Store Location and Site Evaluation : Chapter 6

SUMMARY: Retailers desire to set up their outlets in the

best possible locations. The optimum store location for a
retailer is based on many factors like the type of industry,
the product category being sold, and the degree of
competition. Retail stores are located where the
opportunities offered by the market are at a maximum.
Retailers usually go through four step process to select a
store location: a) analyzing alternate trade areas; b)
determining the most beneficial type of location; c)
selecting a general site and; d) selecting a specific site. A
trade area refers to the geographical area from which
retailers attract customers. When two or more shopping
centers are situated close to each other, then their trade
areas would overlap. Every trade area consists of three
parts, primary, secondary and fringe. The size and
shape of the trade area depends on the size of the store, the type of the store, competitors
placement, and the time taken to travel to the store. Reilly's Law and Huff's model help retailers
define their trade area. Globally, retailers use geographic information systems to analyze and
delineate their trade areas. And three major factors that help retailers analyze their trade areas
accurately: the characteristics of the population, the characteristics of the economic base, the
competition and the level of retail saturation.
There are three types of locations that a retailer can consider for locating its store isolated store,
unplanned business districts and planned shopping centers. Important factors that are considered
when selecting a site are: sales potential; accessibility; pedestrian traffic; terms of occupancy;
and the legal and political environment.
The retailer must go through all these steps of location and site evaluation to find the "one
hundred percent location".

Store Layout, Design, and Visual

Merchandising

Some objectives for a store design are to (1) implement the retailers strategy, (2) influence
customer buying behavior, (3) provide flexibility, (4) control design and maintenance costs, and
(5) meet legal requirements. Typically, a store design cannot achieve all of these objectives, so
managers make trade-offs among objectives, such as providing convenience versus encouraging
exploration.
The basic elements in a design that guides customers through the store are the layout, signage,
and feature areas. A good store layout helps customers find and purchase merchandise. Several
types of layouts commonly used by retailers are the grid, racetrack, and free form. The grid
design is best for stores in which customers are expected to explore the entire store, such as
grocery stores and drugstores. Racetrack designs are more common in large upscale stores like
department stores. Free-form designs are usually found in small specialty stores and within large
stores departments.
Signage and graphics help customers locate specific products and departments, provide product
information, and suggest items or special purchases. In addition, graphics, such as photo panels,
can enhance the store environment and the stores image. Digital signage has several advantages
over traditional printed signage, but the initial fixed costs have made the adoption of this
technology slow. Feature areas are areas within a store designed to get the customers attention.
They include freestanding displays, end caps, promotional aisles or areas, windows, cash wraps
or point-of-sale areas, and walls.
Space management involves two decisions: (1) the allocation of store space to merchandise
categories and brands and (2) the location of departments or merchandise categories in the store.
Some factors that retailers consider when deciding how much floor or shelf space to allocate to
merchandise categories and brands are (1) the productivity of the allocated space, (2) the
merchandises inventory turnover, (3) the impact on store sales, and (4) the display needs for the
merchandise. When evaluating the productivity of retail space, retailers generally use sales per
square foot or sales per linear foot.
The location of merchandise categories also plays a role in how customers navigate through the
store. By strategically placing impulse and demand/destination merchandise throughout the store,
retailers can increase the chances that customers will shop the entire store and that their attention

will be focused on the merchandise that the retailer is most interested in selling. In locating
merchandise categories, retailers need to consider typical consumer shopping patterns.

Retailers utilize various forms of atmosphericslighting, colors, music, and scentto influence
shopping behavior. The use of these atmospherics can create a calming environment for taskoriented shoppers or an exciting environment for recreational shoppers.
Although a retailers Web site is different from its physical store, in many but not all cases good
design principles that apply to a physical store space can also be applied to a Web site.

What is customer service?

Customer service is the service provided to customers before, during and after purchasing and
using goods and services. Good customer service provides an experience that meets customer
expectations. It produces satisfied customers. Bad customer service can generate complaints. It
can result in lost sales, because consumers might take their business to a competitor. Customer
service is the provision of service to customers before, during and after a purchase.
According to Turban et al. (2002),[1] "Customer service is a series of activities
designed to enhance the level of customer satisfaction that is, the feeling that a
product or service has met the customer expectation

The importance of customer service may vary by product or service, industry and customer. The
perception of success of such interactions will be dependent on employees "who can adjust
themselves to the personality of the guest,"[2] according to Micah Solomon. Customer service can
also refer to the culture of the organization - the priority the organization assigns to customer
service relative to other components, such as product innovation or low price. In this sense, an
organization that values good customer service may spend more money in training employees
than the average organization, or proactively interview customers for feedback.
From the point of view of an overall sales process engineering effort, customer service plays an
important role in an organization's ability to generate income and revenue.[3] From that
perspective, customer service should be included as part of an overall approach to systematic
improvement. A customer service experience can change the entire perception a customer has of
the organization.