Nov

Mobile Phones Influence Gravity

By Bob

OK… bear with me here… this might get a bit technical, but I think I can explain this in a way so everyone can understand what GRAVITY and MOBILE PHONES have to do with each other !

When a store owner is looking to open a retail store in a particular geographic region, they perform an analysis on the surrounding shopping options to determine how many shoppers will potentially visit the proposed location. They use a formula called the “GRAVITY MODEL” ** which calculates the size of the retail area around a specific location based on a comparison of shopping alternatives, driving distance, and population size and demographics. This analysis identifies a “ring” around any given location where potential shoppers reach their “breaking point” (BP) and make a decision to go to store B instead of store A !

For this example, lets assume that one is evaluating a retail location in a densely populated city with evenly distributed customer demographics. In this case, the main factors that get plugged into the “Gravity Model” equation will be:

- Competitors Strength – A popular brand competitor or a larger grouping of stores exert more “pull” and gets consumers to visit from a greater distance.

- Distance to walk / drive – If everything was equal, a consumer will tend to visit the store that is closest.

- Product Offering & Price – Each product type generates it’s own “gravity ring” showing the number of potential buyers in each product category.

SO WHAT ABOUT MOBILE PHONES ?

Well… one thing that is NOT mentioned in the existing gravity equation but should be are MOBILE SALES, MARKETING, and SUPPORT APPS. These APPs are able to put influential store services in the palm of your hand. This is a strong factor when comparing the attractiveness of “store A” vs “store B”. Consumers will shop at a store that is further away if it offers superior OUT-OF-HOME services such as better product information, greater convenience, relevant discounts, personalized solutions, and reduced time spent on non-essential tasks.

In my example city (densely populated), it is easy to imagine that adding mobile services might make your “circle of potential customers” grow from 1/2 MILE to 1 MILE. Calculating the increased area of these circles results in a 400% increase in potential customers ! That is an extremely powerful opportunity for ANY business to increase their revenue. So… I rest my case… Mobile phones really do influence gravity (and have a great ROI ).