Measuring the Location Attractiveness Index (LAI) | Singapore

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This is a concept pioneered by Ebenezer Heng. Note that by using foot traffic for a location only is very one sided, there is a need to consider more factors when determining the attractiveness of a particular location. 

With the availability of social listening, he incorporated the location and tenants’ sentiments to gather a more holistic view of the location.  

This three tenet concept is the Location Attractiveness Index and it’s based on the averaging of three variables: 

 (fT + Ls + Ts)/3 = The higher the score, the more attractive the location is. E.g. Mall A which has a score of 80 is better than Mall B that has a score of 60. 

Foot Traffic (Physical) (fT)

You can do this sample count physically by measuring traffic flow at different areas (or entrances) in the mall or around the area. 

The rule of thumb is 1 person per second, so using a base of 100 seconds, you can ticker the number of people passing by. 

We will recommend that your sample count includes some outside the store location as well. 

So, after you have taken a few location counts, average it to get the fT. For example, if you had taken the foot traffic sample count in 5 locations, it will be: 

(fT1 + fT2 + fT3 + fT4 + fT5)/5 = fT 

Location Sentiment (Ls)

There are many tools to measure the chatter online, such as Radiance 6, Indices, Brandtology. For LAI, we are using Indices. By listening to the online chatter over a certain period, indices will assist to derive the sentiment about the mall. 

For example, Indices did a sentiment review on the top 50 malls in Singapore. On the top is Ion Orchard while Parkway Parade is at the bottom.

People familiar with these two malls will be surprised to find Parkway Parade, a popular mall throng with traffic most of the time right at the bottom of the review. 

The sentiment of the location/mall is an indication of people visiting it as a destination by itself rather than for practical needs. Practical shopping includes meals, grocery and buying necessities.  

For this concept, we assume that practical shoppers equals to physical foot traffic. 

Thus, a higher score on the Location sentiment gives you a wider reach. 

The reason being destination shopping is able to attract different demographics thus giving the location a better (and wider reach). 

Tenants Sentiment (Ts)

This index measures the attractiveness of the tenants in the mall. Usually, it will comprise of the anchor tenant, F&B, retail, children and entertainment outlets. The average of these 5 components will give you the average tenant Sentiment.

The higher the sentiment means a more positive experience which will directly translate to likely repeat visits to the mall. 

Reading sentiments on each of the 5 components will also give you an insight on the tenant mix in the mall. 

Summary, LAI or Location Attractiveness Index is:

fT = Physical Traffic Flow 

Ls = Reach of the location 

Ts = Likelihood of repeat visit 

(fT + Ls + Ts)/3 = LAI (Location Attraction Index) 

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