Advanced Huff Model with Statistical Calibration

The advanced Huff model uses improvements by Dr. David Huff on the original Huff model to enhance its performance. Specifically, this method will allow distance between stores and customers to be calculated through standard Euclidean (straight-line) distance or, alternatively, drive time or drive distance. Multiple parameters can be selected for each store rather than a single variable. The advanced Huff model also contains a calibration utility that allows you to calculate the proper exponent values in the model through observed shopping behavior or a market survey. The calibration utility is discussed in more detail in the Huff model calibration section.

The results of the Huff model can be used to do the following:

• Estimate, define, and analyze market potential.
• Assess the economic impact of a new site location.
• Forecast sales and potential of existing stores and outlets.
• Assess the impact of competitive and environmental changes on outlet performance.

Learn more about Advanced Huff Model with Statistical Calibration.

Steps:

1. Click the Business Analyst drop-down menu and click Sales Potential Modeling.

   The Sales Potential Modeling wizard opens.

2. Click Create Modeling Analysis and click Next.
3. Click Advanced Huff Model with Statistical Calibration as the type of modeling analysis and click Next.
4. Click the first drop-down menu and click the layer containing your sales potential field.

   You have the option of checking the Only show Business Analyst data layers (BDS) check box. Business Analyst geography layers contain many fields, including consumer expenditure data, that can be used as indicators of sales potential.

5. Click the second drop-down menu and click the ID field for your Sales Potential layer.
6. Click the third drop-down menu and click the sales potential field.

   Business Analyst geography layers often use a tree structure to present categories of fields that can be expanded to show individual fields in that category. Hold the CTRL key and click + or - in the tree to expand or collapse the tree structure.

7. Click Next.
8. Click the first drop-down menu and click the competitive stores layer.
9. Click the second drop-down menu and click the Store ID field.
10. Click Next.
11. Click one of the methods of selecting a potential store location.
12. If you click By entering address, do the following:
    1. Enter the address of the location by clicking each of the fields in the Value column.
    2. Click OK to continue.
13. If you click By selecting a feature from layer, do the following:
    1. Click the first drop-down menu and click the layer containing the potential site.
    2. Click the second drop-down menu and click the individual feature to use for the site location.
    3. Click Next.

14. The Calibrate Model utility is covered in detail in the Huff model calibration section. You can also access this information by clicking the Advanced Huff Model with Statistical Calibration option on the Modeling wizard. Click Use statistically calibrated parameters from previous analysis or click Enter parameters manually and click Next.

15. If you click Enter parameters manually, a dialog box appears.
16. Define the parameters by doing the following:
    1. Click a method for how distance will be calculated in the model.

       Use the + or - buttons to add or remove predictor variables.

    2. After adding a variable, click the variable in the Variable column to activate a drop-down menu for choosing any variable in the layer.
    3. Click the Variable table in the Potential Site Value column and type a value.
    4. Click the Coefficient column and type a value between -1.0 and -3.0 that indicates the impact of travel distance on a customer's willingness to travel to make a purchase at the store.

       The closer the number is to -1.0, the more willing the customer is to travel a greater distance to make the purchase.

    5. Click Next.
17. Type a name for the new model in the text box, type any comments, then click Finish.

    Your new analysis area is created and displayed on the map.