Gravitech Development (Gravity Modeling)
Another great location analytics company is Gravitec Development. Their products are specifically focused on site selection for the grocery and convenience store industry. James Puffer founded the company in 1993 when he purchased all the software copyrights from Howard L. Green & Associates. With Mr. Puffer’s experience at Retail Systems, Inc. in Minneapolis, he was able to create the first Windows-based gravity modeling system for supermarkets. The SITESPLUS product is still used today by most supermarket companies in the United States.
Grocery stores spend a lot of time trying to correctly project the sales of a new store and trying to project the sales of existing stores whenever a competitor opens nearby. Users of SITESPLUS upload specialized demographic data at the block group level. This specialized demographics data is created by combining normal demographic data (usually provided from Synergos Technologies) with modeling data provided from DSR Marketing Systems. When combined, this data consists of estimates of the dollars spent per person per week. Today in the United States this number averages around $50. Next the competition is loaded into the software and the competition’s estimated sales are entered. This often takes some research because these sales figures are not public. Finding a sales volume can be as simple as walking into the grocery store and chatting with a produce or meat employee. An average grocery store will produce around $250,000 a week in sales. There are some that do $1 million+ in sales a week. In general, areas with strong performing stores are ripe for more competition because in theory there are more dollars in the market to transfer to the new store. Conversely if all the stores in the trade are poor performers then a new store will likely be a poor performer as well because the purchasing power is just not there to support it.
Gravitec Development also has an annual conference that focuses on store site selection. I attended this conference several times years ago and recently returned to it to speak about our Planned Grocery® platform. This has always been a relatively small conference. At this recent conference 85 people attended, along with 18 spouses. The recent conference started out with remarks from Mr. Puffer and then there was presentation on Aldi from Dr. David Rogers of DSR Marketing Systems. This presentation went over Aldi’s strengths and weaknesses and he also went into details that pertained to the SITESPLUS model. Mr. Puffer then discussed the next SITESPLUS update formal release. Other presentations focused on beacon technology, using cell tower data to count customers, misleading maps and statistics, and the proliferation of small organic stores. During the writing of this book MTN Retail Advisors has taken over putting on this conference. As of 2017, this conference is now called the Gravisite Site-Selection Conference.