Presentation on theme: "Retail Location Important due to-1-Prime consideration of customer’s store choice, based on nearness to home/work, linked with other domestic work 2- strategic."— Presentation transcript:
Retail Location Important due to-1-Prime consideration of customer’s store choice, based on nearness to home/work, linked with other domestic work 2- strategic importance for sustainable competitive advantage. Merchnadise,price, assortments can b changed but not location of a store. competitors can’t easily copy as they r precluded from locating there.3-entry of more and more co’s in organized retail making difficult to find suitable location within budget,4-Forms an important P of place for a long time for adequate assurance for a success,5-It also influences the merchandise mix and interior layout of store.6-even with emergence of web location of store form an important step of retail strategy. 1-Location analysis - Factors affecting retail store location/site selection –A-Macro level-based on research of cbb, 1) travel time to reach store 2) parking space availability 3)nearness of complimentary stores or even competitors store to attract more customers, 4) investment to b made for site as it impacts return -.so calculate catchments potential index. average transaction value within a viable drive or walk time.5)delivery effectiveness in relation to consumer perceptions and expectations,6)financing methods available for purchasing or leasing, if interest rate is more then entire cost –benefit analysis gets impacted.
Location analysis cont- Besides above factors subjective judgment,assesment of entrepreneur is also necessary. based on information available as any delay in decision on site selection can b costly mistake. 2-Trade area analysis- market area of any potential location to b identified. Retail market is one where any group of individuals who posses the ability, desire and willingness to buy retail goods or services. Retail trade area is the one geographic area within which retail customers reside or work. Customer profile of a segment of the people with in such geographical area necessary to serve thru store as target market MNC’s setting up stores in various countries start with country analysis-comprising demographic analysis and population characteristics, C’s age gender income education family cahractorstics,occupation and many such variables which r useful to select market segments which finally becomes target markets for retailer
Trade area analysis cont----- Besides demographic factors- economic and infrastructural,cultural and competitive environment prevailing trade area also needs to b analyzed- Information to b gathered-1-land area,2-population,3-age distribution,4-household size and type,6-marital status,7-family size and type,8-owner occupied housing,9-rental status,10 religion,11-language spoken,12-schools, 13-income types, 14- poverty status,15-departure time for work,16-occupation,17- working women,18-,fertility rates,19-vehicles owners 20telephone subscribers 21- TV ownership. Above variables help location decision and also product line potential e.g. toys shop location banana for children, economic factor i.e. unemployment will affect purchasing power in that area, per capita income data helps in projecting demands for various merchandise. Economic stability of area can b estimated from household incomes and expenditure patterns, Buying power index and effective buying incomes r calculated to arrive at fairly accurate analysis of trade area.
Trade area analysis cont--- Mathematical models based on geodemographics r developed and being used in US for retail trade area analysis. Everyone in trade area will not b potential customer. Individuals with similar needs r identified to define target market so that merchandise can b stocked accordingly. Retail mkt potential, retail sales potential and retail sales forecast need to arrived from trade area analysis.RMP is total sales value in rs of products or product lines from all stores of particular retail trade area,RSP is expected sales volume in rs within trade area as part of RMP. and RSF is expected sales volume. Major components to arrive at mkt potential-1- no of potential customers in given area and 2- amount of money C spend for products or product line Population statistics is also useful to arrive at mkt potential as per capita or per household basis or per family basis one can calculate potential of location
3-Location strategy -after location analysis and trade area analysis site to b finalized based on 1-index of retail saturation- It examines level of competition and retail sales in a given geographical area to measure competitive saturation( total square meter of retail space existing and potential) 2-outshopping-people resort to go and shop out of their traditional shopping area.3-infrastructure- better to study access roads etc before finalizing location.,4-types of location- choice from shopping centre or business district or any other locality 5- rural and urban based on strategy and prosperity of each area, 6-Temporary locations-exhibition sites, festival sites. Above macro environment factors need to b considered of retail location besides micro environment factors like store ambience design, merchandising, personnels,store features, visual merchandising etc to make the organized retail store business successful Next-store layout. design, store display
Types of locations Various options r to choose store locations as per target audience and kind of merchandise to b sold e.g. convenience store would not b suitable near expensive jewelry or fashion store. few typical locations –Freestanding- isolated store,2-part of business district,3- part of shopping center. 1-Isolated store or a free standing location.-usually along a traffic artery without any competitive stores around, rents r low, facilities -parking r ample Advertising for such locations stores r high to draw customers for store visit. E.g. Stores +Petrol pumps, hotels cum fast food on highways due to high cost of travel and time place like Mumbai may not suit but based on catchments areas and time one can spend for travel,stores proximity in sequence with grocery, cosmetics,apparel books,music,jewelry 2-Part of business district-A place of commerce. can b central, secondary or a neighborhood, high peak land rates, intense developments, good accessibility thru transport from all parts,e.g. laxmi rd,cannought place,colaba etc,May not spend on ads for drawing customers but rents r high and facilities parking problem.
Location cont-.secondary b d evolved with spread of population with good mix of retailers, small stores with adequate transport, neighborhood business district- unplanned shopping area –super markets 3- part of shopping center-a group of retail and other commercial establishments, planned,developed, owned and managed as a single property, ample parking availability forms an important consideration for choice., it is a mall or strip center, mall is typically climate controlled,walkaway provided between two strips of stores in a mall. where as strip center –a row of stores with parking in front of strip stores. as established in west 8 basic types of shopping centers r defined-1- neighborhood-for convinience,2-community- for general merchandise convenience 3-,regional –G,M fashions etc, 4-super-larger of regional 5-fashon/speciality-high end fashons,6-power-category dominant 7-theme based- leisure, tourist oriented,8- outlet center-manufacturers outlets.
Steps involved in choosing location- 1-Identify the market in which to locate the store,2-evaluate the demand and supply within that market, i.e. determine the market potential,3-idntify the most attractive site, 4- select the best site available. 1-market attractiveness to a retailer based on peculiarities of each area of wants for products and services 2- market potential-based on a) demographics b) characteristics of households in the area, c) competition and compatibility with other stores, d) laws and regulations, e)- trade area analysis Step 3 and 4-identify alternate sites and select one based on a) traffic-pedestrian and vehicular, traffic suitable to kind of products to b retailed, b) accessibility to market-thru public transport, rail road connectivity, c) total no of stores and type of stores exist, d) amenities available, e) buy/lease decision as per options) Product mix offered- affects choice of location Make check lists for store location and site visit reports-see draft. Trends- in retail property developments e.g. gorgon,.a,b,c, d, towns analysis available