You may call it catchment area, influence area or even isochrone,… the concept lying behind is at the heart of a successful location.
You’ll find here all you need to know about catchment areas and more important about what to look at to choose a good location. Enjoy your reading!
The catchment area for a point of sale is the geographical area from which the majority of its customers or potential customers come.
It is represented on a map in the form of concentric zones drawn around an address.
The catchment area can be calculated in different ways:
– Isochronous catchment area: measures the time it takes to reach an address by foot, bike or car
– Isometric catchment area: measures the distance around an address
Depending on the degree of proximity around an address, we speak of a primary, secondary or tertiary catchment area.
The primary catchment area is the closest area around the point of sale. For example: 5 min walk / bike / car.
The tertiary catchment area is the furthest area around the point of sale. For example: 15 min walk / bike / car.
And the secondary catchment area logically corresponds to the intermediate zone. For example: 10 min walk / bike / car.
Studying the commercial potential and attractiveness of a location is an essential step in choosing a good location.
The study of catchment areas makes it possible to evaluate the projected turnover by estimating the size of the market in a specific are and is at the heart of the construction of a local market research.
This study will allow you to evaluate, among other things :
– the number of your (future) customers
– the profile of the nearby population (age, activity, families, etc.)
– the frequency of visits to the area
– other shops and competitors in the vicinity
The criteria for choosing a location will vary according to the project: a nursery, for example, will not be located in an area where there are few families, and conversely a fast-food restaurant will target areas where its typical customer base is represented.
Get all catchment area data on Symaps location intelligence platform!
The study of the catchment area is an important step in making the right decision when choosing a business location.
Knowing one’s catchment area and area of influence also allows one to better anticipate and adapt one’s marketing and sales strategy.
Thus, the pedestrian and car traffic data make it possible to determine the number of people visiting a particular area by relevant time slots and filtering by days of the week.
The number of visitors provides useful information for setting up relevant commercial action during certain time slots or for adapting opening hours, for example.
For brands with several points of sale, the study of their different catchment areas also makes it possible to optimise their coverage by identifying potential overlapping areas or grey areas, but also by identifying areas with the highest potential.
When opening a franchise, the franchisor typically needs to provide a local market report to the prospective franchisee.
In France, according to the “Doubin Law” (Article L330-3 of the Commercial Code), a franchisor must provide its franchisees with “a presentation of the general and local state of the market for the products or services to be covered by the contract and the prospects for the development of this market.
This document, which is part of the pre-contractual information document (DIP), must therefore provide the necessary information on the market around an address. The study of the catchment area is part of the local market report.
The isometric catchment area is calculated on the basis of a distance around a given address.
It is represented by one or more concentric circles.
The isochronous catchment area is calculated according to the time needed to reach a certain address depending on the means of transport used.
The catchment area differs for pedestrians, car drivers or cyclists.
To carry out a location study, the first step is to visualise the different catchment areas on a map. This visualisation allows you to see at a glance the extent of the area of influence around an address.
But the visualisation of the catchment area on the map is only the starting point of the analysis. Once the catchment areas have been defined, it is necessary to go into more detail to identify the potential of a location.
The study of your catchment area should include three types of data : socio-demographics, footfall and businesses and amenities in the zone.
Data on the population and the competitive environment only provide a static picture of the catchment area.
However, this information is still not enough. Depending on the target market, it is essential to take into account the number of visitors to an area in order to correctly assess the potential of a location.
Let’s take an example:
You have identified two potential locations but:
– The first is in a business area that at first glance seems interesting: the population in the vicinity corresponds to the profile of your clientele, the address is well connected and there are few of your direct competitors nearby.
– The second is an area that does not meet these criteria to a much lesser extent: a smaller population and more competition nearby
Is it easy to choose the location of your future sales outlet between these two areas? Not necessarily.
Everything will depend on the number of people frequenting the area.
The area around the first location is attractive at first glance, but turns out to be little busy during the day, unlike the second location.
The catchment area of an address is the geographical area from which the majority of customers come. The isochronous catchment area, the most commonly used, is represented on a map by concentric zones and depends on the travel time (on foot, by car or by bicycle).
It is also sometimes referred to as the area of influence.
Knowing your catchment area allows you to measure the potential of a location and gives you assumptions to build your future revenue projections.
The study of the catchment area is an essential step before opening a business, especially when choosing a business location.
The information needed to understand the catchment area includes the population in the vicinity, the competitive environment and the facilities in the area, but also the number of visitors of the area and customer flows.
The intersection between these different types of data allows for a precise knowledge of the local market. The importance given to each criterion is strongly correlated to the type of project envisaged.
There are two ways to go about identifying a high value business location.
If you already have a good comprehension of the local market, and you have already identified one or more premises, all you have to do is compare the data on the two addresses. Depending on the project you are considering (opening a fast-food restaurant, a grocery shop, a bookshop, etc.), comparing the most important criteria will enable you to make an informed choice.
Conversely, you may have identified the characteristics of the area you are looking for (young population, high weekend traffic, close to a cinema for example), but you do not know what area to start with. In this case, using a tool such as Symaps can help you identify the most relevant areas according to your criteria in a few clicks, and then compare them. All on the same interface. Learn more
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