Why Is Geography Important
“Geography blended with time equals destiny” – Joseph Brodsky
Geography is probably the most important factor in everyone’s life that is thought about the least. Both physical and political geography dictate how all of us behave and move through the world. We like to think we have conquered geography. That highways, planes, trains, and especially the internet have rendered barriers like mountains, rivers, and forests irrelevant. While these innovations have made the world feel smaller and more connected. Geography, the physical reality of the environment, still plays and enormous and sometimes incredibly subtle roll in steering our behaviour.
The effect of geography is especially pronounced when you are dealing with cities or metro areas. Our highways serve the same purpose rivers and canals did a hundred years ago, and just like then they both connect and divide people. Even with numerous crossings, people tend to stay on side or the other of highways, if you assume customers are unaffected by this barrier you will overestimate your potential customer base, or worse get cut off completely from your target demographic.
Or perhaps you want to flip a house, you know the area you want to target, but there is a highway that runs through the neighborhood. As a whole the neighborhood looks great, houses are selling above asking, income is rising. What you can’t see is that the highway has created a pocket where income is not rising, and houses aren’t selling the way they are just one street over.
Geography isn’t just about how we move around to live, shop, or work. If you own a business, every item you sell has a piece of geography associated with it. Every item in your inventory has a maximum distance your customers are willing to travel to obtain it. Some products like a gallon of milk have an extremely small distance associated with them. Others, such as cars, have a large area you can draw customers from. Understanding this principle, and quantifying it with customer purchasing data can reveal where you are vulnerable to competitors introducing an intervening opportunity to buy the same product.
This geography of commerce can also prevent you from opening up a new location that will cannibalize your existing customers, leaving you with the same amount of revenue you had with one location, but now supporting the overhead costs of two locations.
It is critical, in just about any industry, to have someone on your side that understands the importance and effect of geography. As well as how the data associated with that geography is collected, analyzed, and utilized. Most importantly, you need someone that thinks geographically. Anyone can learn software or statistics or where to find data, but if they don’t see the world through a geographic lens they only have the tools they don’t have the specialization to fully utilize them. Everyone needs a Map Nerd.