Huff Model for selected retail stores in Bangalore

1. RETAILING MANAGEMENT
ASSIGNMENT
HUFF’S MODEL
GROUP 2

2. HUFF’S MODEL
Introduction
The concept of a retail trade area has been used by analysts and practitioners in retail site
evaluation and other market studies for a very long time. In fact, retail trade area analysis
and site evaluation are complementary procedures. Retail trade area analysis focuses on
locating and describing the target market. This knowledge is critical for both marketing and
merchandising purposes, as well as for choosing new retail locations. In site evaluation,
trade area analysis is combined with many operational requirements of the retail chain.
It is much easier to analyze trade areas and produce market profiles using GIS. The
majority of GIS software includes functionality for extracting and aggregating data at
various levels of geography. As a result, trade area analysis became one of the most popular
areas of GIS applications in analyzing business problems. The most common definition of a
retail trade area is used for the purpose of this article. According to this definition, a retail
trade area is “that area, typically around the store, from which the store derives most of its
patronage”
Huff’s law of shopper attraction delineates trading areas on the basis of product assortment
(of the items desired by the consumer) carried at various shopping locations, travel times
from the shopper’s home to alternative locations, and the sensitivity of the kind of shopping
to travel time
 Huff’s gravity model/ huff’s law of shopper attraction states that consumers will shop
at a store more often if the size of the store is increased and the distance to shopping
area is decreased.
 The theory says that because the center is larger, it may have larger/ wider assortment
of goods and services
 Distance has the opposite effect on probability of patronage
 All things being equal, consumer wants a shopping area close to home
 Huff’s Gravity Model (Huff’s Law of Shopper Attraction)
PiJ = (SJ / TiJλ) / ∑ (SJ / TiJλ) Where;
PiJ = Probability of consumer traveling from origin (i) to given shopping center or store (j)

3. SJ = sq. ft. of selling space in shopping location, expected to be devoted to particular product
being sold
TiJ = travel time
λ = exponent reflecting effect of travel time on different types of shopping trips (i.e. one may
travel more for medical product)
n = no. of shopping locations available

4. STORE 1: MORE SUPERSTORE, KORMANGALA
Product for Men: Gillette Razor
 Product: Gillette Shaving Blade
 Store Location: More Superstore (Aditya Birla Retail) in Forum Mall, Bengaluru
 Approximate Floor Area:3460 Square feet.
 Assuming time taken by consumers as 5 minutes, 10 minutes and 15 minutes.
 Taking λ =1 as the product is important for daily use.
By huff law probability of consumers travelling from home to shopping location is given by
P5 = (3460/51
)/ (3460/51
+3460/101
+3460/151
) = 54.54%
P10 = (3460/101
)/ (3460/51
+3460/101
+3460/151
) = 27.27%
P15 = (3460/151
)/ (3460/51
+3460/101
+3460/151
) = 18.18%
Analysis: From the Huff’s model, we have observed that the greater the travel time to the
store, lesser is the probability of a customer shopping from the store. Here, probability of
customers coming to shop to the store (Who lives in travel time less than 5 minutes) is 54.5%
Catchment Analysis of Forum Mall, Bengaluru

5. More Store in Forum Mall,Bengaluru
Gillete Products at shelves in the store

6. Product for Women: Veet
 Product: Veet
 Store Location: More Superstore (Aditya Birla Retail) in Forum Mall Bengaluru
 Approximate Floor Area:3460 Square feet.
 Assuming time taken by consumers as 5 minutes, 10 minutes and 15 minutes.
 Taking λ =2 as the product is not so important for daily use.
By huff law probability of consumers travelling from home to shopping location is given by
P5 = (3460/52
)/ (3460/52
+3460/102
+3460/152
) = 73.46%
P10 = (3460/102
)/ (3460/52
+3460/102
+3460/152
) = 18.36%
P15 = (3460/152
)/ (3460/52
+3460/102
+3460/152
) = 8.16%
From the above calculations, we observe that the female oriented product have a greater
probability of selling than the male oriented products. This is perhaps because these female
oriented products are not to be used daily, hence they are purchased with the monthly grocery
shopping, whereas the male oriented products are to be used on a daily basis, so they might
be purchased from the mom and pop stores which are located very near to the residential
areas. Hence we see an increase in the probability of buying female oriented products.
Veet Products at display in the store

7. Catchment analysis of Forum Mall, Kormangala

8. Store 2: Village
Location: #1 Bharthi Plaza, 1st cross, Tavarekere Main Road, Sadduguntepalya, Tavarekere,
Bengaluru, Karnataka 560029
Approximate Floor Area:4320 sq. feet
Time taken to reach Village: Assuming time taken by consumers as 5 and 10 minutes.
Catchment Analysis of Village, Tavarekere Bengaluru

9. Product for Men: Gillette Razor
Taking λ = 1 as the product is important for daily use.
By Huff Law Probability of consumers travelling from home to shopping location is given by
P5 = (4320/51
)/ (4320/51
+4320/101
) = 66.66%
P10 = (4320/101
)/ (4320/51
+4320/101
) = 33.33%
Gillette Razors in Village

10. Product for Women: Veet
Taking λ = 2 as the product is not so important for daily use.
By Huff Law Probability of consumers travelling from home to shopping location is given by
P5 = (4320/52
)/ (4320/52
+4320/102
) = 80%
P10 = (4320/102
)/ (4320/52
+4320/102
) = 20%
Veet product placement in Village

11. During our observation period in Village and after speaking to the store manager and the
sales people, it was seen that the male oriented product or Gillett razor in our case was sold
more than Veet. This can be attributed to factors in favour of the more sold product. The
placement of Gillett in Village is in a very strategic position, being very close to the entrance
and also it occupies one whole rack. This gives it maximum visibility and also it acts as a
trigger for men to buy the product as soon as they enter the store also because it is a
frequently used product. Also, connecting it back to the Huff’s model customers for whom
the travel time is 5 minutes have a high probability of entering the shop and due to the other
above mentioned factors the product is sold more frequently.
For Veet although the travel time of 5 minutes guarantees a higher probability of women
entering the store, yet there are other factors that act as impediments to its sale. The
placement of the product is moderately far from the entrance and it is on the fourth shelf of
the rack which is lower with respect to the customer’s view. Thus, the product doesn’t
receive much eye balls as compared to Gillett. Also, all the variants of Veet are not available
in the store and the presence of affordable parlours in the catchment area of Village, makes
the product Veet a less frequently bought item than Gillett. Thus, although larger store time
and lesser travel time acts in favour of both the products, but other factors like shelf space,
product placement, visibility, importance and frequency of the product do have a
considerable impact on the sales of the product from the respective store.

12. Store 3: Nilgiri’s
Catchment Analysis of the store, Bengaluru
Product for Men: Gillette Razor
 Product: Gillette Shaving Blade
 Store Location: Nilgiri’s: Kormangla,Bengaluru
 Approximate Floor Area: 1400 Square feet approx.
 Assuming time taken by consumers as 3 minutes, 7 minutes and 15 minutes.
 Taking λ =1 as the product is important for daily use.
By huff law probability of consumers travelling from home to shopping location is given by
P3 = (1400/31
)/ (1400/31
+1400/71
+1400/151
) = 61%
P7 = (1400/71
)/ (1400/31
+1400/71
+1400/151
) = 26%

13. P15 = (1400/151
)/ (1400/31
+1400/71
+1400/151
) = 12%
Gillette Products at shelves in the store
Product for Women: Veet
 Product: Veet
 Store Location: Nilgiri’s-Kormangla,Bengaluru
 Approximate Floor Area: 1400 Square feet approx.
 Assuming time taken by consumers as 3 minutes, 7 minutes and 15 minutes.
 Taking λ =2 as the product is not so important for daily use.
By huff law probability of consumers travelling from home to shopping location is given by
P3 = (1400/32
)/ (1400/32
+1400/72
+1400/152
) = 81%
P7 = (1400/72
)/ (1400/32
+1400/72
+1400/152
) = 15%
P15 = (1400/152
)/ (1400/32
+1400/72
+1400/152
) = 3%

14. Catchment analysis of the store, Kormangala
Veet Products at display in the store
STORE 4: MORE SUPERMARKET, BTM LAYOUT
Product for Men: Gillette Razor
Location: Maruthi Nagar Main Road, Near MR Bakery, Bengaluru, Karnataka 560029
Approximate Floor Area: 2050 sq. feet
Time taken to reach more at BTM: Assuming time taken by consumers as 5 and 10
minutes.

15. Catchment Analysis of more Supermarket, BTM 1st
stage
Product for Men: Gillette Razor
SKU size in more: 3.10 sq m (data according to store manager, Mr. Naveen)
Average weekly sale: 1-2 items (data according to store manager, Mr. Naveen)
Taking λ = 1 as the product is important for daily use.
By Huff Law Probability of consumers travelling from home to shopping location is given by
P5 = (2050/51
)/ (2050/51
+2050/101
) = 66.66%
P10 = (2050/101
)/ (2050/51
+2050/101
) = 33.33%

16. Gillette Razors in more
Product for Women: Veet
SKU size in more: 8.10 sq. m (data according to store manager, Mr. Naveen)
Sale on weekdays: 3-4 items on average (data according to store manager, Mr. Naveen)
Sale on weekdays: 10-12 items on average (data according to store manager, Mr. Naveen)
Taking λ = 2 as the product is not so important for daily use.
By Huff Law Probability of consumers travelling from home to shopping location is given by
P5 = (2050/52
)/ (2050/52
+2050/102
) = 80%
P10 = (2050/102
)/ (2050/52
+2050/102
) = 20%

17. Veet product placement in more
During our visit we noted that there exists very less Gillette razors in the store, and we were
pretty confused about the lesser availability of the same. We spoke to the Store manager of
the particular outlet, Mr. Naveen and from the conversation we came to know that Gillette
razors are slow moving items in the store and the same results to about 1-2 items sale.
Veet on the other hand was pretty fast moving item despite the fact that it is not a product for
regular usage. The same may be due to the fact that the area is dominated by PG for Women
rather than gents PG.

18. Conclusion:
By this model we noticed that sales of the product depends upon the place of store and
availability of product for example if we see sale of Gillette is more in village, on other hand
sale of Veet in More(BTM) is high and Gillette is less because of more ladies PG. So
according to the place of a store and based on walk-ins manager has to find out what are the
key areas to increase sales and has to concentrate more on those areas.