16 March, 2020
Marketing Logic analytical company has expanded the Atlas geoinformational system capabilities by updating a module that evaluates the business locations attractiveness based on David L. Huff's retail gravitational theory. The module can be used in the Atlas geoplatform interface and through the API systems to find the most profitable location in terms of attracting visitors.
The updated online service determines the potential retail point ability to “attract” its share of customers within a given radius, depending on a geolocation, facility area, transport infrastructure, density and number of inhabitants.The Huff model is based on the hypothesis that a store attractiveness for a buyer depends on two parameters as the area of the store’s trading floor (direct relationship with attractiveness) and the distance to the retail point (inverse relationship).The method allows for determining the relative proportions of consumers distribution between outlets. It is effective and useful tool at the preliminary stage of calculating and analyzing a point’s turnover, assessing investment attractiveness or development forecast taking into account the competitors’ actions, the emergence of new points nearby.
The service advantage is an operation on the client side without involving IT or GIS specialists. It takes a few minutes in a simple and intuitive program interface or directly in the Atlas system menu to analyze the various locations attractiveness. Location reports are generated superfast or online.
Due to the increased level of automation and new introduced elements, the service is able to independently search for the best locations in the city and recommend the optimal store characteristics in each of them. This approach compares favorably with a manual selection and can significantly save research time, while maintaining the familiar transparency of the classic Huff’s gravitational model.
The main parameters that the user sets are the selectable area on the map for analysis and the estimated area of the outlet. The system itself, based on preloaded data, calculates the store’s gravity coefficient, generates a report on the number of people, existing retail points, determines the weight of competitors and estimated location, calculates the number of customers forecast value.
“The Huff model has been proving its effectiveness for decades, and many of our customers use this model in conjunction with modern statistical estimation methods of the location potential, for example, for retail or shopping centers. As part of the module update, we wanted to supplement the classical model with all the modern geographic information services advantages: high accuracy, a wide range of additional geodata and automation. The module has become highly effective in solving the whole range of network management tasks as opening new points, closing ineffective ones, moving, reformatting. The updated module takes into account all changes in the city that can affect the investigated object business indicators. It can also be automatically launched to monitor “gravity” changes over an existing network.Atlas.Huff module forecasts are much more detailed than the classical gravitational approach and “manual” expert methods provide,” says Dmitry Galkin, managing partner at Marketing Logic.