Geo-demographics for retailers
July 6th, 2005

This Businessweek article says that thanks to mapping and demographic software tools,”retailers can now find the perfect location in a fraction of the time it used to take.”It “works by combining demographic information from the U.S. Census Bureau with maps that pinpoint site locations of competing retailers,entertainment venues, and other relevant spots.The programs then use that data to analyze the local population’s ethnic makeup,along with info on home ownership in the vicinity”.Then “the demographic information can then be combined with point-of-sales data from stores and loyalty cards.That gives retailers enough info to segment any town or neighborhood according to its buying habits,using what the industry calls “geo-demographics”.So “once the retailer has determined that a certain location suits its targeted demographic,the next step is to calculate the “distance decay effect”,which is how far people are willing to travel to the store.

The New Science of Siting Stores

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