1. Chapter 7
Retail Locations

2. Retailing Strategy Human Resource Management Chapter 9
Retail Market and Financial Strategy Chapter 5, 6
Retail Locations Chapter 7
Site Locations Chapter 8
Information and Distribution Systems Chapter 10
Customer Relationship Management Chapter 11

3. Elements in Retail Mix Location Strategy Customer Service
Merchandise
Assortment
Pricing
Communication Mix
Store Display
And Design

4. What Are the Three Most Important Things in Retailing?
Location! Location! Location!
Eddie Tan/Life File/Getty Images

5. Why is Store Location Important for a Retailer?
Location is typically prime consideration in customer’s store choice.
Location decisions have strategic importance because they can help to develop sustainable competitive advantage.
Location decisions are risky: invest or lease?
F. Schussler/PhotoLink/Getty Images

6. Types of Retail Locations
Free Standing Sites
City or Town Locations
Inner City
Main Street
Shopping Centers
Strip Shopping Centers
Shopping Malls
Other Location Opportunities
PhotoLink/Getty Images

7. Types of Locations

8. Unplanned Retail Locations
Freestanding Sites – location for individual store unconnected to other retailer
Advantages:
Convenience
High traffic and visibility
Modest occupancy cost
Separation from competition
Few restrictions
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
JCPenney, Sears, Walgreens are shifting to stand alone locations

9. Unplanned Retail Locations
Merchandise Kiosks – small temporary selling stations located in walkways of enclosed malls, airports, train stations or office building lobbies.
Kent Knudson/PhotoLink/Getty Images

10. City or Town Locations
Gentrification is bringing population back to the cities.
Advantage to Retailers:
Affluence returned
Young professionals
Returned empty-nesters
Incentives to move provided by cities
Jobs!
Low occupancy costs
High pedestrian traffic
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

11. Central Business District
Draws people into areas during business hours
Hub for public transportation
Pedestrian traffic
Residents
High security required
Shoplifting
Parking is poor
Evenings and weekends are slow
Advantages
Disadvantages
Spike Mafford/Getty Images

12. Main Streets vs. CBDs Occupancy costs lower than CBDs
They don’t attract as many people
There are not as many stores
Smaller selections offered
Not as much entertainment
Some planners restrict store operations

13. The Most Expensive Shopping Streets in the World
Location
Cost / sq foot / year
Fifth Avenue (48th to
58th St.)
57th Street (5th Ave.
to Madison Ave.)
Oxford Street
Madison Avenue (57th
to 72nd St.)
Ave. des Champs
Elysee
New York City
London
Paris
$580
$500
$400
$375
$360

14. Inner City
Unmet demand tops 25% in many inner city markets
Inner city customer wants branded merchandise
(c) Brand X Pictures/PunchStock
Inner city retailers achieve high sales volume, higher margins and higher profits

15. Shopping Centers Shopping Center Management Controls: Parking Security
Parking lot lighting
Outdoor signage
Advertising
Special events for customers
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

16. Types of Shopping Centers
Neighborhood and Community Centers (Strip Centers)
Power Centers
Enclosed Malls
Lifestyle Centers
Fashion Specialty Centers
Outlet Centers

17. Neighborhood and Community Centers
Managed as a unit
The McGraw-Hill Companies, Inc./Andrew Resek, photographer
Attached row of stores
Onsite parking

18. Power Centers Open air set up Big box stores
Many located near enclosed malls
Available parking
Free-standing stores
Large trade areas
Low occupancy costs
Convenient
PhotoLink/Getty Images
Desirable shopping experience
Limited small specialty stores
Modest vehicular and pedestrian traffic

19. The Largest North American Shopping Malls

20. Mall of America Located near Minneapolis, MN Largest mall in the US
Enough people to qualify as the third largest city in Minnesota
Has more than 42 million visitors a year
More people visit than Disney World, the Grand canyon and Graceland combined
Digital Vision/Getty Images

21. Advantages and Disadvantages of Shopping Malls
Many different types of stores
Many different assortments available
Attracts many shoppers
Main Street for today’s shoppers
Never worry about the weather
Comfortable surrounding to shop
Uniform hours of operation
PhotoLink/Getty Images
Disadvantages:
Occupancy costs are high
Tenants may not like mall management control of operations
Competition can be intense

22. Challenge to Malls
Time pressured society makes it impractical to wander malls
Fashion apparel sold in malls experiencing limited growth
Malls are getting old and rundown – unappealing to shop
Anchor tenants are decreasing due to retail consolidation

23. Lifestyle Centers
Photo provided by ICSC and used with permission of Aspen Grove Lifestyle Center
Courtesy of General Growth Properties

24. Stores and Restaurants at Lifestyle Centers
Williams-Sonoma
Victoria’s Secret
Restoration Hardware
Barnes & Noble/Borders
Coldwater Creek
Pottery Barn
The Gap
Banana Republic
Bed Bath & Beyond
Eddie Bauer
Panera Bread
Ann Taylor
Starbucks
Dick’s Sporting Goods
Hallmark
Aeropostale
Johnny Rockets

25. Lifestyle Centers
Usually located in affluent residential neighborhoods
Includes 50K sq. ft. of upscale chain specialty stores
Open-air configuration
Design ambience and amenities
Upscale stores
Restaurants and often a cinema or other entertainment
Small department store format may be there

26. Fashion Specialty Centers
Upscale apparel shops
Need to be anchored
Décor is elegant
The McGraw-Hill Companies, Inc./Lars A. Niki, photographer

27. Outlet Centers
These shopping centers contain mostly manufacturers and retail outlet stores
Courtesy of Beall’s, Inc.

28. Tradeoff Between Locations
There are relative advantages and disadvantages to consider with each location.
Rent
Traffic

29. Relative Advantages of Major Retail Locations
Location City Strip Shopping Free
Issues Center Mall Standing
Large size
draws people
to area
People
working/living
in area
provided source
of customers
Source of ?
entertainment/
recreation
Protection
against weather

30. Relative Advantages of Major Retail Locations
Location CBD Strip Shopping Free
Issues Center Mall Standing
Security
Long, uniform
hours of
operation
Planned
shopping
area/balanced
tenant mix
Parking
Occupancy ?
costs
(e.g. rent)

31. Relative Advantages of Major Retail Locations
Location City Strip Shopping Free
Issues Center Mall Standing
Pedestrian
traffic
Landlord
control
Strong
competition
Tax ? ? ? ?
incentives

32. Other Retail Location Opportunities
Mixed Use Developments Airports Resorts Hospitals Store within a Store
Royalty-Free/CORBIS

33. Alternative Locations Mixed Use Developments MXDs
Hotels
Rob Melnychuk/Getty Images
Office Buildings
Civic Centers
Skip Nall/Getty Images
D. Falconer/PhotoLink/Getty Images

34. Alternative Locations Airports
Airports: Why wait with nothing to do?
Rents are 20% higher than malls
Sales/sqft are 3-4 times higher than malls
Best airports are ones with many connecting flights
Kim Steele/Getty Images

35. Alternative Locations Resorts
Captive audience
Well-to-do customer
Customers have time to shop
Royalty-Free/CORBIS

36. Alternative Locations Hospitals
Patients cannot leave
Gifts are available
Royalty-Free/CORBIS

37. Matching Location to Retail Strategy
Department Stores  Regional Mall
Specialty Apparel Central Business District, Regional Malls
Category Specialists  Power Centers, Free Standing
Grocery Stores  Strip Shopping Centers
Drug Stores  Stand Alone

38. Shopping Situations Convenience Shopping
Minimize the customer’s effort to get the product or service by locating store close to where customers are located
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

39. Shopping Situations Comparison Shopping
Customers have a good idea of what type of product they want, but don’t have a strong preference for brand, model or retailer.
Typical for furniture, appliances, apparel, consumer electronics, hand tools and cameras.
Ryan McVay/Getty Images

40. Category Specialists
Consumers can see almost all brands and models in one store
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

41. Shopping Situations Specialty Shopping
Customers know what they want
Designer labels
Convenient location matters less
The McGraw-Hill Companies, Inc./Andrew Resek, photographer

42. Environmental Issues
“Above-ground” risks - such as asbestos-containing
materials or lead pipes used in construction.
Hazardous materials - e.g. dry cleaning chemicals,
motor oil, that have been stored in the ground.
Retailers’ Protection
Stipulate in the lease that the lessor is responsible for removal and disposal of this material if it’s found.
Retailer can buy insurance that specifically protects it from these risks.

43. Other Legal Issues Zoning and Building Codes Signs
Zoning determines how a particular site can be used.
Building codes determine the type of building, signs, size, type of parking lot, etc. that can be used
Signs
Restrictions on the use of signs can also impact a particular site’s desirability
Licensing Requirements
Some areas may restrict or require a license for alcoholic beverages