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RETAIL LOCATION STRATEGY
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Importance of location decision
Most crucial element of Retail Mix
Location is a major cost factor because it :
i. involves large capital investment
ii. affects transportation costs
iii. affects human resources cost
Location is a major revenue factor because it :
i. affects the amount of customer traffic
ii. affects the volume of business
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Levels of location decision and its
determining factors
A retailer takes a location decision based
on:- selection of a city
- selection of an area or type of location within a
city- identification of a specific site
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Selection of city
Size of citys trading area
Population and growth trends
Purchasing power and its distributionTrade potential
Number, size & quality of competition
Development cost Operating costs
Number of stores in an area
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Types of retail locationTypes of
Types of locations
Free standing locations
neighborhood stores
highway storesUnplanned business districts/ centers
downtown or central business district
secondary business district
suburban business district
strip centre
Planned shopping centers regional shopping centers of malls
neighborhood / community
specialist markets
periodic/ weekly markets
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Area within the city or location
Catchment
or trading area Primary-50-70%
Secondary 20-30%
Tertiary
Merchandise assortment, alternatives
Occupancy cost of location
Qualitative and quantitative nature ofcompetition
Availability of access routes, traffic
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Nature of Zoning regulation
Restrictions placed on store operations byproperty managers
Index of retail saturation
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Retail catchment area is the sphere of influencearound a retail attraction from which the retaileris likely to draw customer.
A customer spot map is an accumulation of dotsplaced on a map of the catchment area, based on
the number of customers in a given geographiclocation.
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Site selection
Traffic flow and accessibility
Vehicular traffic
Ease of vehicular access
Access to major highways
Street congestion
Pedestrian traffic
Availability of mass transit
Ability of site to intercept traffic
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Site characteristics
Parking spaces
Access to store entrance and exit
Visibility of store from street
Access for deliveries
Size and shape of store
Condition of building
Adjacent retailers
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Costs
Rental fee
Common area maintenance cost
Local taxes
Advertising and promotion fees
Length of lease
Restrictions
Zoning
Signage
Restrictions on tenant mix
Safety code restrictions
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Site selection analysis
Six factors to be considered whileselecting a site: kinds of products sold
cost factor
competitors location
ease of traffic flow and accessibility
parking and major thoroughfares market trends
visibility
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STORE LAYOUT & DESIGN
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Objectives of store design
Implement retailers strategy
Build loyalty
Increase sales on visits Control costs
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Store design elements
Layout
Signage
Feature areas
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Store layout
Grid layout
Utilitarian benefits-locate product easily
Cost efficient- more merchandise; low cost standardised
fixtures Limitation-low visibility
Racetrack
Facilitates exposure to more merchandise
Wider aisles for convenience
Free form
Assymetric pattern
Relaxing environment
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Feature areas
Windows
Entrances
Freestanding displays
End caps
Promotional aisles/area
Walls
Dressing rooms
POP counters/checkout areas
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Space management
Space allocation for categories and brandsdepends on
Space productivity
Inventory turnover
Display needs of merchandise
Location of merchandise category
Impulse merchandise
Demand merchandise
Special merchandise
Complementary categories
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Visual merchandising
VM is the presentation of a store and itsmerchandise in a way that will attract attentionof customers
Fixtures
Presentation techniques
Idea oriented
Item and size
Color
Price lining
Tonnage merchandising
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Merchandising decisions
Merchandise management is the process bywhich a retailer attempts to offer the rightquantity of right merchandise in right place at
right time and meet companys financial goals
Merchandise category- an assortment of itemsthat customer see as substitutes for one another
Category management
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Merchandise planning process
Forecast category sales
Develop assortment plan
Determine appropriate inventory level andproduct availability
Develop a plan for managing inventory
Allocate merchandise for stores Buy merchandise
Monitor and evaluate performance and make
adjustments
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Types of planning processes
Staple / basic merchandise
Fashion /seasonal merchandise
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Customer service
Customer service is the set of activities andprograms undertaken by retailers to make theshopping experience more rewarding
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Services offered
Accepting credit cards
Alterations
Child care facilities Delivery
Demonstration and display
Trial rooms Extended store hours
Easy returns
Facilities for shoppers with special needs
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Gift wrapping
Customisation
Information about availabilty of products Parking
Repair
Shopping cartsValet parking