Retail Store & Location

Types of Retail Location, Importance of location

decision, Types of Locations, Factors affecting
location, Step involved in choosing a Retail Location,
Selection of shopping center, Retail location
theories, location assessment procedure
 Introduction

Define Store:
A store is place , real or virtual , where the shoppers
comes to buy goods & services. The sales transaction
occurs at this junction.

The location of retail store has for along time been considered
the most important P in retailing.

Locating the retail store in the right place was considered to be

adequate for success.
 Importance of retail Location Decisions
Location becomes a critical decision for a retailer for several
reasons. As like;

Location is generally one of the most important factors

customers consider while choosing a store.

A bad location may cause a retailer to fail even if its strategic mix
is excellent.. On the other hand , a good location may help a
retailer succeed even if its strategic mix is mediocre.

Store location is least flexible element of retailers strategic mix

due to its fixed nature, the amount of investment, and the length
of lease agreements
 Change in location gives three potential problems
Loss of loyal customers and employers
New location may not have the same characteristics of old location
Store fixtures cannot be moved to new location
Location affects a stores long run strategies
In short run, it affects specific elements of retail mix
 Factors affecting location
Size and characteristics of market (population)
Level of competition
Access to transportation
Parking space availability
Attributes of nearby stores
Property costs
Length of agreement
Population trends
Legal restrictions
Other factors
 Types of Retail Location
Various option are available to the retailer for choosing the
location of store.

The choice of the location of the store depends on the target

audience and the kind of merchandise to be sold.

A retailer has to choosing among alternate types of retail

locations available . It may locate in an isolated place and pull the
customer to the store on its own strength, such as a small
grocery store or paan shop in a colony which attracts the
customers staying close by
Typically a store location may be:

1. Freestanding /Isolated store.

2. Part of Business District/Centers (unplanned Business Districts).

3. Part of a Shopping Center (Planned Shopping Centers)

 1. Freestanding /Isolated store
Where there are no other outlets in the vicinity of the store and
therefore store depends on its own pulling power and promotion
to attracts customers.

A biggest advantages for freestanding stores is that there is no

competition around.

This type of location has several advantages including no

competition, low rent, often better visibility from the road, easy
parking and lower property .

Neighborhood Stores; colony shops serves small locality.

Highway Stores :Ebony store in Ludhiana .
 How far the customer is willing to travel?
Apparel Cosmetics
2.5Km 4.05 km

Music Books
2.74km
2.54 km
1km 2km 3km 4km 5km

Jwellery
1.5 km
Source : KSA Technopack
consumer outlook, 2004 Grocery 4 km
Business Associated Location: These are location where a
group of retail outlets offering a variety of merchandise work
together to attract customers to their retail area, but also
compete against each other for the same customers.two types
includes in ;

1. Part of Business District/Centers (unplanned

Business Districts).

2. Part of a Shopping Center (Planned Shopping

Centers)
 2. Part of Business District/Centers
(unplanned Business Districts).

A retail store can also be located as a part of a business district. Or

we can refer this as unplanned business centers

A business district is place of commerce in a city which developed

historically as the center of trade and commerce in the city or town.

A business districts can be a central, secondary or a Neighborhood

business district.

A Central business District CBD is the main center of commerce

and trade in the city. (high land rates , intense development)
 A CBD is the hub of retailing activity in a city.

CBD served different sections of population for Examples of

Cannaught place in Delhi, Colaba in Mumbai, Commercial Street
and in Bangalore are up market CBDs.

CBDs serving the upper and upper middle class customers

across these cities like, chandani chowk in Delhi, Kalbadevi-
Bhuleswar in Mumbai, Chickpet in Bangalore.

Secondary Business District are composed of unplanned cluster

of store often located on a major intersection of city they a
customers from a large part of the city
 3. Part of a Shopping Center (Planned
Shopping Centers)

A shopping center has been defined as a group of retail and

other commercial establishments that is planned , developed,
owned and managed as a single property

The basic configuration of a shopping centre is a Mall or Strip

centre.

A mall is typically enclosed and climate controlled. A walkway is

provided in front of the stores.

A strip centre is a row of stores with parking provided in the

front of the stores.
 In India we can planned shopping centre can categorize in two
category
Regional shopping centers or Mall: Regional shopping centers
or mall are the largest planned shopping centers..
Often they are anchored by two or more major department
stores have enclosed mall serve a large trading area and have high
rents. (ansal plaza,spencers plaza crossroads, DLF city in
Gurgaon)

Neighborhood/community/shopping centers:
Neighborhood /community centers usually have a balanced mix
of stores including a few grocery stores , a chemist, a verity store
and a few other stores selling convenience goods to the residents
of the neighborhood.
 Selection of Shopping centre / market
Shopping centers are distinctly different from the other two
major locations -- that is, downtown and local business strips.
The shopping center building is pre-planned as a merchandising
unit for interplay among tenants. Its site is deliberately selected
by the developer for easy access to pull customers from a trade
area. It has on-site parking as a common feature of the layout.
The amount of parking space is directly related to the retail area.

Customers like the shopping center's convenience. They drive in,

park, and walk to their destination in relative safety and speed.
Some shopping centers also provide weather protection and
most provide an atmosphere created for shopping comfort. For
the customer, the shopping center has great appeal.
 What Are your Chances
Developers and owners of shopping centers look for successful
retailers.
Then, the developer selects other types of stores that will
complement each other.
To finance a center, the developer needs major leases from
companies with strong credit ratings.
Your problem is to convince the developer that the new store
has a reasonable chance of success and will help the "tenant
mix."
 What a shopping centre can offer ?
Neighbor hood shopping centre 3 to 10acres, minimum
trading population 2500 to 40000
Community shopping centre -10 -30 acres, minimum trading
population 40,000 to 1,50,000
Regional shopping centre 30 to 50 acres, minimum trading
population 1,50,000 and more
 Selecting a shopping centre
Trade area and its growth
General income level of the trade area
No of households
Demographics of trade area
Market analysis
Location of store in the centre
Space
Rent & lease
Fittings
Other services by developers
 Types of shopping centers
Neighborhood shopping centers
Community shopping centers
Regional shopping centers
Enclosed malls
Specialty theme shopping centers
Regional Shopping Centre
Secondary business centers
 Neighborhood
shopping centre
Isolated
Location

Secondary Business
District

Central Business
District
 Factors to be considered in selecting a
shopping center
Traffic Count : the qualitative information gathered about the
passing traffic should include counting the individuals who seem
to possess the characteristics appropriate to the desired clientele,
judging their reasons for using that route, and calculating their
ability to buy.
Pedestrian Traffic Count : In making a pedestrian count you
must decide: who is to be counted; where the count should take
place; and when the count should be made. In considering who
is to be counted, determine what types of people should be
included.
 Estimate Of Store Sales :Data from a pedestrian traffic survey
can give you information on whether or not the site would
generate a profitable volume for your store.

Automobile Traffic Count ;A growing number of retail firms

depend on drive-in traffic for their sales. Both the quantity and
quality of automotive traffic can be analyzed in the same way as
pedestrian traffic.
 Free standing / isolated location
Advantages
No competition
Low costs
Flexibility
No group rules
Larger space
Location by choice
Better road and visibility
Customization
easy parking
 Disadvantages
Initial Difficulty in attracting costumers
Most people like variety in shopping
Travel time
Advertising costs
Operating cost are not shared
Built than renting
Unplanned and planned business
centers are preferred by costumers
 Unplanned Business Districts
Advantages
Excellent goods/service assortment
Variety of store types
Wide range of prices
Variety of customer services
High level of pedestrian traffic
Nearness to commercial or social facilities
 Disadvantages
Inadequate parking
Traffic congestion
Travel time for sub urban customers
Aging retail facilities
Decline condition of central cities
High rent and taxes
Movement of popular stores to suburbs
Discontinuity of offering
 Planned Business districts
Advantages
Excellent goods/service assortment for long term plan
strong sub urban population
One stop shopping preferred by customers
Co-operative planning and sharing of common costs
Creation of unified, distinctive shopping center image
Maximization of pedestrian traffic
Access to high ways and parking spaces
More appealing than city shopping centers
Reasonable rent ( excluding enclosed malls)
Lower theft rates
Popularity of malls
Growth of new types of malls
 Disadvantages
Reduced operating flexibility
Higher rents
Restriction on goods and services sold by
stores
Competitive environment within malls
Membership in associations which may of
little use
Too many malls in an area
Domination by large anchor stores
 Step involved in choosing a Retail
Location / site selection
In order to arrive at the decision on where to locate the retail
store a retailer needs to first on the region that he wants to
locate the store.
After identifying the region the following steps Have to be
followed .
1. Identifying the market in which to locate the store.

2. Evaluate the demand and supply within that market. i.e.

determine the market potential.

3. Identify the most attractive sites

4. Select the best site available

1. Market Identification:
The first step in arriving at a decision on retail location is to
identify the market attractiveness to a retailer.
This is important that retail needs to understand the market
well.
2. Determining the market Potential::
The retailer need to take into consideration various elements
as shown in format. (features of population)
Demographic features of the population
The characteristics of the household in the area (average
household income)
Competition and compatibility (Need to know compatibility &
competition in market)
Laws & regulations:( good understanding of the laws
Determining the market Potential

Demographics of Competition
population & area

Trade area
Laws & Regulation
analysis
 A trading area is a contiguous area from
which a retailer gets customers for the
merchandise he is selling. A trade area may
be a town, city, district, state, and country or
even beyond the countrys boundaries. The
trade area may be divided into few layers
(zones) depending upon the size and
operations of the store, its location,
merchandise offered and services offered.
 Since most of the retail sales especially
in big cities take place at stores, the
selection of the store location and
analyzing trade area becomes essential.
(i) A detailed analysis of trade area
provides the retailer a picture about
demographic and socio-cultural aspects of
consumers. For a new store, the analysis
of trade area becomes necessary to
understand the prevailing opportunities
and threats (if any) that may be a
success path for new entrant.
 (ii) It helps in identifying the consumer
demographics and socio-economic
characteristics.
(iii) It helps in assessing in advance the
effects of trade area overlapping.
 (iv) It helps in highlighting geographic
weaknesses. For example, trading area
analysis reveals that people from trans-river
hesitate to come to city shopping areas due
to pickpockets and thieves in evening.
Further, comprehensive study reveals the fact
that this is because of improper lighting
arrangements and absence of police
personnel. Therefore, shopping center could
exert political pressure to make the area well
lit and crossing safer.
 (v) It provides opportunity to understand and
review the media coverage patterns.
(vi) It helps in locating better site location by
understanding the existing trade areas
around the potential locations.
(vii) It helps in understanding customers
profile in terms of gender, age, income level,
consumption pattern, standard of living, local
requirements etc.
Factors to be considered while analyzing
trade area

1.Total size and density (demand and supply) of the population.

2. Per capita disposable income.
3. Education level.
4. Family system (joint / nuclear).
5. Occupation (job / professional / own business).
6. Standard of living.
7. Age group distribution.
8. Number of residents owning homes.
9. Number of manufactures, suppliers, wholesalers available.
10. Size of competition.
 Trade area analysis:
A trade area is the geographic area that generates the majority of
the customers for the store.

Primary trade area: primary trading covers between 50-80% of

the stores customers.

Secondary Trading Area: this area contains the additional 15-

to 25% of the stores customers.

Tertiary trading area covers the balance customers

These trading areas are dependent on distance and do not always
have to be concentric in nature
Types of Trades areas.
3& 4 Identify Alternate sites and select the site:
After taking decision on the location and market potential the
retailer has to select the site to locate the store based on these
Traffic
Accessibility of the market is also a key factor
The total number of stores and the type of store that exist in the
area
Amenities
To buy or to lease
The product mix to be offered by the retailer
 Merchandising,
Basis of retail merchandising,

Product and merchandising management is key activity in the

management of retail business.

The primary function of the retailing is to sell Merchandise.

One of the most strategic aspects of the retail business is to

decide the merchandise mix and quantity to be purchased .

Merchandising can be termed as the planning, buying and the

selling of merchandising .
 Define Merchandising as The analysis, planning, acquisition,
handling and control of merchandise investments of a retail
operation.

Merchandising is the core of retailing.

The function of merchandising is an integral part of retailing

and also one of the most challenging functions.

AMA define The planning involved in marketing the right

merchandise at the right place at the right time in the right
quantities at the right price.
 Achieving these five Right is the key to successful merchandising and many a times,
this remains an elusive goal for most retailers.

Merchandising management can be termed as Planning, analysis, acquisition,

handling and control of the merchandise
 Analysis: because retailers must be able to correctly identify their
customers before they can ascertain consumer desires and their
needs/requirements for making a good buying decision.

Planning is important because merchandise to be sold in the

future must be bought now.

Acquisitions because the merchandise needs to be procured from

others, either distributors or manufactures.

Handling involves seeing that the merchandise is where it is

needed and in the proper condition to be sold.

Control is required since the function of merchandise involves

spending money for acquiring products it is necessary to control
the amount of money spent on buying
 Factors Affecting the Merchandising Function

Merchandising does not function in isolation.

It is affected by various factors like the organization structure,
the size of the retail organization and the merchandise to be
carried.

Rarely are any two stores organized in the same way.

The function of the merchandising is vary from one organization

to another.

Size: The needs of the individual retailers vary from those of

large chain store operation.
 Size of organisation

Merchandise to be carried
Organisation Structure

Merchandising function

Types of store
 The merchandiser to be carried by a retailer largely determines
the responsibilities of the merchandiser.

Merchandise to be carried: The buying for basic merchandise is fairly

different from buying fashion merchandise.
A merchandisers who I handling fashion products will need to
spend more time in the market, and looking for the products
which is more suitable for the customers.

Organization structure that the retail organization adopts also affects

the merchandising function. Some organization may
differentiate the role of the buyer and the role of a
merchandisers separately.
 The Merchandises Role & Responsibilities

Planning: Thought the merchandising may not be directly

involved in the actual purchase of merchandise.
They formulate the policies for the areas in which they are
responsible.
Forecasting sale for the forth coming budget period and can
estimate the consumer demand and the impact of changes in the
retail environment.

Directing: Guiding and training buyers as and when the need

arises, is also a function of the merchandiser.
The buyers have to be guided to take additional markdowns for
products which may not be doing too well in the stores.
 Co-ordinating: Merchandise managers supervise the work of more than one buyer.
They need to coordinate the buying effort in terms of how well it fits in with the store
image and with the other products being bought by other buyers.

Controlling: assessing the buyers performance , is a also part of the merchandise

managers Job.
This includes evaluated on the basis of net sale, maintain mark up percentage, gross
margin % and stock turn
 Role of the Buyer

Buyers plays an important role in the retail industry. they select

and order merchandise to be sold.
Buyers may be responsible for buying for a department, an
entire store, or a chain of stores

1. Developing the merchandising strategies for the product line

2. Planning and selecting merchandise assortments
3. Vendor Selection
4. Pricing of the merchandise
5. Inventory Management
 Retail Store Design & Visual Merchandising

Store design and layout tells a customer what the store is all about
and it is very strong tool in the hands of the retailer for
communicating and creating the image of the store in the mind of
the customers.

The design and layout of the store are a means of communicating

the image of the retail store.

The environment which is creates in the retail store, is a

combination of the exterior look of the store, the store interiors,
the atmosphere in the store and the events, promotions and the
themes.
 The overall look of a store and the series of mental pictures and feelings it evokes
within the beholder.

For the retailer, developing a powerful image provides the opportunity to embody a
single message, stand out from the competition and be remembered.
 Elements of store design

Ext.
Frontage &
Entrance Display Parking
space

Building
architecture Location

Health &
Safety Store Access
design

Store
theme

Target Merchand
Customers ise Mix
 Exterior Store Design & Interior Design

Exterior
Location
Parking
Ease of access
The building architecture
Health and safety standards
Store windows, lighting
Interior
Fixtures
Flooring & Ceilings
Lighting
Graphics & Signages
Atmospherics
 Visual merchandising

Can be termed as the orderly, systematic, logical and intelligent way of putting
stock on the floor

VM is the art of presentation, which puts the merchandise in focus. It educates the
customers, creates desire and finally augments the selling process.
METHODS OF DISPLAYS

Color Dominance
Co-ordinated Presentation
Presentation by price