Beruflich Dokumente
Kultur Dokumente
Objectives
Importance of store location for a retailer and to outline the process of choosing a store location Concept of a trading-area and its related components Types of locations available to a retailer: isolated stores, unplanned business districts, and planned shopping centers Decisions necessary in choosing a general retail location
Trading-Area Analysis
A trading-area is a geographic area
containing the customers of a particular
With GIS:
Firms can access computer-generated maps and quickly research the attractiveness of different locations
Red and yellow polygons represent a 9-minute drive around each location 80% of customer base
Technology in Retailing
ShopperTrak (www.shoppertrak.com) has 70,000 shopper traffic- counting devices that have been installed in 70 countries around the world. ShopperTrak devices count shopper visits and can refine the counts to exclude children and retail employees from its overall count. Their traffic counts are between 96 percent and 98 percent accurate. ShopperTraks new FlashTraffic system conveys traffic data on an hourly basis to retailers point-of-sale systems to enable retail managers to adjust and optimize store staffing levels.
Example
GFK GeoMarketing offers GIS software services that assist international retailers wanting to expand into such countries as China. The firm recently did a location analysis in Peking to determine
includes all the remaining customers, and they are the most widely
Destination stores
Have a better assortment, promotion, and image Generate trading-areas much larger than competitors
Parasite stores
Do not create their own traffic and have no real trading-area of their own These stores depend on people who are drawn to area for other reasons
Largest
Supermarkets
TRADING AREAS
Department stores
Convenience stores
Analog Model
Potential sales for a new store are estimated on the basis of revenues for similar stores in existing areas, competition at a prospective location, new stores expected market share at that location, size and density of the locations primary trading area.
Regression Model
Series of mathematical equations showing the association between potential store sales and several independent variables at each location, such as population size, average income, number of households, nearby competitors, transportation barriers and traffic patterns.
Gravity Model
People are drawn to stores that are closer and more attractive than competitors stores. The distance between consumers and competitors, the distance between consumers and a given site, and store image are included in this model.
Assumptions:
1. Two competing areas are equally accessible from a major road 2. Retailers in the two areas are equally effective. 3. Other factors (such as population dispersion) are held constant or ignored.
Computation
Distance is only measured by major thoroughfares; some people will travel shorter distances along cross streets Distance traveled does not reflect travel time. Many people are more concerned with time traveled than with distance
Population Size and Characteristics Availability of Labor Closeness to Sources of Supply Economic Base
Availability of Labor
Management
Management trainees
Clerical
Economic Base
Dominant industry Extent of diversification Growth projections Economic and seasonal fluctuations Availability of credit and financial facilities
Competitive Situation
Number and size of existing competition Evaluation of competitor strengths and weaknesses Short and long-run outlook Level of saturation
Regulations
Taxes
Licensing
Operations Minimum wages
Site analysis
Overview
Step 1: Determine what type of location is desirable Step 2: Select the general location
Isolated Store
Isolated Stores
A freestanding retail outlet located on either a street or a highway. There are no adjacent retailers with which this type of store shares traffic.
Advantages
* No competition * Low rental costs * Flexibility * Good for convenience stores * Better visibility * Adaptable facilities
Disadvantages
* * * * * * Difficulty attracting customers Travel distance Lack of variety for customers High advertising expenses No cost sharing Restrictive zoning laws
* Easy parking
Large-store formats (e.g. Big Bazaar) and convenience-oriented retailers (Spencers Super) are usually the retailers best suited to isolated locations because of the challenge of attracting a target market.
String
CBD.
An SBD has smaller stores, less width and depth of merchandise assortment, and a smaller trading area (consumers will not
travel as far), and it sells a higher proportion of convenienceoriented items. Parking problems, travel time, and congestion are less for the SBD
String
A string is an unplanned shopping area comprising a group of retail stores, with similar or compatible product lines, located along a
Disadvantages
Limited flexibility Higher rent Restricted offerings Competition Requirements for association memberships * Too many malls * Domination by anchor stores * * * * *
* Cost sharing
* Transportation access * Pedestrian traffic
Characteristics of Centers
Optimum
Site
for a
Particular
store
Pedestrian Traffic
The most crucial measures of a location/sites value are the number and type of people passing by Proper pedestrian traffic count should include:
age and gender (exclude very young children) count by time of day pedestrian interviews
Vehicular Traffic
Different for:
convenience stores
outlets in shopping centers petrol pumps suburban areas with limited pedestrian traffic
Some retailers count only homeward-bound traffic, some exclude vehicles on the other side of a divided road Retailer should study the extent and timing of congestion (from traffic, detours, and poor roads). People normally avoid congested areas and shop where driving time and driving difficulties are minimized.
Parking Considerations
Transportation
Closeness to public transport is important for people who do
Store composition
If the stores at a given location (be it an unplanned district or a planned center) complement, blend and cooperate with one another, affinity exists. When affinity is strong, the sales of
each store are greater due to the high customer traffic than if
the stores are apart. Proper retail balance occurs when the number of store facilities for each merchandise or service classification is equal to the locations market potential, there is an adequate assortment within any category, and there is a proper mix of store types (balanced tenancy).
Specific site
Visibility is a sites ability to be seen by pedestrian or vehicular traffic. High visibility aids store awareness. Placement in the location is a sites relative position in the
Ownership Disadvantages:
High initial costs, the long-term commitment, inability to readily change sites.
Leasing advantages:
Minimizes the initial investment, reduces risk, allows access to prime sites that cannot hold more stores, leads to immediate occupancy and traffic, and reduces the long-term commitment.
Retailers feel they can open more stores or spend more on other aspects of their strategies by leasing.
Leasing disadvantages:
Firms that lease accept limits on operating flexibility, restrictions on subletting and selling the business, possible nonrenewal problems, rent increases, and not gaining from rising real-estate values.
Overall rating
(1) Each location under consideration is given an overall rating based on the criteria. (2) The overall ratings of alternative locations are compared, and the best location is chosen. (3) The same procedure is used to evaluate the
Conclusion
It is often difficult to compile and compare composite