Trade areas analysis techniques suitable for implementation using GIS technology
The comprehension of geography and the relationships that exist between people and a particular location aids in informing policy making, planning and service provisions decisions. This has facilitated the use of a geographical information system to understand the geography of a region and make intelligent decisions (Beck, 2003). There are a number of trade areas analysis techniques that are suitable for implementation employing the GIS technology.
Site selection techniques
Trade area selection often starts with an expert who initiates concepts that are successful and lead up to the opening up of new stores and establishments in the area. Successful ventures and subsequent expansions are initially characterized by little use or no use at all of the quantitative methodology for site selection. The owner is able to manage the day to day affairs of the stores with operational integrity as a result of the small number of locations (Beck, 2003). This however changes as the trade area expands with the owner experiencing difficulty in controlling all the matters pertaining to his stores.
This technique is used to determine demographic measures by analyzing already existing establishments. Site comparison constitutes one of the basic approaches of trade area selection. Variable that includes age, population, ethnicity and income capabilities are critically examined and compared to those of already existing trade areas.
Organizations employ site scoring techniques as an improvement to site comparison. This technique rates potential trade areas by employing site scoring models which draw a parallel between the various variables in trade areas (Beck, 2003). Adequate considerations are paid to factors such as the periods that the trade areas have been in operation and their respective sizes to ensure that the samples used are similar.
This technique entails a look into the notion that the visiting of a trade area by a customer is informed by the closeness of the trade area to the customer, the attractiveness of the trade area and the closeness and attractiveness of other rival trade areas. The attractiveness of the trade areas is usually determined by its size and its appeal to a particular lifestyle. Models enable in GIS allow for analysis of prospective trade areas
Multiple Regression Modeling
This technique has been used to predict store sales consequently informing trade area selection. It draws parallels between the various variables interact in a particular trade area to give specific trade results (Beck, 2003). Despite having several setbacks such as being overly expensive, un-timeliness and the fact that they are easily compromised with the introduction of other variables, this technique can be adopted by GIS to facilitate the prediction of sales realization of potential trade areas.
This technique is arguably the most important in the determining of a potential successful trade area. However, a substantial number of retailers lack adequate customer information due to the nature of their business. Customers mostly pay for their goods in cash hence the retailers are unable to acquire information on the customers.
The validity of derived statistical data that inform Policy making, planning and service provision decisions
There exist a number of avenues that are employed to aid in the collection of data to inform the suitability of trade areas. The assessment of the potential trade areas covers both the qualitative and quantitative aspects of data collection with regard to the policy making, planning and service provisions decisions. The assessment techniques and approaches are intended to provide those seeking trade areas with the tools and knowledge necessary for them to make the decisions (Beck, 2003). There are however various concerns that arise when sourcing for the relevant information. Among the concerns include:
The lack of enough time and support to facilitate the critical analysis and engagement of the data collected
Limited capacity to gain access to the data independently
The lack of consistency in statistics gathering
Most of the statistics gathering techniques are targeted towards the strategic goals and information needs of the particular organization
The lack of an established commitment by organizations to data guided decision making
There is also a lack of access to and transparency regarding the sets of data currently being used
Fatigue that is often experienced when sourcing for the relevant information
There is however measures that can be put into place to ensure for the validity of the information that is used with regard to the policy making, planning and service provisions decisions (Beck, 2003). These measures will help with some of the concerns. Among the measures that can be adopted to mitigate the concerns include:
The making of probing initiatives that include the gathering of statistics and focus groups a habit
The aptitude of independently gaining access to data within the shortest time possible
The development of techniques and relevant tools to support the implementation and design of the initiatives meant to examine the potential trade areas
There should be adequate support for the data examination processes and the data collected should be made available to everyone by effectively displaying the data
There should be a common location set aside for the storage and subsequent sharing of the data collected
The facilitation of training workshops that would oversee the adoption of best practices and assessment
Beck, S. J., 2003, Making Informed Decisions: The Implications of Assessment, April 10-13,ACRL Eleventh National Conference. Charlotte, North Carolina: American Library Association, 2003.