precise—it represents the people who actually visit locations in that area, not just those who live nearby.
Trade Area Impact on Analysis
Your selected trade area directly affects every aspect of your site analysis:
Demographics
Population statistics are calculated for residents within the boundary
Competitors & Complements
Only businesses within the trade area are displayed and counted
Sales Projections
Analog models factor in trade area characteristics when comparing to existing stores
Cannibalization
Overlap calculations are based on trade area boundaries of existing stores
Changing your trade area mid-analysis is encouraged—comparing how metrics shift between a 10-minute and 20-minute drive time can reveal important insights about a site's potential.
Best Practices
Start with your standard: Use your organization's preset to establish a baseline, then adjust if the site warrants deeper investigation.
Match method to context: Use drive times for suburban and highway-adjacent sites; consider walk times for urban retail; use foot traffic zones when you need ground-truth validation.
Compare multiple configurations: A site that looks marginal at 10 minutes may be compelling at 15 minutes if it captures a key residential pocket. Test different boundaries to understand the full picture.
Document your assumptions: When sharing analysis or presenting to committee, note which trade area configuration you used. Consistent methodology makes site comparisons meaningful.
For detailed information on the specific metrics calculated within your trade area, see the dedicated sections on Demographics, Traffic, Cannibalization, and Competitors & Complements.
Last updated
Was this helpful?