Your key to successful retail growth? Accurate trade areas. Site selections, marketing campaigns and network optimizations all depend on them.

Yet many of the most popular site selection techniques still lead to incomplete, and even incorrect, trade areas. This includes radius rings.

The Severe Limitations of Radius Rings

Analysts have been told again and again to start with radius rings when evaluating a potential site. But radii modeling comes with a very big limitation:

It treats distance uniformly.

When you simply draw a concentric circle around a site to view demographic and psychographic information on the people who live within it, there’s no way to see where those people actually drive.

Just because someone lives within close proximity of a store doesn’t mean they’ll shop there. They may not be the right customers for your brand, or they could be facing major gridlock during rush hour that prevents them from turning onto the street that leads to your store.

With radius rings, you can’t possibly know when shoppers are actually driving by your location.

There are few times when your location alone is the final destination. While there are exceptions—a favorite restaurant on date nights, a clothing or furniture retailer that sells exclusive items—most consumers stick to what’s convenient. They’ll frequent the grocery store that’s on their way home from work, or the lunch spot near their office, or the easy-to-get-to center that offers one-stop shopping with all kinds of brands.

When it comes to finding those locations, radius rings are useless.

The better approach.

A GPS data-powered, spatial analytics tool that allows you to analyze potential sites based on driving behaviors.

You can analyze commuting patterns.

You can identify peak hours.

You can even reveal the geographic and psychological barriers that might prevent people from visiting a potential site.

These insights are what separate the successful from the struggling. Analyzing trade areas based on actual trips and traffic flows gives you a clearer understanding of each location’s potential.