Unit IV Retail Locations

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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 andshould be well-thought out

*Involves large capital investment

*Affects transportation costs

*Affect human resource costs


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*

*Size & characteristics of

population

*Level of competition

*Access to transportation

*Availability of parking

*Attributes of nearby stores

*Property costs

*Length of agreement (if

lease)

*Population trends

*Legal restrictions


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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 ofthe customers who would patronize a specific retail site


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*Process of choosing

Retail Location


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* What types of locations are available toretailers?

* What are the relative advantages of eachlocation type?

*Why are some locations particularly wellsuited to specific retail strategies?

* Which types of locations are growing inpopularity with retailers?

Questions:


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* Levels of location Decision & itsDetermining Factors

Selection of city

Size of citys

trading area Population &

growth trends

Purchasingpower & itsdistribution

No., size &quality ofcompetition

Area within City

Customer

attraction Quantitative &qualitativenature ofcompetition

Availability of

access route Zoning

regulation

Area Expansionpotential

Site decision

Adequacy &

Potentialtraffic

Nature ofadjacent store

Adequacy ofparking


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Market Analysis Model


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- Shopping behavior ofconsumers

- Size of Target Market/Demographic Ex: Spencer

- Uniqueness of RetailOffering

Location and Retail Strategy


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- Convenience Goods

- Shopping Goods

- Specialty Goods

Shopping Situations


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- General idea about product orservice

- Relatively High unit price- Intensive selling efforts- Comparison

- Buy infrequently &deliberatelyplanned

- Can travel to buy

Shopping Goods


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- Knows what they want

- Accepts no substitute- High price

- Special efforts- Purchased in exclusive stores

- Strong loyalty to product orbrand

Specialty Shopping


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: High rents and rising debt

- Estimate max # of customers eligibleto purchase product or service

- Estimate percentage of potentialcustomers

- Estimate # times customers couldpurchase the product or service in ayear

- Estimate highest density of targetmarket

Size of Target MarketFor 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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- Location doesnt matter asmuch because the product is

that important or unique

Uniqueness of Retail Offering


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- Above ground risks

- Hazardous materials

- Sign restrictions

- Licensing requirements

Legal Considerations


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Environmental Issues


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Zoning and Building Codes


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Types of Retail

Locations

Free StandingLocations

1. Neighborhood

stores

2. Highway Stores

Unplanned businessdistricts/ centre

1. Neighborhood business

district

2. Downtown or CBD

Plannedshopping centre

1. Regional

shopping Centre

2. Neighborhood

3. Specific market

4. Occasion/Periodic market


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Types of Retail Locations

- Freestanding Sites such asoutparcels and merchandise

kiosks, no other outlets in the

vicinity, need own pulling

power and promotion to

attract customers

- Example: Grocer, highway

dhabas, Pantaloon, Peter

England in Nagpur, Lifestyle inBangalore, McDonalds on

Mumbai- Pune highway.


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- Convenience for customers

- High vehicular traffic andvisibility

- Modest occupancy costs- Easy parking

- Separation from competition

- Limited trade area when not

around nearby retailers

- Need pulling power &promotion

- Usually located where thereis little pedestrian traffic- Lack of variety for shoppers

Advantages and Disadvantages

of 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 kiosks

Small selling spaces, typically located in the walkways of enclosed

malls, airports, train stations, or office building lobbies.


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Site Location

Shoppers Stop is a free standing store, mostly located away from

central business district. Thistype of retail location is basically anystand-alone building. It can be tucked away in aneighborhood

location or right off a busy highway. Depending on the landlord,

there aregenerally no restrictions on how a retailer should operate

his business. It will probably haveample parking and the cost per

square foot will be reasonable. The price for all that freedom

may be traffic. Unlike the attached retail locations wherecustomers may wander in because they wereshopping nearby, the

retailer of a free standing location has to work at marketing to get

thecustomer inside.


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- Small cluster- Lower occupancy costs- Higher pedestrian traffic- Nearness & availability

- congestion

- Older facilities, lack of space

- Parking problems reduceconsumer convenience

Neighborhood business districts/ CentreCity or Town Locations


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Neighborhood/ Main Streets vs. CBDs

- Occupancy costs are generally lower than CBDs

-Fewer people are employed

- Smaller selection due to fewer stores

- Range of entertainment is usually smaller


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Planned Shopping Centres

- Shopping centers

- One or more departmental stores- Serves large trading area

- High rents

- Attract customers across the city &

suburbs.


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- Convenient locations

- Easy parking

-Low occupancy costs

- Limited trade area

- Lack of entertainment

-No protection from

weather


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Less than 1 million square feet More than 1 million square feet

Shopping MallsLargest planned shopping centres


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- Located in places of historicinterests or for tourists

- Anchored by restaurantsand entertainment facilities

- Generally targeted attourists, they may also

attract local customers

- A common element of thesecenters is entertainment,

although some rely solely on

the shopping experience

Theme/Festival centers


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Other Location Opportunities


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mobile caterers: bringing the mountain to Mohammad

Office-goers are always on the look-out for quick, simple and cost-

effective options for lunch.

meals on wheelsselling low cost apparel in mobile Maruti Omnis

mobile library

*


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- High pedestrian traffic

- Sales per square foot are

higher than mall stores

- Rent is higher

- Hours are longer

- Inconvenient location forworkers means higher wages

Airports


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- Good for businesses tryingto create a little hype

- Good introduction for newstores or products

- Provide visibility for abusiness

- Provide additional salesduring holidays and special

events

Temporary Locations (pop-up stores)


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- Captive audiences

- win-win arrangement

- non-competingmerchandise

Store-in-store


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- Captive audiences

- Wealthy customers

- People with time on their

hands

Resorts

*


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*

*Agglomeration captures the countervailing effects of

complementarily and competition among retailers

*Intra-type - Stores of the same type locating near

one another

*Facilitates consumer search

*Examples: motor miles and restaurant rows

*Inter-type - Stores of different types locating near

one another

*Facilitates multi-purpose shopping, virtual one-stop-

shopping, and offers a wider variety of goods to choosefrom

*Examples: shopping centers and shopping malls

Recognizes that consumers may use multiple stores to meet their

needs - shopping strategically!!


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Beauty Parlors within large college campuses or Ladies hostel

Sports goods and apparel inside or opposite Gyms

Gift shops opposite large wedding halls

Consumer Durables near High rise apartment complexes


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*

Central hub concept

Enables service to more locations withfewer aircraft

Enables matching of aircraft flights withpackage loads

Reduces mishandling and delay in transit

because there is total control of packagesfrom pickup to delivery

*


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*Retail Site Selection

*Kind of product sold

*Cost factor

*Competitors' location

*Ease of traffic flow & accessibility

*Parking

*Market trends

*Visibility

*


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*

Location is a strategically importantdecision in the hospitality industry

The final model had only four variables

Price of the inn/ Positioning income levels

State population per inn

Location of nearby colleges

Unit IV Retail Locations

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