Incorporating E‐commerce into Retail Location Models

The use of location models in retail businesses is well-established, particularly the grocery sector. Many alternative methods are today but spatial interaction model (SIM) has a proven record success. To date, that success relates purely to face-to-face activities, modeling and predicting visits by consumers outlets. However, retailers cutting back on store investments concentrating investment convenience market e-commerce: latter now reached 7.2% share U.K. market, with continued growth forecast. Although used extensively for helping locate new stores, so far e-commerce not been built into existing models. Yet seems be activity. Extensive evidence demonstrates geography demand supply as important groceries they retailing. We therefore take up challenge incorporating classic Methodologically, we find standard distance deterrent term production-constrained SIM unsuitable flows: explore inverting this extensive gains prediction accuracy, an interesting finding contributes ongoing applied literature.