Evaluating Locations

Sunday, January 26, 14
EVALUATING RETAIL LOCATIONS

MATCHING LOCATION TO RETAIL STRATEGY

! The selection of a location type must reinforce the retailers strategy must be consistent with
! ! ! the shopping behavior size of the target market The retailers position in its target market
! Department Stores ! ! Specialty Apparel ! ! Category Specialists !

Mall Central Business District, Regional malls Power Centers, Free Standing
MATCHING LOCATION TO RETAIL STRATEGY

! The selection of a location type must reinforce the retailers strategy must be consistent with
! ! ! the shopping behavior size of the target market The retailers position in its target market
! Department Stores ! ! Specialty Apparel ! ! Category Specialists !

Mall Central Business District, Regional malls Power Centers, Free Standing
CONVENIENCE SHOPPING
Minimize the customers eort to get the product or service by locating store close to where customers are located
COMPARISON SHOPPING
Customers have a good idea of what type of product they want, but dont have a strong preference for brand, model or retailer.
COMPARISON SHOPPING
COMPARISON SHOPPING
Competing retailers locate Near one another
COMPARISON SHOPPING
COMPARISON SHOPPING
SPECIALTY SHOPPING
Customers know what they want
SPECIALTY SHOPPING
SPECIALTY SHOPPING
Convenient location matters less
SPECIALTY SHOPPING
SPECIALTY SHOPPING
ENVIRONMENTAL ISSUES
! Above-ground risks - such as
asbestos-containin 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 its found. Retailer can buy insurance that specically protects it from these risks.
d e s u e b n a c e t i s a w o h g n i n Zo
f o e p y t e h t e n i , t m o r l e t g e n i k -d r s a e p d f o o c e Building igns, size, typ ,s g n i d l d i e s bu u e b n a c t a etc. th

s n g i S
s n g i S
g n i s n Lice
s t n e m e r i u Req
FACTORS AFFECTING STORE SITE SELECTION
S N O I T I D N O C C I M O N O C E
t n e m y o l p m e nd a n o i t a l u p o p growth of
? e s i d n a h c r e m r o f d n a m de t c e e l l i w t How i
How e? u n i t n o c l l i hw t w o r g e h t long
y? h w d n a y l k uic q g n i w o r g Which areas
COMPETITION
COMPETITION
n a b r u g n i o g e r a s r e l i Reta
COMPETITION
COMPETITION
n o i t i t e p m o Lack of c
COMPETITION
COMPETITION
b a s o p s i d f o High level income le
COMPETITION
COMPETITION
r o b a l d e p p a Large, unt force
COMPETITION
STRATEGIC FIT
STRATEGIC FIT
ize and s , le o r p le , lifesty ic h p a r g o n area m a in De s ld o h e of hous n io it s o p m co
? d e t a c o l e b ey h t d l u o h s Where
OPERATING COST
OPERATING COST
s a e r a s s o r c Vary a
OPERATING COST
OPERATING COST
. s v d e r e d i s n o c a e r a f o y it m i x o r p y b d s e t a r e p Aecte o r ile a t e r e r e h w other areas
OPERATING COST
OPERATING COST
t c e e s a h nt e m n o r i v n e gal e l e t a t s d n Local a
OPERATING COST
? a e r A n a n i n e p O o t s re o t S y n a M How
e l a c S f o s e Economi
n o i t a z i l a b i Cann
One prom
s e r o t s l l a r o f s otional cost
re o t s r e p s e l a Increases s
l mar a n o i g e r f o s Target need ket
et k r a m f o l o r cont s a h t n e m e Manag
POSSIBLE DISPUTE BETWEEN FRANCHISE AND FRANCHISORS ON CANNIBALIZATION ISSUES

! Cannibalization diminishes returns from locating too many stores in an area ! Franchisers goal: to maximize sales of all stores (because loyalty is based
on total store sales ! No concern about cannibalization
! Franchisees goal: to maximize the sales and prots of its store(s)

! Concern about cannibalization
! An exclusive territory is granted to reduce conict

POSSIBLE DISPUTE BETWEEN FRANCHISE AND FRANCHISORS ON CANNIBALIZATION ISSUES

! Cannibalization diminishes returns from locating too many stores in an area ! Franchisers goal: to maximize sales of all stores (because loyalty is based
on total store sales ! No concern about cannibalization
! Franchisees goal: to maximize the sales and prots of its store(s)

! Concern about cannibalization
! An exclusive territory is granted to reduce conict

EVALUATING A SITE FOR LOCATING A RETAIL STORE
EVALUATING A SITE FOR LOCATING A RETAIL STORE
!The characteristic of the site !The characteristic of the trading area !The estimated potential sales that can be generated
SITE CHARACTERISTICS
SITE CHARACTERISTICS
TRAFFIC FLOW AND ACCESSIBILITY

o h s s r e m o t s cu e r o m , r e t a re g s i c a r t n Whe p

s r e l i a t e r e c ien n e v n o c r o f Good

r e l i a t e r n o i t na i t s e d r o f y r Not necessa s

e r o t s o t s s e cc a e d e p m i n h ca
Too muc

w o c a r t s important a
s i e r o t s o t y Accessibilit
as
ACCESIBIL IT
ACCESIBIL IT
n o i t i d n o C & n r e t t a Road P
ACCESIBIL IT
ACCESIBIL IT
Natural r e i r r a B l a i & Artic s
ACCESIBIL IT
ACCESIBIL IT
Visibility
ACCESIBIL IT
ACCESIBIL IT
w o l F c a r T
ACCESIBIL IT
ACCESIBIL IT
Parking
ACCESIBIL IT
ACCESIBIL IT
n o i t s e g n Co
ACCESIBIL IT
PARKING CONSIDERATIONS
Observe at variou s times
Employe e parking availabili ty
Shoppers that use c ars
Parking b y non-shop pers
!"#$%&'(') *+,-(./(& (0- . # # $ * + (,1$#
S T N A N E T T N ADJACE
t n e c ja d a ) g in t e p com o ls a ( y r a t n e m le Comp c retailers build tra
d e t a c lo e b o t t n a w P A G ld u o w s r e il a What ret near?
? s k c u b r a t S t u o b How a
ss e n e iv t c a r t t A e iv t la Principle of Cumu
R E T N E C G N I P P O H S A N I / W S LOCATION
s t s o c y c n a p u c c do n a s le a s h t o b s t c Ae
g in p p o h s n o is r a p m e shopping mall co r o t s t n e m t r a p e ed h t o t e s lo c e t a c lo goods
ets because rk a m t e rg ta r a il peal to sim p a t a th s re to s ent of te a m rt o Loc s s a d o o g a laces with p t a p o h s rs e m u s con merchandise
S N O I T C I R T S RE
Signage
Tenant Mix
Operating Hours
COST
COST
Rent
COST
COST
Common Area Maintenance Fee
COST
COST
Insurance
COST
COST
Advertising Fee
COST
TRADE AREA
! A contiguous geographic area that accounts for the majority of a stores sales and customers ! Primary zone 60 to 65 percent of its customers ! Secondary zone 20 percent of a stores sales ! Tertiary zone customers who occasionally shop at the store or shopping center
TRADE AREA
! A contiguous geographic area that accounts for the majority of a stores sales and customers ! Primary zone 60 to 65 percent of its customers ! Secondary zone 20 percent of a stores sales ! Tertiary zone customers who occasionally shop at the store or shopping center
ZONES IN THE TRADE AREA
FACTORS AFFECTING SIZE OF TRADE AREA

! Accessibility !Natural & Physical Barriers !Type of Shopping Area !Type of Store !The nature of merchandise, assortment, location of alternative sources for the merchandise !Competition !Parasite Stores
FACTORS AFFECTING SIZE OF TRADE AREA

! Accessibility !Natural & Physical Barriers !Type of Shopping Area !Type of Store !The nature of merchandise, assortment, location of alternative sources for the merchandise !Competition !Parasite Stores
MEASURING TRADE AREA

! Customer Spotting
! Purpose: to spot, or locate, the residences of customers for a store or shopping center
How to obtain data:

!credit card or checks !customer loyalty programs !manually as part of the checkout process !automobile license plates
MEASURING TRADE AREA

! Customer Spotting
! Purpose: to spot, or locate, the residences of customers for a store or shopping center
How to obtain data:

!credit card or checks !customer loyalty programs !manually as part of the checkout process !automobile license plates
A T A D S U S N CE
A E R A E D A R T E H T N I N O I T I T E P M CO
e p y T d n a t n Amou
Internet
s e g a P w o l l e Y
Store guide
ETC
INDICES FOR ASSESSING SALES POTENTIAL

Market Potential Index (MPI) Number of Households Purchasing a Product or Service in a Trade Area Spending Potential Index (SPI) Average Amount Spent on a Product or Service by a Household in a Trade Area
INDICES FOR ASSESSING SALES POTENTIAL

Market Potential Index (MPI) Number of Households Purchasing a Product or Service in a Trade Area Spending Potential Index (SPI) Average Amount Spent on a Product or Service by a Household in a Trade Area
LEASE TYPES
LEASE TYPES
e t a R d e x i F Percentage
LEASE TYPES
LEASE TYPES
o d e s a b e s a e l s e s a e l e g a Percent a % of sales.
LEASE TYPES
LEASE TYPES
f o e g a t n e c r e p n o d e s a b fee e c n a n e t n i ma sed a e l f o e g a t square foo
LEASE TYPES
E S A E L % F O S N VARIATIO
ed i c e p s h t i ew s a e l e a g o a t t p n u s e l a Perce s of e g a t n e c r e p m u m i x a m nt u o m a m u maxim
ng i w o l l a y b e nc a m r o f r e p r ile a t a e r e v s o d r b a a w t n Re a t ns o c t n e r d l o retailer to h f sales lo certain leve
ed i c e p s h t i ew s a m e l u e m i g n a i t n m e a c r ay Pe p t s u m r e l i a ret m . u e r m i a n s i e l m a s w o wl o h r e t t a m rent no
nt e r s a s e l a s f o e g a t n e c r e p e l a c s g n i d i Sl . p u o g s e l s sa a s e s a e r c e d
LEASE TYPES
LEASE TYPES
ys a a p r e l i a t e -R s e s a e L f e o t e a f i R l e d h e t x r i F ve o h t n o m r pe t n u o m a d xe the lease.
LEASE TYPES
LEASE TYPES
y b s e s a e r c in t n e R e s a e L d d e o t i r a e u p d d e Gra ci e p s a r e v o nt u o m a d e x a of time.
LEASE TYPES
TERMS O F LEASE
TERMS O F LEASE
e s u a l C e s U d e t i b i h o r P
TERMS O F LEASE
TERMS O F LEASE
o t g n i s a e l m fro d r o l d n a l e Limits th s. t n a n e t n i a t cer
TERMS O F LEASE
TERMS O F LEASE
e s u a l C e s Exclusive U
TERMS O F LEASE
TERMS O F LEASE
o t g n i s a e l m fro d r o l d n a l e ise d n a h c r e Prohibits th m ng i t e p m o c g in retailers sell
TERMS O F LEASE
TERMS O F LEASE
e s u a l C e p a c Es
TERMS O F LEASE
TERMS O F LEASE
s dont le a s if e s a le inate its , or if a s m r r a e e t y o f t o r r e e il eta d numb e i c e p Allows the r s a r vel afte s lease it le s in e t a t a r e in c m a r reach nter te e c e h t in t n ena specic co-t
TERMS O F LEASE
THANKS!

Evaluating Locations

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Evaluating Locations

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Sunday, January 26, 14

EVALUATING RETAIL LOCATIONS

Sunday, January 26, 14

MATCHING LOCATION TO RETAIL STRATEGY

! Department Stores ! ! Specialty Apparel ! ! Category Specialists !

MATCHING LOCATION TO RETAIL STRATEGY

! Department Stores ! ! Specialty Apparel ! ! Category Specialists !

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Competing retailers locate Near one another

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Convenient location matters less

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

! Hazardous materials - e.g. dry

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

f o e p y t e h t e n i , t m o r l e t g e n i k -d r s a e p d f o o c e Building igns, size, typ ,s g n i d l d i e s bu u e b n a c t a etc. th

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

FACTORS AFFECTING STORE SITE SELECTION

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Sunday, January 26, 14

Sunday, January 26, 14

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Sunday, January 26, 14

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Sunday, January 26, 14

Sunday, January 26, 14

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Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

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Sunday, January 26, 14

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Sunday, January 26, 14

Sunday, January 26, 14

ize and s , le o r p le , lifesty ic h p a r g o n area m a in De s ld o h e of hous n io it s o p m co

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14

Sunday, January 26, 14