Analysis of trade area for retail industry store using consumer purchase record

Abstract

For retail industry such as supermarket and convenience store, it is important to understand customers. In marketing perspective, to match marketing activity to customer needs is one of the most important strategy for retail industry. In this study, we focus on trade area of retail store. If we can grasp the trade size of a store, manager can plan optimal strategy, e.g. how to spend for advertise activity and where we should open a new store. In this study, we use ID-POS data which is the purchase record with customer identification data of a super market chain and calculate the trade area radius, then we show the cause and effect model to estimate trade area size using store causal data. Moreover, we evaluate our model and discuss how to be decided the trade area size.