Unit IV Retail Locations
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Transcript of 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