Designing a location model for face to face and on-line retailing for the UK grocery market

The vast and rapid expansion of internet usage has generated widespread online sales, making the UK one of the leading countries for e-commerce. Until now there has been no clear understanding or analysis of the spatial variations of online activities. Many studies have,however, examined the variance in online buying among different demographic groups usually based on limited survey information. These variations have often been explained by reference to two theories – efficiency theory and diffusion of innovations theory (Rogers, 1995). This lack of research to date is also manifest in the lack of consideration of online sales in traditional store location methodologies. The aim of this research is to establish a new model for site location which includes e-grocery shopping on the UK retail sector. Having explored the literature around the geography of e-commerce and the surveys of geodemographic usage, the thesis explores data unique to the academic sector- namely Sainsbury’s store revenue (for both physical and online channels) and customer data based on their loyalty card (interaction data). The analysis of these data sets establishedfour major trends in the relationship between online share and store provision with insights into the substitution of online and physical channels in areas with limited accessibility to physical grocery stores. Using this information, a new, revised SIM is built and calibrated to include estimates of revenue for both face to face and online stores. It is hoped this will provide an important addition to the existing kitbag of techniques available to retail store location planners

Designing a location model for face to face and on-line retailing for the UK grocery market

The vast and rapid expansion of internet usage has generated widespread online sales, making the UK one of the leading countries for e-commerce. Until now there has been no clear understanding or analysis of the spatial variations of online activities. Many studies have,however, examined the variance in online buying among different demographic groups usually based on limited survey information. These variations have often been explained by reference to two theories – efficiency theory and diffusion of innovations theory (Rogers, 1995). This lack of research to date is also manifest in the lack of consideration of online sales in traditional store location methodologies. The aim of this research is to establish a new model for site location which includes e-grocery shopping on the UK retail sector. Having explored the literature around the geography of e-commerce and the surveys of geodemographic usage, the thesis explores data unique to the academic sector- namely Sainsbury’s store revenue (for both physical and online channels) and customer data based on their loyalty card (interaction data). The analysis of these data sets establishedfour major trends in the relationship between online share and store provision with insights into the substitution of online and physical channels in areas with limited accessibility to physical grocery stores. Using this information, a new, revised SIM is built and calibrated to include estimates of revenue for both face to face and online stores. It is hoped this will provide an important addition to the existing kitbag of techniques available to retail store location planners