SUBJECT AREA - DEMOGRAPHICS
What are Demographics?
Demographics is the science of evaluating populations and understanding their component parts.
When you look at different shopping center locations, the landlord or your broker should always be able to provide you with a demographic report for the population surrounding their specific location.
By reviewing these demographic reports side-by-side for each location that you’re considering, you will be able to determine which site best mirrors your ideal customer profile.
Each demographic study starts with (typically) three population rings with a specific radius for each ring. These studies most often include one of the following ring radius combinations - 1,2 & 3 miles, or 1,3 & 5 miles, or 3,5 & 7 mile rings.
The more urban the site, the “tighter” the rings (smaller radius) because these areas are more densely populated. The more rural the site, the “wider” the rings (larger radius) since these areas are more sparsely populated. These rings tend to represent the distance that people are willing to travel to shop at the center being considered and, for each ring, they show the number of people within each of those specific distances from the subject location. The shorter the distance from the subject site, the more likely they will be to travel to shop at that center based on a shorter drive time. Additionally, the greater the number of people within that individual distance ring, the greater the number of people available to come to that shopping center location. That’s why they chose the specific ring distances used in those reports.
Each demographic study will include basic information like population (broken down by age groups), household income, home values, ethnicity, marital status and education levels for the individual population rings that are chosen.
Most reports will also go into further detail. These in-depth reports will include data such as home ownership percentages vs. percentage of renters: number of businesses; types of business; and number of employees that work within these population rings.
And why is this important?
Let’s say you were going to open a restaurant and you had two possible locations - one with 12,000 daytime employees within 3 miles, and the other with 45,000 daytime employees within three miles. Which site has more potential customers for your lunch crowd?
Additionally, our website discusses several of the numerous other important variables to consider when comparing demographic data.