Retail Gravity Modelling

By Sarah Stowe | 29 Oct 2015 View comments

Introduction


The Retail Gravity Model (also known as HuffÕs Gravity Model) is a modified version of Sir Issac NewtonÕs Law of Gravitation. Gravity modelling studies retail choice, and the probability of a customer visiting a particular Centre/Outlet.


The idea behind gravity modelling is that the probability of a given customer visiting and purchasing at a given Centre/Outlet is a function of the distance to that Centre/ Outlet from his/her home or work, and its ÒAttractivenessÓ for the customer to want to use that centre/outlet rather than other retail opportunities. Attractiveness of the Centre/Outlet can be defined in a number of ways including the size, population density, internal or external characteristics, choice of products/services, appeal to a certain lifestyle and brand.


Benefits

  • Determine the market boundaries of trade areas with accuracy
  • Assess the site potential of home maker centres/shopping centreÕs/outlets
  • Study the cannibalization of own and competitors centres/outlets within a trade area
  • Ability to undertake Ôwhat-ifÕ and market share type of analysis
  • Visualize findings using the latest mapping tools


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