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Transcript of Chapter7retaillocationsppt 120903011050-phpapp01
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Presentation by Shaina Lacher, Milton Law, and Matthew Sullivan
CHAPTER 7: RETAIL
LOCATIONS
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Section 3:
Other Locations,Location and RetailStrategy, and LegalConsiderations
Matthew Sullivan
Retail Locations: Chapter 7
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*What types of locations are available to retailers?
*What are the relative advantages of each location type?
*Why are some locations particularly well suited to specific retail strategies?
*Which types of locations are growing in popularity with retailers?
Questions:
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The Importance of Store Location
- Store location is most often the first consideration in a store choice
- Having a good location increases chances of developing a strong sustainable competitive advantage
- Location decisions can be risky and should be well-thought out
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Process of Choosing Particular Locations
- Size of the trade area- Occupancy cost of the location- Pedestrian and vehicle customer traffic location- Restrictions on operations by property
managers- Convenience of location for customers
Trade area: the geographic area that encompasses most of the customers who would patronize a specific retail site
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Section 1
- Types of locations
-Unplanned retail locations
Milton Law
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Types of Retail Locations
- Freestanding Sites such as outparcels and merchandise kiosks
- City or Town Locations such as central business districts, main streets, and inner city locations
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Advantages
- Convenience for customers
- High vehicular traffic and visibility
- Modest occupancy costs
- Separation from competition
Disadvantages
- Limited trade area when not around nearby retailers
- Higher Occupancy costs that strip centers
- Usually located where there is little pedestrian traffic
Advantages and Disadvantagesof Freestanding Locations
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Freestanding Sites
Retail locations for an individual, isolated store unconnected to other retailers
Outparcels Merchandise Kiosks
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Merchandise kiosksSmall selling spaces, typically located in the walkways of
enclosed malls, airports, train stations, or office building lobbies.
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Market Analysis Model
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Advantages
- Lower occupancy costs
- Higher pedestrian traffic
Disadvantages
- Traffic is limited due to congestion
- Parking problems reduce consumer convenience
City or Town Locations
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Central Business Districts
(CBD)
Advantages
- Draws people during business hours
- Heavy public transportation
- Pedestrian traffic
- Residential area as well
Disadvantages
- High security required
- Shoplifting
- Parking is poor
- Evenings and weekends are slow
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Main Streets vs. CBD’s
- Occupancy costs are generally lower than CBD’s
- Fewer people are employed- Smaller selection due to fewer stores- Range of entertainment is usually smaller- City planning sometimes restrict store
operations
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Inner City
- Retailers here achieve higher sales volume and higher margins, thus producing higher profits
- Redevelopments in inner cities can cause increased traffic and parking difficulties, causing them to be controversial
High density urban areas with higher unemployment and lower median incomes than surrounding areas
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Section 2
- Shopping centers
Shaina Lacher
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Advantages
- Convenient locations
- Easy parking
- Low occupancy costs
Disadvantages
- Limited trade area
- Lack of entertainment
- No protection from weather
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Examples
- Target
- Costco
- Lowe’s
- Sports Authority
- Toys “R” Us
Power CentersConsist primarily of collections of big box retail stores
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Regional Malls
Less than 1 million square feet
Super Regional Malls
More than 1 million square feet
Shopping Malls
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Advantages
- Wide variety of stores
- Wide assortment of merchandise
- Shopping and entertainment
- No inclement weather
- Uniform hours of operation
- Attracts many shoppers
Disadvantages
- Occupancy costs are generally higher
- Mall control over business operations
- Competition can be intense
Shopping Malls
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Mall managers try to make malls more of an enjoyable experience in an effort to keep people shopping as long as possible
- Common areas
- Family lounges
- Great food
- Playgrounds
- Entertainment
Enhancing the Mall Experience
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CORPUS CHRISTI, TX – La Palmera Mall
Redevelopment
Mall renovations and redevelopment
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Advantages
- Ease of parking
- Relaxed open-air environment
- Pedestrian traffic tends to be higher
- Occupancy costs and operating restrictions are less
Disadvantages
- Less retail space
- Smaller trade areas
- Attract fewer customers
Lifestyle CentersShopping centers with an open-air configuration of specialty stores, entertainment, and restaurants
with design ambience and amenities
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Composed mainly of upscale apparel shops, boutiques, and gift shops carrying selected fashions or unique merchandise of high quality and price
- Tiffany
- Gucci
- Max Mara
- Giorgio Armani
- Tommy Bahama’s
Stores in Phipps Plaza
Fashion/Specialty Centers
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Shopping centers that contain mostly manufacturers’ outlets
Las Vegas Outlet Center
Outlet Centers
- Strong entertainment component- Becoming more popular outside
the United States- Tourism is important for outlet
centers
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Shopping centers that typically employ a unifying theme reflected in the individual shops, design, and to some extent their merchandise
- Located in places of historic interests or for tourists
- Anchored by restaurants and entertainment facilities
- Generally targeted at tourists, they may also attract local customers
- A common element of these centers is entertainment, although some rely solely on the shopping experience
Theme/Festival centers
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Combines enclosed malls, lifestyle centers, and power centers
Omnicenters are becoming more popular in the U.S. partly from the desire of tenants for lower common-area maintenance charges and the growing tendency of consumers to cross-shop.
St. John’s Town Center,
Jacksonville, FL
Omnicenters
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- Offer an all-inclusive environment so that consumers can work, live, and play in a proximal area
- Combine several different uses into one complex, including shopping centers, office towers, hotels, residential complexes, civic centers, and convention centers
Mizner Park, Boca Raton, FL
Mixed Use Developments
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Section 3
- Other Locations- Location and Retail
Strategy- Legal
Considerations
Matthew Sullivan
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- Airports
- Temporary or pop-up stores
- Resorts
- Store within a store
Other Location Opportunities
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- High pedestrian traffic
- Sales per square foot are higher than mall stores
- Rent is higher
- Hours are longer
- Inconvenient location for workers means higher wages
Airport Apple store
Airports
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- Good for businesses trying to create a little hype
- Good introduction for new stores or products
- Provide visibility for a business
- Provide additional sales during holidays and special events
Target pop-up store
Temporary Locations (pop-up stores)
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- Captive audiences
- Wealthy customers
- People with time on their hands
St. Regis Aspen Resort, CD
Resorts
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- This concept benefits both companies to attract more customers
- Helps fill holes in product offerings
Occurs when a manufacturer has its own store and salespeople inside a retailer store
Store within a store
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Social Networking GameBusinesses take
advantage of locations where customers are, like the internet and online games, and provide them with alternative ways to spend money
Farmville
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- Shopping behavior of consumers
- Size of Target Market
- Uniqueness of Retail Offering
Factors that affect location choice
Location and Retail Strategy
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3 Shopping Behaviors
- Convenience shopping
- Comparison shopping
- Specialty shopping
Shopping Situations
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Shopper Mentality
- Wants to exert little effort to acquire product or service
- Wants convenient location
- Less concerned with price
- No hassles
Convenience Shopping
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Shopper Mentality
- General idea about product or service
- No strong brand preference
- No strong retailer preference
Comparison Shopping
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Shopper Mentality
- Knows what they want
- Accepts no substitute
- Strong loyalty to product or brand
Specialty Shopping
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Estimates to determine size of
target market
- Estimate max # of customers eligible to purchase product or service
- Estimate percentage of potential customers
- Estimate # times customers could purchase the product or service in a year
- Estimate highest density of target market
Size of Target Market
For most retailers, the size of the target market and the location of the highest density of their target market will help determine where their business should be located.
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Consumer mentality
- Location doesn’t matter as much because the product is that important or unique
Uniqueness of Retail Offering
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Environmental Issues
- Above ground risks
- Hazardous materials
Zoning and Building Codes
- Sign restrictions
- Licensing requirements
Legal Considerations
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Above-Ground Waste
Hazardous Materials
Environmental Issues
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Signs Licensing
Zoning and Building Codes