Retail Location Analysis

University of Washington
Geography 350
Outline of retail location analysis approaches

Retail location analysis

     I.   Regional scale

    II.   Market-area analyses
            A. Assume spatial monopoly
                 1. Non-analytic approach
                 2. Analytic approaches that assume the size of the relevant market area. How to make that assumption?
                      (a) rules of thumb
                      (b) consider competing locations: Theissen polygons and Reilly’s law

            B. Assume shared market areas: market inter-penetration
                1. Saturation Index
                2. Determine primary market area
                     (a) Customer spotting
                     (b) Probabilistic market area : the Huff model
                     (c) Compare the geodemographic characteristics of the possible market areas

           C. How to select from among the possible market areas?
                 1. Generally desirable attributes
                 2. Analog methods
           (a) Guesswork
                     (b) Discriminant analysis
                     (c) Multiple regression
                 3. Micro-area analysis
                      (a) Geodemographic data: clustering
                      (b) Geo-lifestyle data

           D. Target promotion activity to dispersed markets

III.   Site location
          A. Characterizing site types
          B. Site requirements
          C. Situational constraints