Retail Store LocationsRetail Store Locations

Store Site SelectionStore Site Selection

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Chapter Objectives

Identify the types of retail locations.

Explain the difference between a strip center and a mall.

Define trade areas.

Explain the retail site-selection criteria.

Explain the importance of traffic for a retail business.

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The Importance of Location

Have you ever wondered how a retail storeowner decides where to locate a new store?

This chapter will examine the factors that go into making that decision.

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Types of Store Locations

There are many types of locations a retailer can choose.

The store location is related to the store image and the types of merchandise and services the store offers.

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Shopping Centers

There are two types of shopping centersshopping centers:

shopping center a group of retail stores and service businesses operated as one business by one owner

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Strip centersStrip centers

MallsMalls– Regional malls– Fashion malls– Outlet malls

strip center a group of stores that feature a parking lot in front and is not an enclosed shopping area

mall shopping area that is usually enclosed and has customer parking near the mall building

Shopping Centers

KiosksKiosks are another place to shop in many malls.

kiosk a freestanding, small shopping space usually located in a mall

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Retailers may also locate in a central business central business districtdistrict.

central business district an exterior shopping area that has developed without much planning

Operating an e-tail business on an electronic channel—the Web—can be costly, due to design, delivery, returns, and operating expenses.

Though Many larger dot-com companies crashed in the 1990’s, small stores like Harris Cyclery of West Newton, Massachusetts, actually increase sales using a basic Web site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service.

Describe an e-business’s home page to your class after viewing one through marketingseries.glencoe.com.

Going to a music store can be inefficient; you may have to go to several locations to find what you want. At online retailer Amazon.com, you can browse through hundreds of

It’s a Jungle Out There

thousands of new and used CDs in a matter of minutes. A brick-and-mortar store would have to be huge to offer this kind of variety and convenience. By offering music for sale online, Amazon.com keeps overhead costs low, their selection high—and their customers satisfied.

For more information on retailing, go to marketingseries.glencoe.com.

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Freestanding Locations

The advantages of a freestanding locationfreestanding location are:

freestanding location a store that is not attached to other retail stores

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Lower rent

More parking

Better visibility

No direct competition

Convenience

Few restrictions on signs, hours, or merchandise

Ability to expand

Business Climate

The retailer must consider the business climate of a town or area before making a final decision about a location for a store.

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Business Climate Considerations

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DemographicsPopulation growth

More customers

Population decline

Fewer customers

Employment TrendsHigh rate

High spending

Low rate

Low spending

AcceptancePeople welcome new businesses

People reject new development

CompetitionHealthy competition Too much competition

Out-of-date competition

Less competitive

Moderncompetition

More competitive

What are the three broad categories of shopping locations?

What are two differences between strip centers and malls?

Why would a small retailer be unlikely to locate in a freestanding location?

1.

2.

3.

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Elements of Site Selection

Retailers examine business trade areas, as well as other criteria when selecting a specific site for a store.

Retailers must decide between renting a location and buying a location.

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Trade Area

The type of store, the merchandise or services offered, and the amount of competition in the area all have an effect on the size of a business’s trade areatrade area.

trade area the geographic area from which a store draws most of its customers and sales

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Other Site-Selection Criteria

Eight criteria that retailers can use to evaluate a potential business site are:

traffic the number of people who pass a retail location during a given period of time

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TrafficTraffic

Ease of accessEase of access

VisibilityVisibility

ease of access ability of customers to get in and out of a business site easily

visibility ability of the site to be easily seen by customers

continued

Parking

Other Site-Selection Criteria

Competition lease a rental agreement between a landlord and a renter for a property

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continued

Zoning

Lease Lease terms– Percentage– Fixed-rate lease

Merchandise sold

Securing a Business Site

When a retailer owns property, the retailer is responsible for all repairs and upkeep. The other option is for the retailer to lease, or rent, business space.

If the retailer decides that the business would be best located in a strip mall, then the retailer would have to lease space.

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What is a business’s trade area?

What are nine site-selection criteria?

Why is competition important when selecting a business location?

1.

2.

3.

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shopping centers, including strip centers and malls; business districts, andfreestanding locations

1. A strip center houses a group of shops connected by walkways orsidewalks with parking in front; a mall is a usually a closed space orbuilding housing shops with parking around the exterior of the space.

2. It's the geographic area from which the store draws most of its customers.

3. trade area, traffic, ease of access, parking, and visibility

4.Describe the the types of retail locations.

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Explain the differences between a strip center and a mall.

Define trade areas.

Describe retail site-selection criteria.

Checking Concepts

continued

1.

2.

3.

4.

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Explain the importance of traffic.

List at least two of four terms in a lease.

Name one factor that a retailer should review several times before deciding on a store site.

Traffic refers to the number of people who pass a retail location; traffic can most usefully be counted in terms of people who are potential customers. Retailers need customers to sell their products.

5. rent amount, services provided by landlord, length of the lease, and lease renewal terms

6. The retailer should see if the merchandise or service offered is compatible with the site.

7.

Checking Concepts

continued

5.

6.

7.

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Critical Thinking

Explain why you think it would be important for a dry-cleaning shop to have ease of access.

People consider the dry cleaners to be a quick stop; clients run in and run out after dropping off or picking up their cleaning. They want to be close to the shop to avoid wasting any time.

8.

Checking Concepts

8.

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