2. Retail Location
C onsum er C hoice.
The location is often the m ost im portant consum er behavior
consid eration in a custom er’s d ecision of the where to shop.
N eed for C om petitive Ad vantage.
The d ecision over where to d evelop a retail outlet will be of
strategic im portance because retailers can give long term
com petitive ad vantage if they d evelop in the best location.
C onsid eration of Trend s.
Any d ecision on location has to consid er the recent social and
structural changes-greater use of the m otor car, the im portance of
out of town shopping centers, regional shopping areas, the growth
of m ultiple retailer, the power of retailers brand , and so on.
3. H igh Investm ent.
D evelopm ent of a retail site is accom panied by high
investm ent and rental cost and long lead tim es, which
require d ecision regard ing long term financial
im plication.
Property Asset.
It is im portant to select carefully as the final property
assess of a com pany can be valued as high their
annual turn over.
D eclining N um ber of sites.
There are a restricted number of new sites for development and
within Government policy guidelines, less opportunity to obtain
planning permission easily.
4. Factors Affecting the Location Decisions
Search for Good location Site.
Assessment for viability of a specific site.
Understanding the impact of micro factors.
5. Search for Good location Site.
At the broad est level of retailers will be
involved in a search for good locations. i.e.
d ecisions related to which regions, cities or
town to set the location has to be taken.
M arketing help to work out the retail spend
potential, thereby provid ing a link to m inim um
threshold requirem ents. That is, it will be easy
for retailers to establish the lowest forecast
spend , thus m aking further investigations
worthwhile.
6. Items consider location Factor Determinants
Details of Actual Accessibility Competitors Issue Cost Factors
Potential Customers Factors
Number by Visibility of site. Amount and level of Building costs.
demographics competition
Earning through Pedestrian Flow Number of competition Rental costs.
incomes/employment and type of
by occupation, competition.
industry, trends,
purchasing power.
Pattern Spending Blockage or Barriers in Saturation Index Rates Payable
the form of railway
tracks, rivers etc
Demography in terms Types of location zones Proximity to Delivery cost.
of Population competitors, tenders,
market, and brands
leaders.
Life style trends Infrastructure such as Insurance cost.
road conditions and
network link.
7. Assessment of the Viability of Site
While assessing the viability it is also necessary to
focus on the type of custom ers, public transport
system , private ownership of cars, proxim ity to
com petitors, etc. com petitors outlets, m erchand ise
d isplayed by them , their pricing strategies etc m ay
give the retailers a run for his m oney.
This because especially in case of convenience good s
and shopping good s and shopping prod ucts to close
proxim ity to com peting retailers could encourage
custom ers to visit the all the outlets, m ake
com parisons and finally opt for the better retailer.
8. Understanding the impact of micro factors.
Now the retailers will have the to take a detailed look at the
impact of the other micro factors such as pedestrian flow, the
profit of local shops, proximity to other key retailers, turn over
at the outlets, facilities for parking vehicles, sites design and
overall appearance, future potential of location and so on.
Apart from considering the impact of micro-factors related to the
environment around the site, the retailer will have to study the
impact of micro factor to the site itself. That is the retailer will be
interested in analyzing certain factors such as- ease of access for
loading and unloading, the period and terms and condition of the
lease agreement or ownership condition and procedure if any
planning permission is to be obtained from the concerned
authorities.
9. Regional Analysis/Market Area
Analysis
A market area analysis of regional area
analysis and local area analysis. The retailer
must analyze regional differences across
domestic or international markets. After
selecting a particular region, the retailer has
to analyze one or more local markets within
that region.
After identifying some promising market
areas, the retailer should estimate their
sales potential so as to choose the market
area with the highest sales potential.
10. Factors affecting the attractiveness
of market areas and trade areas
Demographics.
Economics.
Cultural.
Demand.
Infrastructure.
11. Trading area analysis
Trading area analysis is defined as “a geographical
area containing the consumer of a particular firm or
group of firms for specific goods or services.”
Trading Area is the geographic area from which a
retailer, or group of retailers, or community draws
its customers.
Trading Area is also defined as “ A district the size of
which is usually determined by the boundaries
within which it is economical in terms of volume and
cost for a marketing unit or group to sell and or/
deliver a good or services.
12. Benefits of Trading Area Analysis
A demographic and socioeconomic characteristics of consumer can
be detailed based on government and other published data. For a
new store, the study of proposed training areas reveals market
opportunities and retail strategy necessary for success. For an
existing store, it can be determined if the current retail strategy
still matches the needs of consumers.
The focus of promotional activities can be determined. A retailer
finding that 95 percent of customers live within three miles of a
store would find it inefficient to advertise in newspapers with city
wide audience. To avoid this problems, the retailer could look at
media coverage patterns of proposed or existing locations.
It can be ascertained whether the location of a proposed branches
store will services new customers or take business from existing
stores in a chain or franchise.
13. Benefits of Trading Area Analysis
Discovery of consumer Assessment of effects of
demographics and trading area overlap
socioeconomic Ascertain whether chain’s
characteristics competitors will open
Opportunity to nearby
determine focus of Discovery of ideal number
promotional activities of outlets, geographic
Opportunity to view weaknesses
media coverage patterns Review of other issues,
such as transportation
14. Site Selection
Selection of a specific Site.
Factors Affecting the Attractiveness of site.
c) Pedestrian traffic.
d) Vehicular Traffic.
e) Parking Facility.
f) Transportation.
g) Store Composition.
h) Specific Site.
i) Terms of Occupancy
15. Planned Shopping Center
Planned business site is just what the name suggest, an area of
business that is planned. Generally each planned business site
or district is centrally managed and or owned. The key to
successful planned business district is a balanced tenant mix,
or tenancy, which allow the business district to offer the
complementary merchandise to the consumers.
Tenancy is based in part on population data from trading
area. In general planned business district are shopping center
developed to attract consumers from greater distance
16. Advantages of Planned Shopping
Center
Well rounded goods and service assortment based
on long range planning.
Strong suburban population.
Interest in one stop family shopping.
Cooperative planning and sharing of common cost.
Maximization of Pedestrian traffic.
Access to highways and availability of parking for
consumers.
More appealing than city shopping for some
people.
Creation of distinctive, but unified shopping centre.
17. Unplanned Shopping Centre
As we have seen, a large number of retailers
operate in planned shopping sites and in
freestanding sites. However, when making a
site selection decision, the retail site
selection specialist has a number of
unplanned shopping site for, which selects
as well.
Among the unplanned site are central
business district, secondary business district,
neighborhood business district, and
unplanned strip or string district.
18. L o c a t io n b a s e d R e t a il
S t r a t e g ie s
Departmental store.
Specialty Apparel Stores.
Category specialty.
Grocery Stores/Foods Stores.
Optical Boutique.
