different psychographics of people walking in open air shopping center

Why Psychographics Trump Demographics in Retail Recruitment

Bill R. Shelton, CEcD

Community leaders almost always want to recruit retail or restaurant concepts that will not fit in the community’s trade area because their citizens’ purchasing behavior does not match that of the desired concept’s core customers. But, these same purchasing behaviors that are mismatched for some concepts can also be used to identify which retail and restaurant concepts will find the community to be an attractive candidate for a location.


Purchasing behaviors are revealed through something called “psychographics.” Psychographics is the analysis of the beliefs, attitudes, values, and behaviors – including buying habits – of the trade area’s citizens. A psychographic analysis of the citizens in your trade area is a proven method of gaining a better understanding of what retail concepts will or will not find a community attractive. 


Segmenting customers by purchasing behaviors is the core of a psychographic profiling system. Psychographics is often confused with demographics, but it is much more than mere demographics; it is a way of grouping consumers by what they buy, their media habits, and their lifestyles. 


A psychographic profile of the consumers in a trade area helps community leaders to navigate through many retail concepts and gives them trustworthy information to evaluate options by: 

  • Limiting the use of traditional demographic (census) information such as age, sex, education levels, and income, which has limited value as a basis for making strategic marketing decisions. 
  • Providing non-demographic information such as values, tastes, and preferences, which are much more likely to influence what consumers buy than their demographic characteristics. 

Why is it important for community leaders to know the psychographic profile of the customers in their trade area? 

The different consumer behaviors in a trade area cannot only be described with demographic variables or socio-economic factors. As location decision making has become more scientific and specialized, retailers have increasingly turned to advanced techniques, such as psychographic profiling, to qualify locations. Retailers depend on identifying customer populations that are receptive to their particular brand and merchandising category. Psychographic profiles give corporate decision makers insight into communities where they can find their core customers, as well as new ones. 

Armed with a meaningful psychographic analysis, the community can fashion marketing presentations that are both revealing and applicable to retailers and will gain a competitive advantage by:

  • Identifying the buying behavior of consumers in the trade area as they relate specifically to a given retail concept;
  • Focusing on actual customer behavior, not irrelevant demographic data;
  • Allowing for comparisons of your trade area with other areas where the retailer has an existing operation; and most importantly, 
  • Making sense to retail executives

Obtaining a psychographic database from third-party vendors and consulting firms can help you target retailers who have a high propensity to be attracted to your community.

Journey Awareness Persona Economic Development/Elected Official City Government