“Trade Area Analysis: Reilly’s Law Calculator”
User Guide

How to Use

This page explains how to use the web app "Trade Area Analysis: Reilly’s Law Calculator".

　This calculator allows you to estimate the percentage of customers (purchasing power) from an intermediate city that will be attracted to your city compared to a nearby rival city.

Now, let’s go over how to use the app.

First, enter the following four parameters.

　For “Population of Your City,” enter the population of the city where you want to open a store. Next, for “Population of Rival City,” it is recommended to assume a nearby major city as the rival city.
　Please enter numeric values for each parameter. Leaving fields blank or entering non-numeric characters will result in an error.

　After entering the numbers, click the “Calculate” button to display the results.

(Results Page)

 

　The numbers you entered will be displayed at the top. In this example, although your city has a larger population, the rival city is closer in distance. As a result, the calculation shows that the rival city is more capable of attracting customers from the intermediate city.

Features of Reilly’s Law

This method calculates the proportion of customers attracted by two cities from a city located between them.
It is also known as the “Law of Retail Gravitation.”

Basically, a city can attract more customers from the intermediate city under the following conditions:

① Larger population
② Shorter distance to the intermediate city

Cities with larger populations are assumed to have more attractive stores and shopping facilities. Therefore, people in nearby cities are more likely to shop in cities with larger populations.
As for distance, it is natural to understand that customers are more likely to gather in locations that are easier and quicker to access.

The formula is shown below.

The meaning of each variable is illustrated in the following diagram.

Since distance has a squared effect in the formula, distance plays a very important role in attracting sales and customers.

You can access the web app “Trade Area Analysis: Reilly’s Law Calculator” here.
Go to the Trade Area Analysis: Reilly’s Law Calculator