In 1931 a gentleman name William J. Reilly wrote a retail axiom that is still used today for market planning of retail stores. It is commonly known as Reilly’s Law of Retail Gravitation and was inspired by Newton’s law of Gravitation which stated “two bodies attract each other with a force that is proportional to the product of their masses and inversely proportional to the square of the distance between them.” Reilly’s formula is used to predict the likely division between two trade centers at which shoppers will go one way or the other.
Reilly recognized that trade centers produce gravitational pull. Further he realized that bigger trade centers had more mass and therefore, as stated in Newton’s Law, more gravity. Here’s a new scoop, though. Your store produces a gravitational field as well. The gravitation that your store produces is based on a number of elements, not the least of which is its size. Knowing this fact can aid you in the management of your business. Let me give you a couple of examples of what I mean.
Let’s set gravitation aside for a moment. We’ll move back to it in a moment and hopefully you’ll follow the connections. If you were to throw a rock in a pond the resulting impact would produce concentric rings of waves. Stop and visualize that for a moment and you will notice that the waves become smaller and smaller as they depart the center of the impact. Now think of that rock as your store (no I don’t mean its going under 🙂 ). Your store has the greatest power to attract and influence people at its point of impact…at its location. The farther you move from your store, the smaller its rings of influence become. But hold on, the problem is further complicated by every other rock that is being thrown into your pond…those rocks are your competitors and their ring disrupt yours.
OK let’s move back to gravity and you should now understand why the further you move from your store the less powerful its gravitational pull. This knowledge can really help you when you are formulating your store’s advertising campaign. Because your store’s power to influence is greatest at its center it makes sense to concentrate a sizable portion of your advertising budget there. There are good cost-effective programs out there to help you accomplish this.
Remember that the further you move from your store’s center as regards advertising the stronger your concessions have to be. For instance, if a car dealer offered me a deal that was $200 cheaper than the guy across the street did, I would, no doubt, walk across the street and take advantage of the better price. Both of these car dealerships would exert on me similar levels of gravitational pull. However if a dealer 2 states away offered me a deal that was even $350 less, I would not go. I would not buy. I would not be within the gravitational influence of that dealer.
Knowing more about retail gravitation can make you a more informed and better store manager.