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IntroductionIntroduction

Define Store:

A store is place , real or virtual , where the shopperscomes to u! "oods & services# $he sales transaction

occurs at this %unction#

The location of retail store has for along timebeen considered the most important Pin

retailing.

Locating the retail store in the right place wasconsidered to be adequate for success.


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Location becomes a critical decision for a retailer for

several reasons. As like;

Location is generally one of the most important factorscustomers consider while choosing a store.

A bad location may cause a retailer to fail even if itsstrategic mix is excellent.. n the other hand ! a goodlocation may help a retailer succeed even if itsstrategic mix is mediocre.

"tore location is least #exible element of retailer$sstrategic mix due to its %xed nature! the amount ofinvestment! and the length of lease agreements

Importance of retail LocationDecisions


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&hange in location gives three potentialproblems' Loss of loyal customers and employers

' (ew location may not have the same characteristics of old

location' "tore %xtures cannot be moved to new location

Location a)ects a store$s long run strategies

*n short run! it a)ects speci%c elements of retail

mix


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'actors affectin" location'actors affectin" location

"i+e and characteristics of market ,population-

Level of competition

Access to transportation

arking space availability Attributes of nearby stores

roperty costs

Length of agreement

opulation trends

Legal restrictions

ther factors


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/arious option are available to the retailer forchoosing the location of store.

The choice of the location of the store depends on

the target audience and the kind of merchandise tobe sold.

A retailer has to choosing among alternate types ofretail locations available . *t may locate in anisolated place and pull the customer to the store onits own strength! such as a small grocery store orpaan shop in a colony which attracts the customersstaying close by

$!pes of Retail Location$!pes of Retail Location


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Typically a store location may be0

(# 'reestandin" )Isolated store#

*# +art of usiness District)-enters .unplanned usiness Districts/#

3# +art of a Shoppin" -enter .+lanned Shoppin" -enters/


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(#(# 'reestandin" )Isolated store'reestandin" )Isolated store

1here there are no other outlets in the vicinity of thestore and therefore store depends on its own pullingpower and promotion to attracts customers.

A biggest advantages for freestanding stores is that

there is no competition around.

This type of location has several advantages includingno competition! low rent! often better visibility fromthe road! easy parking and lower property .

0 1ei"horhood Stores2 colony shops serves smalllocality.

0 i"hwa! Stores02bony store in Ludhiana .


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ow far the customer is willin" to travel4ow far the customer is willin" to travel4

3km 4km 5km 6km 7km

&osmetics' 6.87 km

Apparel4.79m

:wellery ' 3.7km

rocery ' 6

km


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usiness Associated Location: These are location wherea group of retail outlets o)ering a variety ofmerchandise work together to attract customersto their retail area! but also compete against

each other for the same customers.two typesincludes in ;

(# +art of usiness District)-enters .unplanned usiness

Districts/#

*# +art of a Shoppin" -enter .+lanned Shoppin" -enters/


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*#*# +art of usiness District)-enters+art of usiness District)-enters.unplanned usiness Districts/#.unplanned usiness Districts/#

A retail store can also be located as a part of a businessdistrict. r we can refer this as unplanned business centers

A business district is place of commerce in a city which

developed historically as the center of trade and commercein the city or town.

A business districts can be a central! secondary or a(eighborhood business district.

A &entral business ?istrict CBD is the main center ofcommerce and trade in the city. ,high land rates ! intensedevelopment-


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A &


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3#3# +art of a Shoppin" -enter .+lanned+art of a Shoppin" -enter .+lannedShoppin" -enters/Shoppin" -enters/

A shopping center has been de%ned as B a group ofretail and other commercial establishments that isplanned ! developed! owned and managed as a singlepropertyC

The basic con%guration of a shopping centre is aBMall or Strip centre.

A mall is typically enclosed and climate controlled. Awalkway is provided in front of the stores.

A strip centre is a row of stores with parking providedin the front of the stores.


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*n *ndia we can planned shopping centre cancategori+e in two category

Regional shopping centers or Mall:Degionalshopping centers or mall are the largest plannedshopping centers..

ften they are anchored by two or more maordepartment stores have enclosed mall serve a large

trading area and have high rents. ,ansalpla+a!spencers pla+a crossroads! ?LE city in urgaon-

Neighborhood/community/shopping centers:(eighborhood Fcommunity centers usually have abalanced mix of stores including a few grocerystores ! a chemist! a verity store and a few otherstores selling convenience goods to the residents ofthe neighborhood.


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I di t h th f ll ll


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urgaon is set to get the mother of all malls G a humungous 68@lakh sq ftsprawling property that is being touted by its developer ?LE Hniversal as thebiggest mall of the world.

The average si+e of malls here is 4.7 lakh sq ft; this will be 3I times bigger.

The mall G@ christened >all of *ndia@G will be spread over 54 acres and willhave parking space for 38!888 cars.

These ambitious plans have been drawn up at a time when footfalls are down aturgaon malls and rental rates have virtually halved.

all of America in>inneapolis which has a covered area of 5 lakh sq ft! followed by a mall in"hanghai which is 58 lakh sq ft.

>all of *ndia would be bigger than these! she said.The ?LE mall G located on the ?elhi@:aipur highway G has been designed by

:erde artnership which also designed the mega malls in >inneapolis and"hanghai.

The costs are not known but property consultants said it could be in the regionof Ds 3!788 crore.

India to have mother of all malls
http://timesofindia.indiatimes.com/articleshow/1148973.cmshttp://timesofindia.indiatimes.com/articleshow/1148973.cmshttp://timesofindia.indiatimes.com/articleshow/1148973.cmshttp://timesofindia.indiatimes.com/articleshow/1148973.cms


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Selection of Shoppin" centre ) mar5etSelection of Shoppin" centre ) mar5et

"hopping centers are distinctly di)erent from the othertwo maor locations @@ that is! downtown and local businessstrips. The shopping center building is pre@planned as amerchandising unit for interplay among tenants. *ts site isdeliberately selected by the developer for easy access topull customers from a trade area. *t has on@site parking asa common feature of the layout. The amount of parkingspace is directly related to the retail area.

&ustomers like the shopping centerJs convenience. They

drive in! park! and walk to their destination in relativesafety and speed. "ome shopping centers also provideweather protection and most provide an atmospherecreated for shopping comfort. Eor the customer! theshopping center has great appeal.


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6hat Are !our -hances6hat Are !our -hances

?evelopers and owners of shopping centers lookfor successful

retailers.

Then! the developer selects other types of storesthat will complement each other.

To %nance a center! the developer needs maorleases from companies with strong credit ratings.

Mour problem is to convince the developer thatthe new store has a reasonable chance of successand will help the Ntenant mix.N


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6hat a shoppin" centre can offer 46hat a shoppin" centre can offer 4

(eighbor hood shopping centre ' 5 to 38acres!minimum trading population ' 4788 to 68888

&ommunity shopping centre @38 @58 acres!minimum trading population 68!888 to 3!78!888

Degional shopping centre ' 58 to 78 acres!minimum trading population 3!78!888 and more


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Selectin" a shoppin" centreSelectin" a shoppin" centre

Trade area and its growth

eneral income level of the trade area

(o of households

?emographics of trade area >arket analysis

Location of store in the centre

"pace

Dent O lease

Eittings

ther services by developers


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$!pes of shoppin" centers$!pes of shoppin" centers

(eighborhood shopping centers

&ommunity shopping centers

Degional shopping centers Enclosed malls

"pecialty theme shopping centers


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Re"ional Shoppin" -entreRe"ional Shoppin" -entre


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Secondar! usiness centersSecondar! usiness centers

(eighborhoo


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&entral


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'actors to e considered in selectin" a'actors to e considered in selectin" ashoppin" centershoppin" center

ra!ic Count0 the qualitative informationgathered about the passing tra)ic should includecounting the individuals who seem to possess thecharacteristics appropriate to the desired

clientele! udging their reasons for using thatroute! and calculating their ability to buy.

"edestrian ra!ic Count : *n making apedestrian count you must decide0 who is to be

counted; where the count should take place; andwhen the count should be made. *n consideringwho is to be counted! determine what types ofpeople should be included.


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#stimate $f %tore %ales :?ata from apedestrian tra)ic survey can give youinformation on whether or not the site wouldgenerate a pro%table volume for your store.

&utomobile ra!ic Count 'A growing numberof retail %rms depend on drive@in tra)ic for theirsales.


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'ree standin" ) isolated location'ree standin" ) isolated location

Advantages No competition

Low costs

Flexibility No group rules

Larger space

Location by choice

Better road and visibility

Customization

easy paring


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?isadvantages !nitial "i##iculty in attracting costumers

$ost people lie variety in shopping

%ravel time

&dvertising costs

'perating cost are not shared

Built than renting

(nplanned and planned business centers

are pre#erred by costumers


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Unplanned usiness DistrictsUnplanned usiness Districts

Advantages Excellent goods)service assortment

*ariety o# store types

+ide range o# prices *ariety o# customer services

,igh level o# pedestrian tra##ic

Nearness to commercial or social #acilities


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?isadvantages !nade-uate paring

%ra##ic congestion

%ravel time #or sub urban customers &ging retail #acilities

"ecline condition o# central cities

,igh rent and taxes

$ovement o# popular stores to suburbs

"iscontinuity o# o##ering


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+lanned usiness districts+lanned usiness districts

Advantages Excellent goods)service assortment #or long term plan

strong sub urban population

'ne stop shopping pre#erred by customers

Co.operative planning and sharing o# common costs Creation o# uni#ied/ distinctive shopping center image

$aximization o# pedestrian tra##ic

&ccess to high ways and paring spaces

$ore appealing than city shopping centers

0easonable rent 1 excluding enclosed malls2 Lower the#t rates

3opularity o# malls

4rowth o# new types o# malls


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?isadvantages 0educed operating #lexibility

,igher rents

0estriction on goods and services sold bystores

Competitive environment within malls

$embership in associations which may o#

little use %oo many malls in an area

"omination by large anchor stores

Step involved in choosing a RetailStep involved in choosing a Retail


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Step involved in choosing a RetailStep involved in choosing a RetailLocation / site selectionLocation / site selection

*n order to arrive at the decision on where to

locate the retail store a retailer needs to %rst onthe region that he wants to locate the store.

After identifying the region the following stepsPave to be followed .

3. *dentifying the market in which to locate the store.

4. 2valuate the demand and supply within thatmarket. i.e. determine the market potential.

5. *dentify the most attractive sites

6. "elect the best site available


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() Mar*et Identi+cation:

The %rst step in arriving at a decision on retaillocation is to identify the market attractiveness to a

retailer. This is important that retail needs to understand the

market well.

,) Determining the mar*et "otential::

The retailer need to take into consideration variouselements as shown in format. ,features of population-

?emographic features of the population

The characteristics of the household in the area,average household income-

&ompetition and compatibility ,(eed to knowcompatibility O competition in market-

Laws O regulations0, good understanding of the laws


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etermining the mar!et Potential

emographics ofpopulation " area

#ompetition

La$s " RegulationTrade areaanalysis


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0 $rade area anal!sis:

0 A trade area is the geographic area that generates

the maority of the customers for the store.

"rimary trade area:primary trading coversbetween 78@8Q of the store$s customers.

%econdary rading &rea0 this area contains theadditional 37@ to 47Q of the store$s customers.

ertiary trading area coversthe balancecustomers

These trading areas are dependent on distance anddo not always have to be concentric in nature


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$!pes of $rades areas#$!pes of $rades areas#


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4 miles 4 miles

4m

il es

4mil e

s

4mil e

s

4mil e

s

3 mile3 mile 3 mile

"torelocation

A

roposed storelocation


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rade &rea&nalysis


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- . Identify &lternate sites and select thesite:

After taking decision on the location and marketpotential the retailer has to select the site tolocate the store based on these

Tra)ic

Accessibility of the market is also a key factor The total number of stores and the type of storethat exist in the area

Amenities

To buy or to lease The product mix to be o)ered by the retailer


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Retail Location $heoriesRetail Location $heories

Central place theory

Retail 0ravity heory

' 1u!2s 0ravity Model

' Reilly2s La3 of Retail 0ravitation %aturation theory

1er+ndahl 4 1erschman Inde5


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-entral +lace $heor!-entral +lace $heor!

Theory proposed by 1alter &hristaller in 3R55

&hristaller made a number of assumptions such as0

All areas have an isotropic ,all #at- surface

an evenly distributed population evenly distributed resources

similar purchasing power of all consumers andconsumers will patroni+e nearest market

transportation costs equal in all directions andproportional to distance

no excess pro%ts ,erfect competition-


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$erms in -entral +lace theor!$erms in -entral +lace theor!

A &entral lace is a settlement which provides one ormore services for the population living around it.

"imple basic services ,e.g. grocery stores- are said to beof low order while speciali+ed services ,e.g. universities-

are said to be of high order. Paving a high order service implies there are low order

services around it! but not vice versa.

"ettlements which provide low order services are said tobe low order settlements! "ettlements that provide highorder services are said to be high order settlements.

The sphere of in#uence is the area under in#uence ofthe &entral lace.

t il f th th t il f th th


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etails of the theoryetails of the theory

The theory consists of t3o basic concepts:

threshold@@ the minimum population that is required tobring about the provision of certain good or services

range of good or services@@ the average maximum

distance people will travel to purchase goods andservices

Technically the rangeshould be greater thanthreshold for a store tobe economically viable


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Retail gravity theory

%uggests that there are underlyingconsistencies in shopping behavior that

yield to mathematical analysis andprediction based on the notion or concept of

gravity)


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uff7s 8ravit! 9odel

Based on the premise that theprobability that a given customer 3ill

shop in a particular store

or shopping center becomes larger asthe si6eof store or center gro3s and distance

or

travel time from customer shrin*s


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uff7s Law

&ssumptions:

he proportion of consumers patroni6ing a givenshopping area varies 3ith the distance from theshopping area

he proportion of consumers patroni6ing various

shopping areas varies 3ith the breadth and depthof merchandise o!ered by each shopping area

he distance that consumers travel to variousshopping areas varies for di!erent types of

products purchased he 7pull8 of any given shopping area is in9uenced

by the pro5imity of competing shopping areas


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tripsshoppingofkinds

differentontimetravelofeffectthereflectsthatoexponent tAn

center shoppingpoint tostartingscustomer'fromdistanceortimeTravel

centershoppingofSize

centershoppingparticular

atotravelingoriginofpointgivenaatcustomeraofyProbabilit

Where

ijTb

ijT

jj S

j

iijP

n

1j

bijTjS

bijTjSijP

=

=

=

=

=

=

nS number of stores includingj


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Reill!7s Law of Retail 8ravitation

1hen two cities compete for retail trade areafrom the immediate suburban area! the breakingpoint for the attraction of such trade will be moreor less in direct proportion to the population of

the two cities and in inverse proportion to thesquare of the distance from the immediate areaof the city


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9athematical 'ormula

Ba/Bb; < "a/"b; Da / Db;,

Ba 4 business dra3n by city afromimmediate place

Bb = business dra3n by city bfromimmediate place

"a 4 population of city a

"b 4 population of city b

Da 4 distance of city a from immediate place Db = distance of city bfrom immediate place


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Saturation theory

#5amines ho3 the demand for goodsand services of a potential trading

area is being served by current retail

establishments in comparison 3ithother potential mar*ets)


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Inde% of retail saturation &IRS'

IR% is the ratio of demand for a producthouseholds in the geographic area

multiplied by annual retail

e5penditures for a particular line oftrade per household; divided byavailable supply the s>uare footageof retail facilities of a particular line

of trade in a geographic area;)

Inde% of Retail Saturation


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Inde% of Retail Saturation&IRS'

IR% < 1 ? R#;/R@

Ahere

IR%= is the inde5 of retail saturation1 =is the number of households in the areaR#= is the annual retail e5penditures for aparticular line of trade per household in thearea

R@= is the s>uare footage of retail facilities of aparticular line of trade in the area includings>uare footage of the proposed store;


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Implications

It is calculated based on e5isting retailfacilities and their use

Lo3 level saturation is indicated byhigher IR% 4 3hich means the li*elihood

of success is higher If the mar*et is having too fe3 stores

and unable to satisfy the demands of thecustomers the mar*et is under stored

If there is too many stores the mar*et isover stored unable to give fair return oninvestments to the retailer


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erfindahl erschman Inde;

It is a measure of mar*et concentration

he 1er+ndahl inde5 1I; is a measure ofindustry concentration e>ual to the sum ofthe s>uared mar*et shares of the +rms in

the industry N

11I ual share the reciprocal ofthe inde5 sho3s the number of +rms in the

industry) Ahen +rms have une>ual sharesthe reciprocal of the inde5 indicates theFe>uivalentF number of +rms in the industry)

(

d &(P '


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(uying po$er inde% &(PI'(uying po$er inde% &(PI'

It is an indicator of a mar*et2soverall retail potential and iscomposed of the 3eighted

measures of e!ective buyingincome personal incomeincluding all nonta5 payments

such as social security minus allta5es; retail sales andpopulation si6e

B i P I d (BPI)


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Buying Power Index (BPI)Buying Power Index (BPI)

"ublished annually inDemographics USA

Measures a given mar*et2s ability to buy

Is e5pressed as a percentage of the total G)%)

potential


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+I+I

B"I < )Hthe area2s percentage of acountry2s e!ective buying income;

)-the area2s percentage of a

country2s retail sales;

),the area2s percentage of a

Country2s population;


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#(S) Ratings#(S) Ratings

CB%& Current Jear #stimate: Buying "o3er Inde5 B"I; ,

CB%& B"I Ran*

Ne3 Jor* et al NJ=NK="& )- (

Los &ngeles=Long Beach=%anta &na C& )--E ,

Chicago=Naperville=Koliet IL=IN=AI Metro -),- -Aashington=&rlington=&le5andria

DC=&=MD=A Metro ,),-( "hiladelphia=Camden=Ailmington

"&=NK=D#=MD Metro ,)E(( H

otal of all &reas O)O"ercent $f G% O)O-H-

G% otal (

-SA -urrent =ear


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?

CBSA $ Rank

New York et al, NY-NJ-PA Metro 473,44,!!",###

$o% Angele%-$ong Bea&'-anta

Ana, A Metro *+4,47",3*,"## *

'i&ago-Naerille-Joliet, I$-IN-.I

Metro */,*77,7"#,### 3

.a%'ington-Arlington-Alexandria,

0-1A-M0-.1 Metro /+,3+*,**",### 4

0alla%-2ort .ort'-Arlington, Metro 43,+,4*,"## "

Total of all AreasI!353!I83!R7!888

ercent f H" R7.3744

-SA -urrent =ear


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-SA -urrent =ear ?+opulation *>>?

CBSA POPULATION RANK

New York et al, NY-NJ-PA

Metro+,+7#,#3+

$o% Angele%-$ong Bea&'-

anta Ana, A Metro3,**3,43* *

'i&ago-Naerille-Joliet,I$-IN-.I Metro

!,/#*,77 3

0alla%-2ort .ort'-

Arlington, Metro/,34+,+*/ 4

P'iladel'ia-a5den-

.il5ington, PA-NJ-06-M0

Metro

",+"*,//! "

Total of all Areas 4=!4R!847ercent f H" R5.IR6


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'ive =ear


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9ethods ) 9odels

Chec*=list method

&nalogue method

Location &llocation

Regression modelling 0ravity modelling


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-hec5 list method


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Analo" method


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Re"ression models


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Location Allocation model


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8ravit! 9odel


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roduct and merchandising management is key activityin the management of retail business.

The primary function of the retailing is to sell

>erchandise.

ne of the most strategic aspects of the retail businessis to decide the merchandise mix and quantity to bepurchased .

>erchandising can be termed as the planning! buyingand the selling of merchandising .

*erchandising,*erchandising,

(asis of retail merchandising(asis of retail merchandising,,


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?e%ne >erchandising as BThe analysis! planning!acquisition! handling and control of merchandise

investments of a retail operation.C

>erchandising is the core of retailing.

The function of merchandising is an integral partof retailing and also one of the most challengingfunctions.

A>A de%ne BThe planning involved in marketingthe right merchandise at the right place at theright time in the right quantities at the right price.C


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Achieving these +ve Right is the key to successfulmerchandising and many a times! this remains an elusive goal for

most retailers.

>erchandising management can be termed as 7"lanninganalysis ac>uisition handling and control of themerchandise8

Analysis0because retailers must be able to correctlyid tif th i t b f th t i


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identify their customers before they can ascertainconsumer desires and their needsFrequirements formaking a good buying decision.

Planningis important because merchandise to be sold inthe future must be bought now.

Acquisitionsbecause the merchandise needs to be

procured from others! either distributors ormanufactures.

Handlinginvolves seeing that the merchandise is whereit is needed and in the proper condition to be sold.

Controlis required since the function of merchandiseinvolves spending money for acquiring products it isnecessary to control the amount of money spent onbuying


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'actors'actors Affectin"Affectin"the 9erchandisin" 'unctionthe 9erchandisin" 'unction

>erchandising does not function in isolation. *t is a)ected by various factors like the organi+ation

structure! the si+e of the retail organi+ation and themerchandise to be carried.

Darely are any two stores organi+ed in the same way.

The function of the merchandising is vary from oneorgani+ation to another.

Size0 The needs of the individual retailers vary fromthose of large chain store operation.


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Size of organisationMerchan

dis

etoeca

rried

OrganisationStr!ct!re

T"#esofstore

Merchandising f!nction


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The merchandiser to be carried by a retailer largelydetermines the responsibilities of the merchandiser.

Merchandise to be carried:The buying for basicmerchandise is fairly di)erent from buying fashionmerchandise.

A merchandisers who * handling fashion products will

need to spend more time in the market! and looking forthe products which is more suitable for the customers.

Organization structure that the retail organi+ation

adopts also a)ects the merchandising function. "omeorgani+ation may di)erentiate the role of the buyerand the role of a merchandisers separately.

h h l l


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The *erchandises Role " Responsi+ilitiesThe *erchandises Role " Responsi+ilities

Planning: Thought the merchandising may not bedirectly involved in the actual purchase ofmerchandise.

They formulate the policies for the areas in which theyare responsible.

Eorecasting sale for the forth coming budget periodand can estimate the consumer demand and theimpact of changes in the retail environment.

?irecting0 uiding and training buyers as and whenthe need arises! is also a function of the merchandiser.

The buyers have to be guided to take additionalmarkdowns for products which may not be doing toowell in the stores.


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&o@ordinating0 >erchandise managers supervise the work ofmore than one buyer.

They need to coordinate the buying e)ort in terms of how well it

%ts in with the store image and with the other products beingbought by other buyers.

&ontrolling0 assessing the buyers performance ! is a also part ofthe merchandise manager$s :ob.

This includes evaluated on the basis of net sale! maintain mark uppercentage! gross margin Q and stock turn


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Role of the u!erRole of the u!er


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Retail Store esign " isual *erchandisingRetail Store esign " isual *erchandising

"tore design and layout tells a customer what thestore is all about and it is very strong tool in thehands of the retailer for communicating and creatingthe image of the store in the mind of the customers.

The design and layout of the store are a means ofcommunicating the image of the retail store.

The environment which is creates in the retail store!

is a combination of the exterior look of the store! thestore interiors! the atmosphere in the store and theevents! promotions and the themes.


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The overall look of a store and the series of mental pictures andfeelings it evokes within the beholder.

Eor the retailer! developing a powerful image provides theopportunity to embody a single message! stand out from the

competition and be remembered.


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0


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isual merchandisingisual merchandising

Can be ter!ed as the orderly" syste!atic" logicaland intelligent #ay o$ putting stoc% on the &oor

/> is the art of presentation! which puts the merchandise infocus. *t educates the customers! creates desire and %nally

augments the selling process.


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*-T.S F ISPL)0S

&olor ?ominance

&o@ordinated resentation

resentation by price

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