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Retail Locations: Sources - Berman-Evans, Sinha-Uniyal, Secondary Research, Prof - Ranjan Chaudhuri's Inputs

The document discusses different types of retail locations including isolated stores, unplanned business districts, and planned shopping centers. It outlines the advantages and disadvantages of each location type and factors retailers consider when evaluating potential store sites like traffic, competition, and strategic fit.

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414 views

Retail Locations: Sources - Berman-Evans, Sinha-Uniyal, Secondary Research, Prof - Ranjan Chaudhuri's Inputs

The document discusses different types of retail locations including isolated stores, unplanned business districts, and planned shopping centers. It outlines the advantages and disadvantages of each location type and factors retailers consider when evaluating potential store sites like traffic, competition, and strategic fit.

Uploaded by

garimadhamija02
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Retail Locations

Sources Berman-Evans, Sinha-Uniyal, Secondary Research,


. Ranjan Chaudhuris Inputs

Objectives

To thoroughly examine the types of locations


available to a retailer: isolated store,
unplanned business district, and planned
shopping center

To understand the relative advantages of


each of these locations

To note the decisions necessary in choosing a


general retail location
To understand why are some locations
particularly well suited to specific retail
strategies?

The Importance of Store


Location
- Store location is most often the
first consideration in a store
choice
- Having a good location
increases chances of
developing a strong
sustainable competitive
advantage
- Location decisions can be risky
and should be well-thought out

Factors Affecting Selection of a


Store Site

Strategic Fit with Target


Market
Competition
Cost of Operating Stores

3 Types of Locations

Isolated Stores
Large-store
formats
Wal-Mart
Costco
Convenience
stores
7-Eleven

Freestanding/Isolated
Advantages
*
*
*
*

*
*

No
competition
Low rental
costs
Flexibility
Good for
convenience
stores
Better
visibility
Adaptable

Disadvantages
*

*
*
*
*
*

Difficulty
attracting
customers
Travel distance
Lack of variety
for customers
High advertising
expenses
No cost sharing
Restrictive
zoning laws

Unplanned Business Districts

Central Business
District

Neighborhood
Business
District

Secondary
Business
District

String
District

Unplanned Business Districts and Isolated


Locations

CBD Downtown Advantages

Assortment
Public Transportation
Store Types in Area
Price Ranges
Pedestrian Traffic

CBD - Disadvantages

Parking
Congestion
Travel Time
Aging Facilities
Condition of District
Rent

Planned Shopping Centers


Disadvantages
* Limited flexibility
Advantages
* Well-rounded
* Higher rent
* Restrictions on
assortments
offerings
* Strong suburban
* Competitive
population
environment
* One-stop, family
* Requirements for
shopping
association
* Cost sharing
memberships
* Transportation
* Too many malls
access
* Domination by
* Pedestrian traffic
anchor stores

Characteristics of Regional Centers


Features
Total site area
Total sq. ft. leased
Principal tenant
Number of stores
Minimum # of people in
trading area
Driving time of trading
area
Location

Regional Center
30-100+
400,001-2,000,000+
1, 2 or more department
stores
50-100
100,000+
Up to 30 minutes
Outside central city on
highway

Characteristics of Community
Centers
Features
Total site area
Total sq. ft. leased
Principal tenant
Number of stores
Minimum # of people in
trading area
Driving time of trading
area
Location

Community Center
10-30
100,000-400,000
Branch department store
15-25
20,000-100,000
Up to 20 minutes
Close to residential
areas

Characteristics of Neighbourhood
Centers

India - Shopping
Malls
Advantages

Wide variety of stores

Wide assortment of
merchandise

Shopping and entertainment

No inclement weather

Uniform hours of operation

Attracts many shoppers

Disadvantages

Occupancy costs are


generally higher

Mall control over business


operations

Competition can be intense

Trends and Developments

Enhancing the Mall


Experience
Mall managers try to make malls more of an enjoyable experience in an
effort to keep people shopping as long as possible

Common areas

Family lounges

Great food

Playgrounds

Entertainment

Fashion/Specialty
Centers
Composed mainly of upscale apparel shops, boutiques, and gift shops carrying
selected fashions or unique merchandise of high quality and price

Stores in Emporio
Mall

Botega

Gucci

Jimmy Choo

Zegna

Outlet Centers
Shopping centers that contain mostly manufacturers
outlets

- Strong entertainment component


- Becoming more popular outside
the United States
- Tourism is important for outlet
centers

Las Vegas Outlet


Center

Theme/Festival centers
Shopping centers that typically employ a unifying theme reflected in the individual
shops,
shops, design,
design, and
and to
to some
some extent
extent their
their merchandise
merchandise

Located in places of historic


interests or for tourists

Anchored by restaurants and


entertainment facilities

Generally targeted at tourists,


they may also attract local
customers

A common element of these


centers is entertainment,
although some rely solely on
the shopping experience

Ibn Battuta Mall, Dubai

Site Selection and McDonalds

Now, Think and Write

McDonalds in India has a multi location strategy.


Basis your learning in todays session, mention a
the locations that McDonalds in India is in and
discuss advantages and disadvantages of each.

Evaluating a Site for Locating a


Retail Store

n evaluating and selecting a specific site, retailers consider:

ation characteristics
Restrictions
ffic
estimated potential sales
mpetition
ategic Fit
erating Costs

Site Characteristics

Traffic Flow and


Accessibility
When traffic is greater, more
customers shop
Good for convenience retailers
Not necessary for destination
retailers
Too much can impede access
to store
Accessibility to store is as
important as traffic flow
PhotoLink/Getty Images

Traffic Flow and


Accessibility
Road pattern and

condition
Natural and artificial
barriers
Visibility
Traffic flow
Parking
Congestion
McGraw-Hill Companies/Jill Braaten, photographer

What Should Retailers Consider regarding


Parking?
Observe shopping center at various times
Employee parking availability
Shoppers that use cars
Parking by non-shoppers
Typical length of a shopping trip

The McGraw-Hill Companies, Inc./Andrew Resek, photographer

Adjacent Tenants

Complementary (also competing)


adjacent retailers build traffic
What other retailers would Big Bazaar
want to be located near?

Star Bazaar, Apna Bazaar, Spencers?


All target price-sensitive consumers

In an enclosed mall, what retailers would


Lifestyle want to be located near?

Westside, Shoppers Stop?

Locations within a Shopping


Center

Affects both sales and occupancy costs


In a strip shopping center closest to the
supermarket for impulse buying
In a enclosed shopping mall retailers who
sell comparison shopping goods locate close
to the department store anchors
Locate stores that appeal to similar target
markets because consumers shop at places
with a good assortment of merchandise

Cities like Ahmedabad and Pune have


approximately 50% of their income as
surplus after household expenses.
They have large populations, and
combined with the surpluses, this
forms a massive economic
opportunity.

Competition
8-40

ome retailers are going rural:

ack of competition
igher level of disposable income
arge, untapped labor force

The McGraw-Hill Companies, Inc./John Flournoy, photographer

Strategic Fit

Demographic, lifestyle profile, size and


composition of households in an area

Royalty-Free/CORBIS

McDonalds families with kids

REI outdoor enthusiasts


The McGraw-Hill Companies, Inc./John Flournoy,
photographer

Fashion apparels as a
must-have amenity in
luxury condominium
towers in Mumbai

Operating Costs
Vary across areas
Affected by proximity of
area considered vs.
other areas
where retailer operates
Local and state legal
environment has effect

Terms of Occupancy - Some


Considerations

Ownership versus Leasing


Type of Lease
Operations and Maintenance
Costs
Taxes
Zoning Restrictions

Trade area characteristics

A contiguous geographic area that


accounts for the majority of a stores
sales and customers

Primary zone
60

Secondary zone
20

to 65 percent of its customers


percent of a stores sales

Tertiary zone
customers

who occasionally shop at the store


or shopping center

Indices for Assessing Sales


Potential

Market Potential Index (MPI)

Number of Households Purchasing a


Product or Service in a Trade Area

Spending Potential Index (SPI)

Average Amount Spent on a Product or


Service by a Household in a Trade Area

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