Retail Location

Important due to-1-Prime consideration of customer’s store choice,

based on nearness to home/work, linked with other domestic work
2- strategic importance for sustainable competitive advantage.
Merchnadise,price, assortments can b changed but not location of a
store. competitors can’t easily copy as they r precluded from
locating there.3-entry of more and more co’s in organized retail
making difficult to find suitable location within budget,4-Forms an
important P of place for a long time for adequate assurance for a
success,5-It also influences the merchandise mix and interior layou
of store.6-even with emergence of web location of store form an
important step of retail strategy.
1-Location analysis - Factors affecting retail store location/site
selection –A-Macro level-based on research of cbb, 1) travel time to
reach store 2) parking space availability 3)nearness of
complimentary stores or even competitors store to attract more
customers, 4) investment to b made for site as it impacts return -.so
calculate catchments potential index. average transaction value
within a viable drive or walk time.5)delivery effectiveness in relation
to consumer perceptions and expectations,6)financing methods
available for purchasing or leasing, if interest rate is more then
entire cost –benefit analysis gets impacted.
• Location analysis cont-
• Besides above factors subjective judgment,assesment of
entrepreneur is also necessary. based on information
available as any delay in decision on site selection can b
costly mistake.
• 2-Trade area analysis- market area of any potential location
to b identified.
• Retail market is one where any group of individuals who
posses the ability, desire and willingness to buy retail goods
or services. Retail trade area is the one geographic area
within which retail customers reside or work. Customer
profile of a segment of the people with in such geographical
area necessary to serve thru store as target market
• MNC’s setting up stores in various countries start with
country analysis-comprising demographic analysis and
population characteristics, C’s age gender income education
family cahractorstics,occupation and many such variables
which r useful to select market segments which finally
becomes target markets for retailer
• Trade area analysis cont--
• Besides demographic factors- economic and infrastructural
,cultural and competitive environment prevailing trade area also
needs to b analyzed-
• Information to b gathered-1-land area,2-population,3-age
distribution,4-household size and type,6-marital status,7-family
size and type,8-owner occupied housing,9-rental status,10
religion,11-language spoken,12-schools, 13-income types, 14-
poverty status,15-departure time for work,16-occupation,17-
working women,18-,fertility rates,19-vehicles owners
20telephone subscribers 21- TV ownership.
• Above variables help location decision and also product line
potential e.g. toys shop location banana for children, economic
factor i.e. unemployment will affect purchasing power in that
area, per capita income data helps in projecting demands for
various merchandise. Economic stability of area can b
estimated from household incomes and expenditure patterns,
Buying power index and effective buying incomes r calculated
to arrive at fairly accurate analysis of trade area.
• Trade area analysis cont---
• Mathematical models based on geodemographics r
developed and being used in US for retail trade area
analysis.
• Everyone in trade area will not b potential customer.
Individuals with similar needs r identified to define target
market so that merchandise can b stocked accordingly.
• Retail mkt potential, retail sales potential and retail sales
forecast need to arrived from trade area analysis.RMP is
total sales value in rs of products or product lines from all
stores of particular retail trade area ,RSP is expected
sales volume in rs within trade area as part of RMP. and
RSF is expected sales volume.
• Major components to arrive at mkt potential-1- no of
potential customers in given area and 2- amount of
money C spend for products or product line
• Population statistics is also useful to arrive at mkt
potential as per capita or per household basis or per
family basis one can calculate potential of location
• 3-Location strategy -after location analysis and trade area
analysis site to b finalized based on 1-index of retail
saturation- It examines level of competition and retail sales
in a given geographical area to measure competitive
saturation( total square meter of retail space existing and
potential) 2-outshopping-people resort to go and shop out of
their traditional shopping area.3-infrastructure- better to
study access roads etc before finalizing location.,4-types of
location- choice from shopping centre or business district or
any other locality 5- rural and urban based on strategy and
prosperity of each area, 6-Temporary locations-exhibition
sites, festival sites.
• Above macro environment factors need to b considered of
retail location besides micro environment factors like store
ambience design, merchandising, personnels,store features,
visual merchandising etc to make the organized retail store
business successful
• Next-store layout. design, store display
 Types of locations
• Various options r to choose store locations as per target
audience and kind of merchandise to b sold e.g. convenience
store would not b suitable near expensive jewelry or fashion
store. few typical locations –Freestanding- isolated store,2-part
of business district,3- part of shopping center.
• 1-Isolated store or a free standing location.-usually along a
traffic artery without any competitive stores around, rents r low,
facilities -parking r ample Advertising for such locations stores r
high to draw customers for store visit. E.g. Stores +Petrol
pumps, hotels cum fast food on highways due to high cost of
travel and time place like Mumbai may not suit but based on
catchments areas and time one can spend for travel ,stores
proximity in sequence with grocery, cosmetics ,apparel
books ,music ,jewelry
• 2-Part of business district-A place of commerce . can b central,
secondary or a neighborhood, high peak land rates, intense
developments, good accessibility thru transport from all parts
,e.g. laxmi rd,cannought place,colaba etc,May not spend on
ads for drawing customers but rents r high and facilities parking
problem.
• Location cont-.secondary b d evolved with spread of
population with good mix of retailers, small stores with
adequate transport, neighborhood business district-
unplanned shopping area –super markets
• 3- part of shopping center-a group of retail and other
commercial establishments, planned ,developed, owned
and managed as a single property, ample parking
availability forms an important consideration for choice.,
it is a mall or strip center, mall is typically climate
controlled,walkaway provided between two strips of
stores in a mall. where as strip center –a row of stores
with parking in front of strip stores. as established in
west 8 basic types of shopping centers r defined-1-
neighborhood-for convinience,2-community- for general
merchandise convenience 3-,regional –G,M fashions etc,
4-super-larger of regional 5-fashon/speciality-high end
fashons,6-power-category dominant 7-theme based-
leisure, tourist oriented,8- outlet center-manufacturers
outlets.
 Steps involved in choosing location-
• 1-Identify the market in which to locate the store,2-evaluate the
demand and supply within that market, i.e. determine the
market potential,3-idntify the most attractive site, 4- select the
best site available.
• 1-market attractiveness to a retailer based on peculiarities of
each area of wants for products and services
• 2- market potential-based on a) demographics b)
characteristics of households in the area, c) competition and
compatibility with other stores, d) laws and regulations, e)-
trade area analysis
• Step 3 and 4-identify alternate sites and select one based on a)
traffic-pedestrian and vehicular, traffic suitable to kind of
products to b retailed, b) accessibility to market-thru public
transport, rail road connectivity, c) total no of stores and type of
stores exist, d) amenities available, e) buy/lease decision as per
options) Product mix offered- affects choice of location
• Make check lists for store location and site visit reports-see
draft.
• Trends- in retail property developments e.g. gorgon, .a ,b ,c, d,
towns analysis available