Huff Gravity Model
You have narrowed your possible new sites down to three locations. Each has met various aspects of what exactly you are looking for in a location. How might you want to proceed to compare these three to determine the best one? One option might be the Huff Model.
The trading area is the area where a business will be pulling customers from. Remember back to our model:
We have a primary trading area, secondary trading area and fringe trading area to review. Huff’s model may be useful for helping us determine how many shoppers we may get in each of these areas.
Huff’s model is a mathematical model that recognizes the correlation between patronage and distance from the location of the store. So in other words, the further a consumer is from your location, the less likely it will be for that person to shop there. This model does not account for other factors that may affect a customer patronizing your store, such as having a product or service that is specialized, that they cannot get elsewhere. It simply looks at the distance from the retail location.
This model can help you to determine areas with high and low sales potential based on several factors including how many people live within a certain radius of your proposed location and what the disposable income is in this market. Incorporating the Huff model along with GIS and census information can give potential new businesses a great deal of information about several possible sites.
If you would love to look further at how this model works, check out “How the Huff Gravity Model Predicts How Many Customers Will Visit Your Store” or “Huff Model” on ArcGIS for all the mathematical details!