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Trainlines and highways alter how far retail customers will go

April 9th, 2009

Category: Retail Business Tips

How far will a Retail Customer Drive?

How far will a Retail Customer Drive?

Customers typically shop at stores conveniently located to where they live and work. These customers form the trade area zone.

The primary zone is the geographic area from which your store is expected to derive 60 to 65% of its customers from. This zone is usually less than 10 minutes drive from your store. (Fig 1)

The secondary zone is the geographic area of secondary importance in terms of customer sales, generating about 20% of store sales. It is usually no more than 15 to 20 minutes drive. (Fig 1)

The tertiary zone includes customers who occasionally shop at your store. These customers lack adequate retail facilities closer to where they live, or there are excellent transport services to the store or centre, or the customers pass through the area during the course of their day. The tertiary zone can extend from 30 minutes drive to as far as an hour away. (Fig 1)

Primary - Secondary - Tertiary Zone

Primary - Secondary - Tertiary Zones

Accessibility to your stores can change the traditional circular trade boundaries. For example if you are located near a railway station but bounded by main roads it can affect pedestrian access from the local area yet draw primary trade from along the rail line, pulling customers from a long, narrow corridor rather than from a radius of a certain number of kilometres from your store. (Fig 2)

Longer zones may be formed by trainlines and highways.

Longer zones may be formed by trainlines and highways.

These three terms: primary zone, secondary zone, and tertiary zone are all part of a marketing approach called the analog approach. This is defined by the American Marketing Association as:

A method of trade area analysis that is also known as the similar store or mapping approach. The analysis is divided into four steps: 1) describing the current trade areas by using a technique known as customer spotting; 2) plotting the customer on a map; 3) defining the primary trade zone, secondary trade zone, and tertiary trade zone; and 4) matching the characteristics of stores in the trade areas with a potential new store to estimate its sales potential.