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Retail locations
 

Retail locations

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    Retail locations Retail locations Presentation Transcript

    • Retail Locations
    • What are the three most important things in retailing? Location Location Location
    • Importance • Location- prime consideration in customers store choice decision Eg car garage, supermarket • location- strategic decision- competitive advantage • risky decision- retailer needs to put substantial investment to buy and develop the real estate • India- less space and costly
    • TYPES OF LOCATIONS
    • Three basic types • Free standing • City/town business district • Shopping centre • non traditional forms: airport/within another store
    • Evaluation criteria for a location • Size of trade area • occupancy cost of location • pedestrian and vehicular traffic • restrictions placed on store by property managers • convenience for customers
    • Types of locations Unplanned areas • Free standing • Urban locations/CBD Shopping centres • Neighbourhood and community shopping centres • Power centres • Enclosed malls • Lifestyle centres • Fashion/specialty counters • Outlet centres • Theme/festival centres
    • Unplanned retail locations Free standing sites • individual isolated store unconnected to other retailers • Might be near to other free standing retailers, a shopping centre. • Adv: convenience (easy access and parking),high vehicular traffic and customer visibility, modest occupancy costs, fewer restrictions on signs, merchandise. • Disadv: limited trade area, no multiple retailers to attract customers ,high maintenance costs – no other retailers for sharing. • Eg :Kohl- off mall store Merchandise kiosks • Small, temporary selling spaces typically located in the walkways of enclosed malls, airports,train stations, or office building lobbies • 40-500 sq feet, operate seasonally, short term leases. • For mall operators-kiosks generate rental income in vacant space and offer broad assortment of merchandise for visitors. • careful to avoid kiosks that block any store fronts, create an incompatible image, or compete directly with permanent tenants by selling similar merchandise • Eg Café coffee day, ferns and petals ,perfumes etc
    • City or Town locations Central Business District -CBD • Traditional downtown business area in a city or town. • Has large no people in that area during business hours • Hub for public transportation, high level of pedestrian traffic. • Large no of residents living in that area •Disadv: high security, limited parking, evening and weekends slow, lack of planning. Eg Church gate and Colaba, Fifth Avenue- NY Main street • Traditional shopping area of smaller towns, or secondary business district in a suburb or a larger district. • Occupancy costs are lower, fewer people in the area, fewer stores-low selection • Fewer entertainment and recreation options Inner city • High density urban area consisting of apartment buildings populated by primarily lower income consumers • inner city customers desire to buy merchandise from nationally recognized retailers in the neighborhood where they live • Higher sales volume-higher margins, resulting in higher profits
    • Shopping centers • A group of retail and other commercial establishments that is planned, developed, owned and managed as a single property. • Usually developer and shopping center management carefully select a set of retailers that are complementary to provide consumers with one stop shopping experience with well balanced assortment of merchandise • SC mgt maintains the common facilities – parking, security, lighting, outdoor signage for the centre, advt and special events to attract consumers • Stores within the centre pay a negotiated annual fee based on size to cover maintenance costs. • SC mgt may place restrictions on operating hours, signage and type of merchandise stored • Every SC has one or two major retailers known as Anchors. Anchors are wooed by the developer because they attract a significant no of consumers and are appealing to consumers and other retailers. • Anchors get special deals in terms of rent
    • Shopping centres Neighborhood and community shopping centres • Attached row of stores managed as a unit, with onsite parking in front • Common areas – not enclosed- open air centres • common layout: linear, L shaped, inverted U shaped. • Smaller centres- neighbourhood centres- anchored by supermarket/ drugstores • Larger centres- community centres – addl anchors- discount stores, off price stores,category specialists. • Adv: lower costs, customer convenience • Disadv: limited trade area,lack entertainment and recreation ,no protection from weather Power centres • Shopping centres that consist of primarily of collections of big box retail stores such as discount, off price, category specialists • Open air,include several other free standing anchors and other specialties
    • Shopping centres Shopping malls • Enclosed ,climate controlled, lighted shopping centres with retail stores on one or both sides of enclosed walkway. • Adv: broad merchandise, large customer traffic, large trade area, entertainment option, hangout options for teens. Weather protection, maintenance taken care of. • Disadv: high occupancy costs, mall management issues, intense competition within retailers. • Challenges: window shopping, time pressures- limited time for shopping, mall losing appeal Lifestyle centres • Shopping centres with open air configuration of upscale specialty stores, entertainment and restaurants • Located near affluent neighbourhoods and cater to lifestyle of consumers in their trade area • Eg Palladium
    • Shopping centres Fashion/Speciality centres • Composed of upscale apparel shops,boutiques and gift shops carrying fashion or unique merchandise of high quality and price. • Upscale dept stores, gourmet restaurants ,theatres can function as anchors. • Elegant rich décor and high quality landscaping. • Found in high trade areas with high income levels,in tourist areas,or in some CBDs • Trade areas and occupancy costs are high. • Eg Phipps Plaza- Atlanta – tiffany, Gucci Max Mara etc Outlet centres • Shopping centers that contain mostly mfg and retailers outlet stores including off price stores • Well designed buildings with landscaping, gardens food courts. entertainment . • located at some distance away from shopping centres so that mfg brands sold at discount prices will not compete. • Located in tourist areas. • Eg 1.2 million sq foot Factory Outlet Mega mall in Niagra falls – 15 million tourists
    • Other types • Theme/festival centres: unifying theme carried by the individual shops in design and merchandise • Mixed use development : combine several uses in one complex incl shopping centres, office towers, hotels,residential complexes,convention and civic centres. • Airports:high pedestrian area, bookstore ,gift store, costs are higher, workers inconvenienced, high wages. • Hospitals • Store within store
    • LOCATION AND RETAIL STRATEGY
    • Location and Retail Strategy • Type of location must reinforce the retail strategy • Location type decision- consistent with size of target market, shopping behavior, and retailers positioning in the target market.
    • Shopping behavior – target market • A critical factor- how consumers select a particular shopping location depends upon the shopping situation • Convenience shopping • Comparison shopping • Specialty shopping
    • Convenience shopping • Concern – to minimize the effort required to get the product/service they want • Indifferent towards: Retailer, brand and price • Eg:Coffee during work break • Don’t spend time in brand evaluation • Retailers – locate stores close to customers, offer easy parking, access and location • Located in the neighborhood
    • Comparison shopping • Have a general idea about the product/service they want, but no strong preference for a brand,retailer or a model. • Not brand/store loyal • Seek info, spend effort ,take time in making a purchase decision. • Competing shops present close to each other to increase consumer traffic • Eg Furniture,appliances,apparel
    • Specialty shopping • Consumers know what they want and don’t accept a substitute • Brand, retailer loyal and pay a premium /spend extra effort • Eg designer perfumes, clothing. • will travel extra to obtain that item • thus location- not important for retailers selling unique merchandise
    • Density of target market • Good location- close to target market • For eg convenience store- close to target customers- living /working • Not applicable for a premium retailer
    • Uniqueness of retail offering • Unique differentiated offering . • Customers will travel wherever the store is located and the location - destination
    • Legal considerations • Environmental issues: storage of hazardous material: Eg car garage – disposal of used motor oil and battery fluid • Signs: restrictions on use of signs can also affect location. • Licensing requirements: for alcohol