The document discusses the importance of location in retailing. Location is the prime consideration for customers and a strategic decision for competitive advantage, though it involves substantial investment and risk. There are three basic types of locations: free standing, city/town business districts, and shopping centres. Evaluation criteria for locations include trade area size, occupancy costs, traffic, and restrictions. Unplanned areas include free standing stores and urban locations, while shopping centres range from neighbourhood centres to enclosed malls to lifestyle centres. The type of location chosen must reinforce the retailer's strategy and target market's shopping behavior.

1. Retail Locations

2. What are the three most important
things in retailing?
Location
Location
Location

3. 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

4. TYPES OF LOCATIONS

5. Three basic types
• Free standing
• City/town business district
• Shopping centre
• non traditional forms: airport/within another
store

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. LOCATION AND RETAIL STRATEGY

16. 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.

17. 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

18. 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

19. 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

20. 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

21. 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

22. Uniqueness of retail offering
• Unique differentiated offering .
• Customers will travel wherever the store is
located and the location - destination

23. 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