What is Catchment Analysis?
Catchment is important for retailers and venues as it’s ‘the defined area around their store, site or venue that has a sphere of influence to draw in customers’. Your catchment size will be dependent on the nature of the business, the offering provided and availability from competitors in the local area. Any business whether a large retailer or SME needs to understand their catchment area and target market to improve targeting, reduce marketing wastage and increase ROI.
Catchment analysis was initially used to study the location for potential new outlets or stores. Analysis conducted includes socio-demographics (age, life stage, education, income) to identify customer’s preferences, what they might be interested in and their buying power. Infrastructure (Road, rail, public) indicating how accessible a location is and can influence how far afield your target audience might live. Competitor businesses (the number, product/services offered and price point) to highlight whether the market is already saturated and possible demand levels.
This information is key to deciding where to open your next store or outlet and can be paramount to successful trading. Spending time and resources on researching the chosen area can help ensure that the new store will be profitable and will attract the required number of customers once open. If retailers open a store in an area where people can’t afford their products or have no requirement it will be disastrous. A little like trying to sell ice to Eskimos!
Today it’s not only businesses looking to open new stores that can benefit from catchment analysis. Brands and retailers will certainly gain an advantage if they re-evaluate the catchment area of existing stores. Catchment analysis provides key information about who lives within the local catchment, how far they are prepared to travel and what ranging, pricing and promotions will help to drive footfall into store and increase sales in store. For new businesses it can confirm viability whereas for existing stores, it can highlight if the strategy needs to be redefined or tweaked in line with the target audience.
Residential and Workforce Population
Your catchment will consist of consumers that live within your target area but also workers that shop within this area. The workforce population is important to consider as the number of businesses, size and industry type will also be influential on sales volumes and potential footfall.