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Retail location
The document discusses various retail location strategies and types. It identifies location as one of the most important factors in retailing. It describes the advantages and disadvantages of different location types including free standing sites, shopping centers, malls, and other alternatives. Key considerations for retailers in selecting locations involve tradeoffs between factors like rent, traffic, size of customer base, and restrictions. Matching a location type to a retailer's strategy is important.
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Retail location
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- 2. 7-2 Elements in RetailMix Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design Location Strategy
- 3. 7-3 What Are the ThreeMost Important Things in Retailing? Eddie Tan/Life File/Getty Images Location! Location! Location!
- 4. 7-4 Why is StoreLocation Important for a Retailer? ■ Location is typically prime consideration in customer’s store choice. ■ Location decisions have strategic importance because they can help to develop sustainable competitive advantage. ■ Location decisions are risky: invest or lease? F. Schussler/PhotoLink/Getty Images
- 5. 7-5 Types of RetailLocations ■ Free Standing Sites ■ City or Town Locations Inner City Main Street ■ Shopping Centers Strip Shopping Centers Shopping Malls ■ Other Location Opportunities
- 6. 7-6 Selecting a particularlocation type Involves evaluating a series of trade-offs between ■ The size of the trade area (geographic area encompassing most of the customers who would patronize a specific retail site) ■ The occupancy cost of the location ■ The pedestrian and vehicle customer traffic ■ The restrictions placed on store operations by the property manager ■ The convenience of the location for customers
- 7. 7-7 Tradeoff Between Locations Rent Traffic Thereare relative advantages and disadvantages to consider with each location.
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- 9. 7-9 Unplanned Retail Locations ■Freestanding Sites – location for individual store unconnected to other retailer ■ Advantages: Convenience High traffic and visibility Modest occupancy cost Separation from competition Few restrictions ■ Disadvantages: No foot traffic No drawing power The McGraw-Hill Companies, Inc./Andrew Resek, photographer JCPenney, Sears, Walgreens are shifting to stand alone locations
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- 11. 7-11 Unplanned Retail Locations MerchandiseKiosks – small temporary selling stations located in walkways of enclosed malls, airports, train stations or office building lobbies. Kent Knudson/PhotoLink/Getty Images
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- 13. 7-13 City or TownLocations Gentrification is bringing population back to the cities. The McGraw-Hill Companies, Inc./Andrew Resek, photographer Advantage to Retailers: •Affluence returned •Young professionals •Returned empty-nesters •Incentives to move provided by cities •Jobs! •Low occupancy costs •High pedestrian traffic
- 14. 7-14 Central Business District(CBD) ■ Draws people into areas during business hours ■ Hub for public transportation ■ Pedestrian traffic ■ Residents ■ High security required ■ Shoplifting ■ Parking is poor ■ Evenings and weekends are slow AdvantagesDisadvantages Spike Mafford/Getty Images
- 15. 7-15 Main Streets vs.CBDs ■ Occupancy costs lower than CBDs ■ They don’t attract as many people ■ There are not as many stores ■ Smaller selections offered ■ Not as much entertainment ■ Some planners restrict store operations
- 16. 7-16 Inner City Inner cityretailers achieve high sales volume, higher margins and higher profits Unmet demand tops 25% in many inner city markets Inner city customer wants branded merchandise
- 17. 7-17 Shopping Centers Shopping CenterManagement Controls: •Parking •Security •Parking lot lighting •Outdoor signage •Advertising •Special events for customers The McGraw-Hill Companies, Inc./Andrew Resek, photographer
- 18. 7-18 Types of ShoppingCenters ■ Neighborhood and Community Centers (Strip Centers) ■ Power Centers ■ Enclosed Malls ■ Lifestyle Centers ■ Fashion Specialty Centers ■ Outlet Centers
- 19. 7-19 Neighborhood and CommunityCenters Attached row of stores Managed as a unit Onsite parking TheMcGraw-HillCompanies,Inc./AndrewResek,photographer Advantages Convenient locations Easy parking Low occupancy costs Disadvantages Limited trade area Lack of entertainment No protection from weather
- 20. 7-20 Power Centers Shopping centersthat consist primarily of collections of big-box retail stores such as discount stores (Target), off-price stores (Marshall’s), warehouse clubs (Costco), and category specialists (Lowe’s, Best Buy, Dick’s) ■ Open air set up ■ Free-standing anchors ■ Limited small specialty stores ■ Many located near enclosed malls ■ Low occupancy costs ■ Convenient ■ Modest vehicular and pedestrian traffic ■ Convenient ■ Modest vehicular and pedestrian traffic ■ Large trade areas PhotoLink/GettyImages
- 21. Mondeal Retail ParkAhmedabad 7-21
- 22. 7-22 Shopping Malls ■ Regionalshopping malls (less than 1 million square feet) ■ Super regional malls (more than 1 million square feet) The South China Mall in Dongguan, China
- 23. Top 10-World 1.New SouthChina Mall, Dongguan, China – 659,612 square meters 2. Golden Resources Mall, Beijing, China – 557,419 square meters 3. SM City North EDSA, Quezon City, Philippines – 482,878 square meters 4. Isfahan City Center, Isfahan, Iran – 470,000 square meters 5. 1 Utama, Selangor, Malaysia – 465,000 square meters 7-23
- 24. Top 10-World 6. PersianGulf Complex, Shiraz, Iran – 450,000 square meters 7. Central World, Bangkok, Thailand – 429,500 square meters 8. Mid Valley Megamall, Kuala Lumpur, Malaysia – 420,000 square meters 9. Cehavir Mall, Istanbul, Turkey – 420,000 square meters 10. Sunway Pyramid, Subang Jaya, Malaysia – 396,000 square meters 7-24
- 25. Top 5 -India 1.DLF Noida, 20 lakh sq ft 2.Lulu Mall Kochi, 17 lakh sq ft 3.Ambience mall Gurgaon, 16 lakh sq ft 4.Phoenix market city, Mumbai, 10 lakh 5.Mantri Square Bangalore, 8.9 lakh sq ft 7-25
- 26. 7-26 Advantages and Disadvantagesof Shopping Malls Advantages: Many different types of stores Many different assortments available Attracts many shoppers Main Street for today’s shoppers Never worry about the weather Comfortable surrounding to shop Uniform hours of operation Disadvantages: Occupancy costs are high Tenants may not like mall management control of operations Competition can be intense PhotoLink/GettyImages
- 27. 7-27 Challenge to Malls ■Time pressured society makes it impractical to wander malls ■ Fashion apparel sold in malls experiencing limited growth ■ Malls are getting old and rundown – unappealing to shop ■ Anchor tenants are decreasing due to retail consolidation ■ Strategies? Make shopping more enjoyable (e.g., sofas, children’s playing areas) Great food destination (fast food and full-service restaurants) Tailor make its offering to cater to changing demographics Mall renovation and redevelopment
- 28. 7-28 Lifestyle Centers Photo providedby ICSC and used with permission of Aspen Grove Lifestyle Center Attractive to specialty retailers
- 29. 7-29 Lifestyle Centers ■ Usuallylocated in affluent residential neighborhoods ■ Includes 50K sq. ft. of upscale chain specialty stores ■ Open-air configuration ■ Design ambience and amenities ■ Upscale stores ■ Restaurants and often a cinema or other entertainment ■ Small department store format may be there
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- 31. 7-31 Fashion /Specialty Centers ■Upscale apparel shops ■ Tourist areas/central business districts ■ Need not to be anchored ■ Décor is elegant ■ High occupancy costs ■ Large trade area ■ Ex. Phipps Plaza in Atlanta TheMcGraw-HillCompanies,Inc./LarsA.Niki,photographer
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- 33. 7-33 Outlet Centers These shoppingcenters contain mostly manufacturers and retail outlet stores Factory Outlets Courtesy of Beall’s, Inc.
- 34. 7-34 Theme/Festival Centers ■ Locatedin places of historic interests or for tourists ■ Anchored by restaurants and entertainment facilities
- 35. Quincy market inBoston 7-35
- 36. 7-36 Larger, Multi-format Developments: Omnicenters ■Combines enclosed malls, lifestyle center, and power centers ■ Larger developments are targeted to generate more pedestrian traffic and longer shopping trips To capture cross-shopping consumers
- 37. 7-37 Mixed Use Developments(MXDs) ■ Combine several different uses into one complex, including shopping centers, office tours, hotels, residential complexes, civic centers, and convention centers. ■ Offer an all-inclusive environment so that consumers can work, live, and play in a proximal area
- 38. 7-38 Other Location Opportunities ■Airports ■ Resorts ■ Store within a Store ■ Temporary or pop-up stores
- 39. 7-39 Alternative Locations Airports Airports: Whywait with nothing to do? Rents are 20% higher than malls Sales/square ft are 3-4 times higher than malls Best airports are ones with many connecting flights KimSteele/GettyImages
- 40. 7-40 Alternative Locations Resorts Captive audience Well-to-docustomer Customers have time to shop Royalty-Free/CORBIS
- 41. 7-41 ■ Located withinother, larger stores ■ Examples: Grocery store with service providers (coffee bars, banks, clinics, video outlets) Sephora in JCPenney Alternative Locations Store within a Store
- 42. 7-42 Alternative Locations Hospitals Patients cannotleave Gifts are available Royalty-Free/CORBIS
- 43. 7-43 Matching Location toRetail Strategy The selection of a location type must reinforce the retailer’s strategy be consistent with the shopping behavior size of the target market The retailer’s position in its target market ■ Department Stores Regional Mall ■ Specialty Apparel Central Business District, Regional malls ■ Category Specialists Power Centers, Free Standing ■ Grocery Stores Strip Shopping Centers ■ Drug Stores Stand Alone