Accurate demographic measurement - Part I
While 1 3 5 mile radial demographics are standard among most CRE professionals, they are not always the most accurate for analysis. Why not?
Let’s start by asking ourselves what we are trying to determine - “How many people live within a certain area around a site, and how many of them will likely come to my business?”
In standard geographies (read: flat topography void of significant geographical features), the 1 3 5 mile analysis is probably fine. But for many parts of the country, which may include rivers, lakes, oceans, swamps, deserts, mountains, airports, military bases, etc., it’s not a good measure. A better method is drive-time analysis.
Here’s an example:
Let’s assume you know that you need an absolute minimum population of 12,000 people within 1-mile to make the site acceptable for your business. "So 12,000 people in the 1-mile, no exceptions, J-P."
OK. Does the following site work?
Well, according to the standard demographic report, there are 9,863 people in the 1-mile radius around the site.
Are you sure?
Let's look at it a different way. Here's what the 5-minute drive time overlay looks like superimposed on top of the 1-mile radius:
Are you positive this is not a viable site for your business? How many people are there really?