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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