Location Data Knowledge Base
Data methodologies, and Release schedules.Using the Power of Alteryx Data Packs. Part Two
Using the Power of Alteryx Data Packs. Part Two: Advanced Trade Area Creation
In the first article of this series, I gave a high-level overview of what the Business Insights and Location Insights packs are, and how to utilize them in your Alteryx workflows. Hopefully you found that article helpful and want to dive into some of the topics we covered in more detail.
Background
This post will explore advanced trade area creation. In the previously mentioned post, I explained how easy it was to create trade areas in Alteryx using the “Trade Area tool” located in the Spatial Tool palette. With this tool, you can easily calculate various radii around a particular spatial object point (in this example, a store point). This can be done leveraging the TomTom drivetime engine included in the Insights data packs or using a straight-line distance. With our single hardware store, we set a basic, fixed drivetime-based trade area. This isn’t a problem with a single store, or maybe even multiple, if they are all in similar geographic areas. But as we know, this isn’t normally the case. In the world of Site Selection analytics, it’s generally more accurate to create your trade areas by some sort of capture rate. Capture rate is a metric based on obtaining a certain percentage of sales or customers around a given location. It creates a dynamic trade area that will change shapes and sizes based on the location of the store and the surrounding customers. For example, a 70% capture rate in a hyper-dense location like New York City will usually result in a smaller trade area because most customers aren’t willing to traveling long distances to patronize. Whereas a store in rural Wyoming would theoretically generate a very large trade area because most customers are spread out over greater distances.
If you want an in-depth primer on different trade area methodologies, check out this article: https://economicdevelopment.extension.wisc.edu/articles/trade-area-analysis/
With that assumption, how do we create dynamic, capture rate-based trade areas in Alteryx without having to hand-define each location? Well like all things in Alteryx, there’s “more than one way to skin a cat.”
Use Case
In this example, I’m going to walk through a cool Analytic App that we built here at Alteryx. If you are unfamiliar with the concept of Analytical Apps in Alteryx, I recommend you check out the Analytical App Interactive Lessons via Academy on the Community: Creating Analytic Apps.
To start, we have some more customer data. Each customer in the dataset has an associated store that they’ve patronized, as well as Total Sales and Total Visits to said store. We also have the location information of the customer. What the app does, is build a trade area for a specific store based on the locations of the top ‘X’% of customers (‘X ‘being defined by the user). Top customers are based on Frequency and Monetary spend at the store location. Since this has been configured as an Analytical App, most of the parameters or dependent on what the user has entered. This gives a very clean, and easy to use interface for the end-user. Publish something like this onto Alteryx Server, and you’ve easily scaled this report across your organization.
We begin the workflow by setting “Filter Tools” after our “Input tool” to be able to set Total Visits and Total Sales to whatever values make sense with our data. Based on those inputs, we calculate the number of Customers in the trade area. Once we have that value, we begin to construct our geography (trade area). We bring in the “Distance Tool” to calculate the distance between our customers and selected store. From there, we will select our ‘X’% customers to include within the trade area based on proximity to the store location. Using the “Poly-Build tool” located in the Spatial Tool palette, we build a polygon around the selected customers that correspond to our filter and capture criteria.
The Final Step is creating a map report. This is done via the Alteryx Reporting Tools. If you’re unfamiliar with how these work, check out these Interactive Lessons on the Community: Reporting in Designer. Our final output looks something like this:
The trade area in the example image is generated for Store 3, based on a 70% capture rate with sales greater than $0 and at least 1 visit within the last year.
Wrap up
I hope this app provides a useful framework for you to begin developing more advanced trade area logic. The beauty of this app is that it can be easily customized to fit your data and metrics. Also, with the Alteryx Reporting tools, you can create your own maps and visuals to suite your reporting needs.
Additional Resources
