Huff Gravity Model: Who Will Visit Your
Store?
PREDICTING THE PROBABILITY OF CONSUMER
BEHAVIOR
Huff Gravity Model
Huff Gravity Model
If you’re opening a retail store, the first thing you have to understand is ‘how many
customers will patron your store’
Because why even bother opening one up if you can’t bring in enough people?
In order to help you solve this problem, you can predict the probability of consumer
behavior with other competing retail stores with the Huff Gravity Model.
Sounds complicated? But it’s actually not so bad. Let’s go step-by-step how to calculate
the Huff Gravity Model.
Let’s Get Started
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Because the Huff Gravity Model assumes that a store’s attractiveness is based on
its size and distance, you are going to need these 2 essential data sets for this
analysis:
▪ Existing retail locations and store size
▪ Census tracts (as detailed as possible)
Of course, you will need some GIS software to calculate distance and display the
model in a map.
As an illustration, here is where our five retail stores are located with census tracts as
the basemap.
Step 1:Calculate distances from retail stores to census tracts
First, you will take your census data and calculate distance from each census
tract to each retail location. In our example, we have 5 retail stores and 738 census
tracts.
▪ Add 5 fields for distances in the census tract data set (‘dist1’, ‘dist2’, ‘dist3’,
‘dist4’ and ‘dist5’).
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▪ Calculate the distance for each retail location to each census tract. In ArcGIS,
you can use the Near Tool and select each retail store individually.
Now, each census tract will have a distance to each retail store in its respective
distance fields. For example, the distances for Store 1 will be in field ‘dist1’)
Step 2:Incorporate attractiveness with store size and distance
In this step, we will incorporate attractiveness for each retail location. To clarify,
attractiveness is related to the store size (as in square footage) and inversely
proportional to distance.
▪ In the census tracts data set, add 6 fields to hold the attractiveness score for
each retail store and a total score (‘attract1’, ‘attract2’, ‘attract3’, ‘attract4’,
‘attract5’ and ‘totattract’)
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▪ Attractiveness uses distance and the size of retail location. Take the size of the
retail store and divide it by the drive-time (or distance square). For
example, ‘attract1’ is the square footage of 200,000 for retail store 1 divided
by ‘dist12‘.
▪ Finally in the ‘totattract’ field, sum up all the attractiveness scores. (‘attract1’ +
‘attract2’ + ‘attract3’ + ‘attract4’ + ‘attract5’)
When you plot this on a map, retail store 3 will attract these census tracts the most
based on its distance and store size.
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Step 3:Measure the probabilities for each retail store’s market share
Now that we have each retail store’s attractiveness score, we can start calculating the
probabilities where shoppers are most likely to go for each census tract.
▪ Add fields for each retail location which will be percentages. (‘marketshare1’,
‘marketshare2’, ‘marketshare3’, ‘marketshare4’ and ‘marketshare5’)
▪ Take the attractiveness score for each retail location and divide it by the total
attractiveness. (‘attract1’ / ‘totattract’)
Huff Gravity Model
Market Share
When close to a retail store, it will capture a large share of the market – hence higher
values in the color red. Equally important where other stores are located, it will
capture that market share. In particular, the yellow patches indicate there are other
retail stores with higher probability of grabbing that share of the market.
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How about where there are census tracts at distances equal between two retail
stores?
For these retail stores, the market share is more ‘up for grabs’ and could potentially go
to either retail store. In other words, this means that the probability could be at about
50% in these census tracts.
Huff Gravity Model Formula
The formula for the Huff Gravity Model is as follows:
Pij: Probability of a consumer at point i travelling to retail location j
Sj: Size of retail location
Tij: Travel time (or distance) from consumer at point i to travel to location j
As size of a retail store increases, probability increases that a consumer will patron a
retail location. Similarly, the likelihood customers will frequent that particular store
decreases when distance increases (because it’s in the denominator).
Don’t forget that the sigma notation simply means that you are summing values. As
shown above in step 3, all this formula represents is taking the attractiveness score
and dividing it with the sum of all retail store’s attractiveness – which should equal
100%.
Test It Out Yourself
If you are going to invest the time and money to open a store, you should run a Huff
Gravity Model.
All you need is a bit of GIS data and software to get things started.
As shown today, the two big details you will need are the size of store and distance
coupled with census tract population. With these variables, you are on your way to
better predict consumer behavior and the probability they will visit your store.
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If you want to optimize your store’s location, read more about the location-allocation
analysis.
