Trade areas refer to geographic locations that attract visitors and vendors. Trade area analysis (TAA) consists of sizing up these geographic locations to determine if they offer profitable growth opportunities for businesses in those areas.
Think of trade area analysis as a way to better understand trade activity at a particular location. For instance, it helps manufacturers determine the categories and number of businesses operating in a particular area, their potential customers, and consumer trends specific to those locations. The practice helps businesses forecast demands and optimize their operational strategies to stand out from competitors.
Here are three aspects that trade area analysis can help manufacturers and industrialists with.
Optimal Site Selection
Trade area analysis allows manufacturers and industrialists to fully analyze an area and view it from different angles. It helps them determine if it’s a good fit for their business and choose the right location for their industrial plant, storage facilities, and retail and distribution outlets. This also facilitates business decision-making.
For instance, a food and beverage manufacturer may ideally want to set up operations at a location where they’ll easily be connected to their key suppliers. Similarly, an auto manufacturing company would want to operate in an area with good accessibility to keep transportation time and costs at a minimum. Likewise, setting up a retail store requires consumer accessibility to ensure a maximum number of customers can visit or shop from that outlet.
Site selection is an integral part of running a business. It gives business owners and manufacturers insight into how many customers they’re likely to get at specific locations, helping them assess their customers’ purchasing power and their competitors in nearby areas. Trade area analysis lets manufacturers and industrialists decide whether or not they should set up operations at a particular site. It helps them choose locations with high demand for their goods, less competition, and greater accessibility for all stakeholders involved.
Valuable Competitive Intelligence
Regarding competition in the area, here’s another thing trade area analysis offers industrialists and manufacturers: competition intelligence. While you may want to be the only business operating in an area, this is less common than you’d think. Even if you are the only business of your kind operating in an area, you’ll likely experience competition in your territory at some point. This is because your competitors are also looking for business opportunities. It’s extremely likely that they, too, eye opportunities you do. In fact, they may even beat you to it and make the first move.
Trade area analysis gives you an insight into who else is operating in a particular area. It can help you determine where your competition lies and who benefits from it. You can learn more about your competitors’ business environment, supply chain networks, operational strategies, and overall focus through location intelligence and big data analytics tools. This means you can see the whole picture and thoroughly analyze the situation to assess whether or not you should set up operations in a particular area.
You can weigh the pros and cons of choosing a particular area through the competitor intelligence gained through trade area analysis. This allows you to assess the potential risks and growth opportunities before diving into a location. You can also use the technology to assess your competitors’ victories and failures and enter the market more prepared.
Strategic Supply Chain & Inventory Planning
As discussed above, a strategically chosen location can accelerate your business’s success. A direct contributor to this decision is your supply chain network. More specifically, the supply chain and inventory planning decisions can set up a business for success or failure.
Trade area analysis lets manufacturers visualize how productive and efficient their supply chain processes will be in a given area. It allows businesses to dig deeper and study new ways of managing their operations. For instance, the insights gained through trade area analysis can help manufacturers and business owners determine the shopping timings. They can also learn the types of customers shopping at different times and the types of products that tend to sell faster. and the types of products that tend to sell faster at those times. This helps them establish their prime customers and what they’re seeking.
The information collected on trade area analysis helps businesses plan their supply chain and inventory systems. Business owners can narrow their decisions to individual products and supplies. They can also plan shipment days according to shopping trends and estimate when to order inventory or supplies. This way, they can cater to market demands for certain products during certain times of the year, ensuring their consumer base is satisfied. Trade area analysis helps businesses determine what, when, and how much to stock at different points.
Contact Trade Area Analysis Experts
Ready to enhance your business strategy through trade area analysis? Make sure you work with a reputable big data analytics company to achieve the desired results. That’s where PREDIK Data-Driven comes into the picture.
PREDIK Data-Driven provides advanced big data analytics solutions across the United States. We use customized big data-based research tools to help businesses gain valuable insights. Our trade area analysis tools extract historical and customer data to strengthen your business strategy, enhance supply chain optimization, and analyze user behavior. We also conduct demand forecasting and competitor analysis in the process.
We use geomarketing analytics tools, location intelligence solutions, customer analytics software, market assessment tools, and supply chain predictive analytics to provide manufacturers, industrialists, and business owners with comprehensive data science solutions.
Request a demo today and learn how our services help businesses in the retail, automotive, banking & finance, and food and beverage industries.