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Lecture 4

Lecture 4-January 29

Course Code
Herbert Kronzucker

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Lecture 4: January 29
Big boxes, impact not really on retail strip but on shopping malls/department stores. Ie KMART and
Virtual shopping very unlikely to replace traditional shopping experience:
x Shopping is a recreating not just exchanging economics.
x Shopping is a social interaction.
x They want to touch the item.
x The physical acquisition of product is enjoyable.
Internet shopping is not new. It is like catalogue shopping just new technology. Vast majority prefer to go
to the product rather than have the goods come to them. Some companies have both physical presence and
virtual shopping ie Sears.
Spatial Concepts and the Value of Location
Key Geographical Concepts
1. Distance Decay
2. Intervening Opportunity.
Eg. migration, retail interceptor rings.
If distance is too great, interaction is zero. This is called the range.
3. Range: point at which demand (interaction) falls to zero because of increased travel costs.
4. Gravity Model
Case Model:
A and B are hot dog stands
The only variable that determines where we go is distance if A and B have the same
quality/service/product. This concept is called the Thiessen Polygon.
But if quality/service/product of A is better then the line moves down to B. But the line is still indifferent.
This is the Gravity Model, ie Converse. Greater the attraction reduces the friction of distance. (greater
attraction, more customers)
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