RETAIL MANAGEMENT

Retail Store & Location

Retail Locations

Types of Retail Location.

Step involved in choosing a Retail Location.

Introduction Define Store: “A store is place , real or virtual , where the

shoppers comes to buy goods & services. The sales transaction occurs at this junction.”

The location of retail store has for along time been considered the most important ‘P’ in retailing.

Locating the retail store in the right place was considered to be adequate for success.

Location becomes a critical decision for a retailer for several reasons. As like;

Location is generally one of the most important factors customers consider while choosing a store.

A bad location may cause a retailer to fail even if its strategic mix is excellent.. On the other hand , a good location may help a retailer succeed even if its strategic mix is mediocre.

Store location is least flexible element of retailer’s strategic mix due to its fixed nature, the amount of investment, and the length of lease agreements

Types of retail locationVarious option are available to the retailer for

choosing the location of store.

The choice of the location of the store depends on the target audience and the kind of merchandise to be sold.

A retailer has to choosing among alternate types of retail locations available . It may locate in an isolated place and pull the customer to the store on its own strength, such as a small grocery store or paan shop in a colony which attracts the customers staying close by

Typically a store location may be:

1. Freestanding /Isolated store.

2. Part of Business District/Centers (unplanned Business Districts).

3. Part of a Shopping Center (Planned Shopping Centers)

Freestanding /Isolated storeWhere there are no other outlets in the vicinity of the

store and therefore store depends on its own pulling power and promotion to attracts customers.

A biggest advantages for freestanding stores is that there is no competition around.

This type of location has several advantages including no competition, low rent, often better visibility from the road, easy parking and lower property .

Neighborhood Stores; colony shops serves small locality.Highway Stores :Ebony store in Ludhiana .

Business Associated Location: These are location where a group of retail outlets offering a variety of merchandise work together to attract customers to their retail area, but also compete against each other for the same customers. two types includes in ;

1. Part of Business District/Centers (unplanned Business Districts).

2. Part of a Shopping Center (Planned Shopping Centers)

Part of Business District/Centers (unplanned Business Districts).A retail store can also be located as a part of a business

district. Or we can refer this as unplanned business centers

A business district is place of commerce in a city which developed historically as the center of trade and commerce in the city or town.

A business districts can be a central, secondary or a Neighborhood business district.

A Central business District CBD is the main center of commerce and trade in the city. (high land rates , intense development)

A CBD is the hub of retailing activity in a city.

CBD served different sections of population for Examples of Cannaught place in Delhi, Colaba in Mumbai, Commercial Street and in Bangalore are up market CBD’s.

CBD’s serving the upper and upper middle class customers across these cities like, chandani chowk in Delhi, Kalbadevi-Bhuleswar in Mumbai, Chickpet in Bangalore.

Secondary Business District are composed of unplanned cluster of store often located on a major intersection of city they a customers from a large part of the city

Part of a Shopping Center (Planned Shopping Centers)A shopping center has been defined as “ a group of retail

and other commercial establishments that is planned , developed, owned and managed as a single property”

The basic configuration of a shopping centre is a “Mall ” or Strip centre.

A mall is typically enclosed and climate controlled. A walkway is provided in front of the stores.

A strip centre is a row of stores with parking provided in the front of the stores.

In India we can planned shopping centre can categorize in two category

Regional shopping centers or Mall: Regional shopping centers or mall are the largest planned shopping centers..

Often they are anchored by two or more major department stores have enclosed mall serve a large trading area and have high rents. (ansal plaza,spencers plaza crossroads, DLF city in Gurgaon)

Neighborhood/community/shopping centers: Neighborhood /community centers usually have a balanced mix of stores including a few grocery stores , a chemist, a verity store and a few other stores selling convenience goods to the residents of the neighborhood.

Step involved in choosing a Retail Location In order to arrive at the decision on where to locate

the retail store a retailer needs to first on the region that he wants to locate the store.

After identifying the region the following steps Have to be followed .

1. Identifying the market in which to locate the store.

2. Evaluate the demand and supply within that market. i.e. determine the market potential.

3. Identify the most attractive sites

4. Select the best site available

1. Market Identification: The first step in arriving at a decision on retail location is to

identify the market attractiveness to a retailer. This is important that retail needs to understand the market

well. 2. Determining the market Potential:: The retailer need to take into consideration various elements

as shown in format. (features of population) Demographic features of the population The characteristics of the household in the area (average

household income) Competition and compatibility (Need to know compatibility

& competition in market) Laws & regulations:( good understanding of the laws

Determining the market Potential Demographics

of population & area

Competition

Laws & Regulation

Trade area analysis

Trade area analysis: A trade area is the geographic area that generates the

majority of the customers for the store.

Primary trade area: primary trading covers between 50-80% of the store’s customers.

Secondary Trading Area: this area contains the additional 15- to 25% of the store’s customers.

Tertiary trading area covers the balance customersThese trading areas are dependent on distance and do not

always have to be concentric in nature

Types of Trade areas.

Presented by www.InfoFan.zcom Prepared by Dr.Pooja Sharma 17

3 & 4 Identify Alternate sites and select the site:After taking decision on the location and market

potential the retailer has to select the site to locate the store based on these

TrafficAccessibility of the market is also a key factorThe total number of stores and the type of store

that exist in the areaAmenities To buy or to lease The product mix to be offered by the retailer