Share of Potential Report: Weights
Overview
The Share of Potential (ShOP) report, is available only when trade area type selected is Overlapping, and represents the portion of the population, household consumer spending, and other demographic characteristics within a location's primary trade area that are mainly oriented to the location versus other retail options in the area. Population counts are attributed to only one trade area, which is different from standard "Overlapping" where population intersecting two or more trade areas is fully counted in each of the trade areas. Share of Potential is related to, but different from market share which requires detailed site characteristics and an estimation of trade area potential spent at establishments located outside the immediate market area.
Methodology and Using Weight Variables
Share of Potential is the spatial analysis of neighborhoods within a site's primary trade area (PTA) in relation to the competitive influences of competitors whose trade areas overlap these same neighborhoods.
Distance to location (time or miles) is a key factor for most consumers and is always part of the calculations for Share of Potential. Geoscape has calibrated distance decay curves to properly reflect the decrease in customers as distance increases. The decay curves are based on three market area types within RetailTarget (i.e., dense urban, urban-suburban, and rural-small market determined during upload process) and typical trade area distances for retailer types
Primary trade area may be the same for all sites plotted or the user may want to define variable trade area sizes for each site via one of the various ways offered by GIS, if so licensed. One of these ways is via Geoscape's Variable Trade Area Model (VTAM), that can be used to define each site's PTA and retailer type. The neighborhood and community level retailer PTAs defined by VTAM typically account for 75%-85% of the retailer's sales. Percentages are lower for PTAs in high tourist areas and for convenience/fast food retailers with larger numbers of out-of-area shoppers.
When the site file contains two or more types of retailers (i.e., convenience, neighborhood, community, and regional), run the VTAM separately for each retailer type and then combine all sites into a single file with the VTAM trade area distance in a separate column (see Predefined Trade Areas for details) . This will ensure the appropriate primary trade area radius/travel time is used for each site.
Other ways of defining variable trade area sizes, if licensed, is by uploading custom trade area polygons, or based on customer points.
Weights (Advanced Options)
Additionally, there are many store and site characteristics that influence a consumer's likelihood to shop at a retail location. Store characteristics include merchandise, pricing, cleanliness, size of sales area, number of movie screens, number of stylist chairs at a hair salon, etc. Site characteristics include parking, visibility, street access, adjacent land use, etc.
As such, GIS allows you to define up to five weight factors for store and site characteristics that can be included in the site file and defined during upload process as Point Data. The following are some typical characteristics that influence location sales and how the values should be prepared for the weight columns in the site file:
Important: No missing values are allowed and all values should be positive numbers:
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Sales area: square feet or meters for the merchandise area and where customers have access. When evaluating potential for a department (e.g., consumer electronics), include only the sales area for that department. Use actual value, Weight Transformation is "yes", and High Weight Value is "High".
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Other measures of size: number of movie screens, sales registers/service windows, stylist chairs, shelf space, etc. Use actual value, Weight Transformation "Yes", and High Weight Value is "High". Custom transformation is often appropriate for these measures.
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Store ranking: Assuming the location with highest sales is ranked "1" and lowest store is ranked last; Use rank number, Weight Transformation "Yes", and High Weight Value is "Low".
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Relative retail synergy: A site that is part of a shopping center or retail node with strong consumer appeal could be assigned "100", while an average shopping center is given a relative "80" and a below average center "50". Use assigned value, Weight Transformation "No
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Special feature: multi-screen theater with IMAX, supermarket with tortilleria. For example, a theater with IMAX could be assigned "100" and other theaters "70" to reflect the increased appeal of the IMAX location. Use assigned value, Weight Transformation "No".
Create Report
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In the submenu, click the Graph icon and then select Advanced Report.
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Select Share of Potential check box.
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Click Advanced Options.
Advanced Options are available and may be defined (but not required) whenever optional site characteristic weight variables are included in the uploaded site file.
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Select desired Site Weight check box.
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For each Site Weight selected define the following:
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Weight Contribution: Adjust the relative importance of each weight so their combined contributions sum to 100. For example, if the 1st of three weights is twice as important as each of the other two weights, then 1st weight contribution is "50" and the other two each contribute "25".
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Weight Contribution values auto adjust as values are modified so the sum of all weights selected total 100.
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To override the auto adjustment select lock check box
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Weight Transformation: Transformation mathematically normalizes the weight variables so each will have values between 1 and 100. It is recommended to use transformation if the weights have not been previously calibrated.
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High Weight Value: Select "High" if the higher weight values are associated with increased sales or market share. Select "Low" if the weight values are inversely associated to increased sales.