RETAIL LOCATION STRATEGY

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

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

Selection of city

Size of citys trading area Population and growth trends Purchasing power and its distribution Trade potential Number, size & quality of competition Development cost Operating costs

Number of stores in an area

Types of retail location

Types of locations Types of

Free standing locations

neighborhood stores highway stores

Unplanned 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

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 of competition Availability of access routes, traffic

Nature of Zoning regulation Restrictions placed on store operations by property managers Index of retail saturation

Retail catchment area is the sphere of influence around a retail attraction from which the retailer is likely to draw customer.

A customer spot map is an accumulation of dots placed on a map of the catchment area, based on the number of customers in a given geographic location.

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

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

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

Site selection analysis

Six factors to be considered while selecting a site:

kinds of products sold cost factor

competitors location
ease of traffic flow and accessibility parking and major thoroughfares market trends visibility

STORE LAYOUT & DESIGN

Objectives of store design

Implement retailers strategy Build loyalty Increase sales on visits Control costs

Store design elements

Layout Signage Feature areas

Store layout

Grid layout

Utilitarian benefits-locate product easily Cost efficient- more merchandise; low cost standardised fixtures Limitation-low visibility
Facilitates exposure to more merchandise Wider aisles for convenience Assymetric pattern Relaxing environment

Racetrack

Free form

Signage and graphics

Help in locating products, provide information and reinforce stores image Types of signages
Category signage Promotional signage Point of sale signage Digital signages

Feature areas
Windows Entrances Freestanding displays End caps Promotional aisles/area Walls Dressing rooms POP counters/checkout areas

Space management

Space allocation for categories and brands depends on

Space productivity Inventory turnover Display needs of merchandise

Location of merchandise category

Impulse merchandise Demand merchandise Special merchandise Complementary categories

Visual merchandising

VM is the presentation of a store and its merchandise in a way that will attract attention of customers Fixtures Presentation techniques
Idea oriented Item and size Color Price lining Tonnage merchandising

Merchandising decisions

Merchandise management is the process by which a retailer attempts to offer the right quantity of right merchandise in right place at right time and meet companys financial goals Merchandise category- an assortment of items that customer see as substitutes for one another Category management

Merchandise planning process

Forecast category sales Develop assortment plan Determine appropriate inventory level and product availability Develop a plan for managing inventory Allocate merchandise for stores Buy merchandise Monitor and evaluate performance and make adjustments

Types of planning processes

Staple / basic merchandise Fashion /seasonal merchandise

Customer service

Customer service is the set of activities and programs undertaken by retailers to make the shopping experience more rewarding

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

Gift wrapping Customisation Information about availabilty of products Parking Repair Shopping carts Valet parking