d j a nR e t a i lR e v i e w

RetailHeadstart-

Choosing The Right Location_ Mnlhumita Mohanty

ABSTRACT
Indian organized retailing is witnessing a cosiderable momentum. It is evident from the entry of ledut
in consumers spending poDer
lomestic business houses arnd global retail giants in to this growing segment. The buoyancy
dome
billions in setttg up
and increastng aisposnble
income makes this
segment very lucrative. The conglomerates are investing
suit to their operations ana
back end and front end operations. The conglomerates are adopting different retail formats
the buzz organized retailing is still hovering in metros and tier 1 cities. Each conglomerare
ensure their reach. Howeoer, of norne of the
a unique retail fomat in order to position their entity and communicate to their target segment. Yet,
adopis metros and ter
could come out with the tested retail formats and decide on the potential locations beyond
comglomerates in the
cities. Hence, this paper aims addressing the issues related the strategic placement of appropriate
at to retailformats
immediate potential markets, categorization ofpotentia
potential markets. It also lhighlights the different retail formats,
markets and mapping of the retailformats to the respective markets.

Introduction Getting It Right

Retailer would have Before choosing a location the Retailer should

Any Retailer or aspiring consider the
needed to make a store
heard of the 3 critical elements
successful. These are
TargetExamine
Audience
your Target Audience. This is critical
1. Location
since distribution of potential customers in the
2. Location catchment area can make or break a store. Juxtaposing
3.and Location!
your store location with your living
to-be-customer's or

choosing
like a shopping area is half the battle won. For example, if the
Choosing a store location is store (like
location for your house. When a person decides to buy proposed store is a high-end Specialty
then it will be hard for the retailer
or build a house, he goes through several
decision Jewellry or Apparel),
to survive in a cost conscious area where the customers
variables. The same set comes in handy while choosing
are "bargain hunters". Luxury brand outlets typically
a Retail location. You can be the best Retailer in
the
are located in up market
addresses. Take the example of
World, but if you set your shop in the wrong location,
lessened International luxury brands which are housed in 5 Star
of a successful business are
Even Indian
dnces is like Hotels in Mumbai, Delhi and Bangalore.
COnsiderably. Starting off with the wrong location brands catering to the classes rather than masses always
nunning with your hands tied behind your back. look for premium high street
locations for housing their
collections.

DCM-- Store Operations &Strategy, Reliance Retail.

 Indian Retail Rev
Consider thecaseofa Café being located in the vicinity ofa school or college By the Ty naturc ofthe
Café is a
place where o
youngsters hangoutand is ameetingplace for collegiansaiter elass hour:. Walkintoanmata
day or Baristaoutlet
c in a Metroandthe sheer youthfulnessoftheambience and ihe crowd is sure to hit y o u o f e

h e diagram below depicts an ideal fictitious Café location in an area housing several educational lnet:
as well as the
city's IT park. stitutions
Figure 1

CHANDAKA
ULNFOCIUY INDUSTRIAL
ESTATE
CHANDAKAA
INDUSTRIAL
ESTATE

ORIENTAL UNION
BANK OF BANKOF
COMMERCE INDIA
MITS
SCHOOL OF

CHINA BIOTECHNOLOGY
BITTM PAVILI ON
LRESTAURANT
Proposed
Cafe
KOUSTAV SCHOOL OF CIPET
ENGINEERING
UDIPI
RESTAURANT

*
The landmarks above are not to scale .However; they are actual locations in the city of Bhubaneswar.

Locality-Commercial or Residential A variation of this is the

This will vary according to the format. A approach of "heavily
residential area would be more suitable for a freguented" area. These
interesting
are
openings,
supermarket, whereas a commercial area will be better literally. Retailers have experimented by opening stores
for inplaces, which need not be heavily 'populated' but
a
Departmental store. In the previous example of a
Specialty store, the format demands a location which is heavily 'frequented'. Clubs, office premises, temple
a
High street in a premium locality, preferably in the complexes, in colleges and institutions, airports,
main commercial hub of a city. Whereas, for a railway stations, etc. Remember the name A H Wheeler
grocery & Co? One has to
store, one has to look at a residential area that is heavily just go down to the ot campuses tne
populated, since the shopping requirement would be modern IT and ITES
for day-to-day needs. Hence the closer a store is to a companies to view
customer's residence, the more likely is to frequent it. the success of such
This will also take care of parking woes, which has been stores. Some eye-
the bane for manya Retailer. catching examples
are the Mysore
Heavily populated" could either mean having a campus of Infosys
or

lot of houses and apartments or having limited the Comesum

apartment complexes, which have large number of Concept in the
apartments. There have been cases where a railway stations or

supermarket has been very successful catering to a the Shankar's sernes

single large apartment complex (e.g. Fabmall store in of book stores at
the

"Mantri Paradise" Apartment complex in Bangalore).

airports.
In fact, many large
builders
are now making a provision
in their building plan for an "in-house"supermarket to Figure 2
cater to the residents. Comesum Café
at Railway Stations

68
IndianKelail R e v i e w

.Neighborhoodand Neighbors
is the case with
choosing a
residence,
it is a multi store
format, the retailer has to
neighbors
and neighborhooc too evaluate the distance between his
can make warehouse and
important
difference to ,a store s
suCcess.
an
proposed sites and look at the economics invoived in
to the presence of Neighbors transport of goods. if the distance is too large, an
herereter
share of market they
compctition, numbers, type otherwise
and the:
store tters too. if
already have. The format profilable iocation
reverse. This is
may just burn out to be the
ofthe retail one is
getting into a
particularly true for low
margins high
a
fo t like "mass apparet n an area
which has been
ttnover formats like
Supermarkets and Fresh produce
dhe focal shopping point of a city, the new entrant has stores.
to
have considerable ditterentiation than the
in rder to survive. Picturise a existing In case of a
single store format, the Retailer has to
players modern format
apparel:storecoming up in Sarojini Market in Delhi or check the feasibility of suppliers distributing goods to
the outlet
achion Street in Mumbai! Sarojini Market and Fashion regularly. If distances are large, most
suppliers will reduce frequency of supply and wait till
Street are a bargain hunter s paradise. In such a milieu,
order value reaches particular level. This can be quite
an haute couture brand will
a
certainly not only be out of detrimental to the retailer; there will either be stock-outs
place, but will not get many serious
from curious onlookers.
shoppers apart or high inventory levels.

Figure 3 The diagram below depicts a Central Warehouse

Shoppers Paradise - Fashion Street Mumbai servicing multiple stores (A, B, C) and multiple vendors
supplying to the Warehouse as well as stores directly.
Figure 4

re
A

Supplier Supplier

ARetailer needs to do his homework well before

launch of a new store. Any serious retail player has to do
a complete SWOT for its key competitors, which should
DC)
include the competitors' assortment strategy Store B Store C
Customers, key drivers, etc.

Pricing will be another critical factor especially if

aretailer is getting into an already crowded retail space Supplier
Which has many players operating in similar spaces. lf
one sets up a Fruit shop in close vicinity of a city's
Wholesale fruit market, the back-end sourcing has to be
t enough to match prices without a quality Availability and cost of labour
"Man or woman power" is a key differentiator in
Compromise. retail store. Before finalizing the location, one needs
any
Supply Chain and Logistics to check for easy availability
of labour. The Retail
attrition levels. The nature of the
Froximity to Supply source points is an
industry has high
imp business is such that people have to put in long working
POrtant factor while considering store location. 1his
also has an effect on the pricing strategy of hours and work in shifts.
Theretore, commuting
variable for front-end
merchandise. Transpo charges get incorporated into distance becomes a key
a

thetproduct costing thereby impacting the selling price

ot products.
employee, more so in Metros, where commuting is a

69
 Indian etail Review

time consuming and tedious affair. Having a store Whenever tinere 1s

Retail venture
a

location which has access to

large pool of
potenud
planned, the initiol phas: always is the most being
recruits is a smarter
way ofworking. phase involving locaiion ntification. Most ritical
Retailers would rather pusipone latnch ch
dates than asoned
Some Retailers have almost all the front end staff in with wrong locatioi choices as
tney understandrush
sourced from this is one of the most importani tactors for succec
particular nearby villages and put up in a
hostel-like good head start here gives you a long term advanta
arrangement. This is a win-win situation for
both. The Retailer is assured
of more loyalty and there- as they say "well begun is half done"! ntage,
by lesser attrition and the enmployee also feels taken care
of, and feels a strong sense of
and the store. belonging with each other Innovative Locations

Parking space In the fight for the right retail space,

retailers e
This is a
topic
of hot debate come up with innovative locations for their retail
There are amongst Retailers. offerings.
many Retailers with the view that
come for
willpeople
shopping irrespective of parking space. If
there is a lack of Mobile locations vis-à-vis Staticlocations
parking space, "home delivery" can be
considered as an Like the "Doodhwallas" of
that lack of
option. But one needs to remember yesteryears who used
parking space is a heavy deterrent for the to come (and still do at
places) with their wares to the
shopper. Remember the last time
you went
consumers' doorsteps, some
ingenious minds have
and
desperately hunted for a shopping carried this concept further.
finding one 500 meters
parking
space, ended up
away from the store and
struggled with carrying all the It is not uncommon to
yourself? This experience takes heavy bags "mobile"
to the
car see

away half the joy of opposite busy office complexes during lunchcaterers
hours.
shopping. One has to think from customer's a Office-goers are always on the look-out for quick,
standpoint to realize that ample parking space is not a
simple and cost-effective options for lunch. To cater
matter of debate, but this niche, some to
customer's shopping right!
a
ingenious
the adage of entrepreneurs have folowed
If a Retailer is putting up a "bringing the mountain to
Mohammad"
likelarge format store literally and set up "meals on wheels" i.e.
a
Hypermarket or Mall, then adequate parking space
a will be visible shops which
only during the lunch hours
becomes outside
non-negotiable hygiene factor. In cities
a
office complexes.
having multiple shopping malls,
of
parking becomes the availability and ease
decision to visit deciding factor in a
shopper's Similar concept has been
extended
a
particular Mall over the other cost selling low
apparel in mobile "Maruti Omnis". toThese
available options. sellers
pile up the garments in a Maruti van and come to select
shopping haunts at
particular times and display their
Property costs wares on the vanitself. Yet another
Every Retailer has to evaluate the cost/lease of "mobile library" concept. variation is the
the property
against the projected sales. Sometimes, in a
frenzy to grab the "best" place in town, Retailers
paying exorbitant prices to realize their end up Store-in-store
One of the
might make better sense at times to havefolly later. It
the "shop-in-shop"fall-outs
concept.of the
escalating real estate is
location but a "first rate"
a
"2 best"
property cost.
This is
In addition to the above
a
win-win arrangement where a iler
facade or frontage of the proposed Retail store has theconsiderations, Sitting on prime real estate Keta
shop area to a seller with leases out a small
given due importance. Visibility of a store tobe portion
main road acts as the best advertisement for the from the Sometimes, this is a
part
non-competing merchan
of the
lise.
store. stores where design of large ire
the
Retailer clearly demarcates for
Such arrangements for select spac like
Fragrances or color cosmet product categories
personal selling. etics which need in-de
In almost every large Departmenta
Depar
Indian
Retail Review

store, be it a Westside, I ifestyle or Shoppers' Stop, one

ake any "fain", either big ones like "Puhkar ntel tn
l d witness counteis seling cosmetics, frapgrances
would Kajasihan or smailer ones like th alaira i
other licstyte proiucis ke walches and
and
Cullack, a Tier il town in Orisa. Tere would be
Thes are
mostly a shop- in-shop
sunglasses. from baiioon
arrangement where the counters occipy space on enough nirepren urs seling anything
nd r e reams io CXotic holiday package 5ollers wait
ortain terms within the motherbrand outlets.
ert for these annual events to pui up their stalls selling
diflerent wares to customers who converge in large
Amongst the early piOneers was the RPGuhain of
numbers at these events. P'iushkar meta attracts 8-10 lakhs
Retail outlets which winessed a confluence of many to
devotees. Bali a much smailer fair still manages
Yatra,
shop-in-shop concepts, be it the Music world Express the 10 days of
attract about 3-4 lakhs of people during
counters inside the Supermarket Food world or the
the fair.
Color cosmetic counter like Revlon and Lakme within
Food world stores.
In-flight Retailing seemed
Shopping in mid-air what would have
-

High traffic hotspots
Airports are a natural draw for certain
merchandise like Books, Chocolates, Short-eats and Gift
items. The presences of cafes, gift shops, curio shops, etc
are the fall-out of retailers grabbing niche locational
advantages. Airport Retailing has not yet taken off in a
big way in India. However, all that is about to change
Shoppers Stop has recently signed a Joint venture with
The Nuance Group AG, to get into the duty free airport
like an insane proposal a few years back is a delightful
fliers would have either
reality today. Most frequent
purchased or seen someone making a purchase mid-air.
Air Deccan, Sahara, Jet Air have popularized In-flight
retailing through their auctions, bid & win programs
and off-price sales of select merchandise.
Other Retail "Hotspot" locations
Given the native ingenuity of the Indian mind, it

retailing arena starting with the Bangalore International
airport. This is sure to change the face of Airport
retailing in the country adding hitherto unseen
dimensions to the entire Retail scenario. Shoppers Stop
has already started a small outlet at Mumbai airport
selling some apparel, gift items, etc.
Stations unparalleled crowds in
Railway see
is only a matter of time before Retail formats spring up
in some of the following public places
.Beauty Parlors within large college campuses
or Ladies hostel.
Sports goods and apparelinside or opposite
Gyms.
Gift shops opposite large wedding halls.

India. Given the number of footfalls in any Railway
station in the country, it is ideal ground for a variety of
Retail formats to converge. What sets apart Indian
stations is the fact that it is not only the
Railway
passengers, but their friends and relatives who crowd
the area. For every traveller, there will be at least a
Couple others at the Station who have come to "see oft
their friend or relative. Imagine having a Supermarket
or Hypermarket to cater to this huge captive segment!
In fact, the railway ministry has held discussions
with some retail majors to explore the possibility
setting up agricultural hubs on unused railway yards
ana warehouses. The idea of these hubs will be to attract
armers from nearby areas to congregate for
Commercial purpose.
Consumer Durables near High rise apartment
complexes.
All the above formats are ideal to cater to the
target segment. Not only will the captive audience
concept hold forth, there would be higher inclination to
buy.
Building a successful Retail business is about
getting a lot of small things right most of the time. As
someone said fanmously "retail lies in the detail".
of Getting the location right is one of these details which
needs to be chosen with great care. A job well begun is
half done - this saying sums up the essence of the
Retail business.
importance of location in a

Occasion Retailing
Given the Indian penchant for celebrating
CCasions and festivals, it is not uncommon to find retail
PPortunities springing up in festive congregations.