Distance Decay is a geographical term which describes the effect of distance on spatial interactions. The Distance Decay shows the distribution of your customers around a location and can be used to help determine whether creating a new custom trade area is warranted for conducting customer analysis.
Distance Decay counts customers within 50 bands around a location. By default, the bands are measured in 1 mile (US) or 1 kilometre (CA) increments, which can be changed at the account or workspace level.
ENVISION users can find this information without leaving the platform by clicking the "How to Read" button in the top-right corner of your reports.
Unit Bands: The size of the band. It can be kilometres, miles, or minutes.
Absolute Count: The count of customers within each distance band.
Absolute %: The percentage of customers within each distance band.
Cumulative Count: The count of customers in the current distance band PLUS the previous bands.
Cumulative %: The percent of customers in the current distance band PLUS the previous bands.
Base Absolute Count: The count of the selected base (households or population) within each distance band.
Base Cumulative Count: The count of selected base (households or population) in the current distance band PLUS the previous bands.
% Pen (Absolute Count ÷ Base Absolute Count × 100): The market penetration of the customers in an individual distance band.
This example shows 1 km distance bands from a Toronto store location and a customer file. The red box highlights that there are 113 customers living between 3 to 4 km from our location - 3.15% of the total customer list. Cumulatively, we have 492 customers living from 0 to 4 km - 13.71% of the total customer list.
There are 97,298 households in the 3 to 4 km band from our location in the benchmark (Ontario) and 499,112 households live between 0 to 4 km from our location. 113 customers out of a possible 97,298 households represent 0.12% penetration in the 3 to 4 km band in the market.
The customer penetration decay graph shows the percent penetration of customers for each distance band. The distance band for 25-26 km is the highest percent penetration value at 0.14%.
The cumulative percent of customers graph can be used to create an area that captures most of our customers. We can look at how the line rises and choose the point where the line begins to level off (point of inflection). In this example, we could choose the 47-48 km band as the point of inflection.