RETAIL LOCATIONS

What are the 3 most important things in Retailing?

LOCATION, LOCATION & LOCATION

SOME COMMON QUESTIONS TO RETAILERS

Type of location available Relative advantage of each location Match of some locations to specific retail strategies Locations gaining popularity among retailers

TYPES

FREESTANDING/ ISOLATED

PART OF BUSINESS DISTRICT

PART OF SHOPPING CENTER

1. ISOLATED/ FREESTANDING
Store located along a major traffic artery, without any competitive retailer around. Low rents & ample parking High advertising costs Willingness of customer to travel long distances Nature of product Eg: Gas stations, fast food restaurants on highways etc. High shopping convenience, low pedestrian traffic, & high vehicular traffic.

2. PART OF BUSINESS DISTRICT

BD is the place of commerce in the city, or centre of trade with no pre-set format Can be classified as: Central, secondary or a Neighbourhood Business District. CBD: Main centre of trade in the city, peak land rates & intense developments, easy transport. Eg: CP in Delhi Retailer may not have to spend heavy on attracting customers but faces high rents & cumbersome parking

 SBD: Evolved over a period of time with the spread of population in the city A city may have more than 1 SBD Characterized by a good mix of retailers, relatively small stores & adequate transportation NBD: an unplanned shopping area, developed to serve the needs of the Neighbourhood. Characterized by presence of stores like a supermarket, stationary shops, medical shops etc.

3. PART OF SHOPPING CENTER

Shopping Center: A group of retail & other commercial establishments that is planned, developed, owned & managed as a single property. - by ICSC ICSC defined 8 basic types of Shopping centre: NSC, CSC, RSC, SRC, FC, PC, TC & OC BASIC CONFIGURATIONS : MALL & STRIP CENTER

Mall
Enclosed, with a climate-controlled between two facing strips of stores. walkway

STRIP CENTER
An attached row of stores or service outlets Managed as a coherent retail entity, with on-site parking usually located in front of the stores. Open canopies may connect the storefronts, but does not have enclosed walkways linking the stores. May be configured in a straight line, or have an "L" or "U" shape.

a) NEIGHBOURHOOD SHOPPING CENTRE

Designed to provide convenience shopping for the day-to-day needs of consumers in the immediate neighborhood. Roughly half of these centers are anchored by a supermarket, while 1/3rd have a drugstore anchor. Anchors are supported by stores offering pharmaceuticals and health-related products, sundries, snacks and personal services. Usually configured as a straight-line strip with no enclosed walkway or mall area, although a canopy may connect the storefronts.

B) COMMUNITY CENTER
Offers a wider range of apparel and other soft goods than the neighborhood center does. Among the more common anchors are supermarkets, super drugstores, and discount department stores. Community center tenants sometimes contain offprice retailers selling such items as apparel, home improvement/furnishings, toys, electronics or sporting goods. The center is usually configured as a strip, in a straight line, or L or U shape. Of the eight center types, community centers encompass the widest range of formats.

C) REGIONAL CENTER
This center type provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors: traditional, mass merchant, or discount department stores or fashion specialty stores. A typical regional center is usually enclosed with an inward orientation of the stores connected by a common walkway and parking surrounds the outside perimeter.

D) SUPER REGIONAL CENTER

Similar to a regional center, but because of its larger size has more anchors, a deeper selection of merchandise, and draws from a larger population base. The typical configuration is as an enclosed mall, frequently with multi levels.

E) FASHION/SPECIALTY CENTER
A center composed mainly of upscale apparel shops, boutiques and craft shops carrying selected fashion or unique merchandise of high quality and price. Need not be anchored, although sometimes restaurants or entertainment can provide the draw of anchors. The physical design is very sophisticated, emphasizing a rich decor and high quality landscaping. These centers usually are found in trade areas having high income levels.

F) POWER CENTER
Dominated by several large anchors, including discount department stores, off-price stores, warehouse clubs, or "category killers," i.e., stores that offer tremendous selection in a particular merchandise category at low prices. Typically consists of several freestanding (unconnected) anchors and only a minimum amount of small specialty tenants.

G) THEME/FESTIVAL CENTER
Typically employ a unifying theme that is carried out by the individual shops in their architectural design and, to an extent, in their merchandise. The biggest appeal is to tourists; they can be anchored by restaurants and entertainment facilities. Generally located in urban areas, tend to be adapted from older, sometimes historic, buildings, and can be part of mixed use projects.

H) OUTLET CENTER
Usually located in rural or occasionally in tourist locations Consist mostly of manufacturers' outlet stores selling their own brands at a discount. Typically not anchored. A strip configuration is most common, although some are enclosed malls, and others can be arranged in a "village" cluster.

OTHER TYPES OF SC
Mixed Use Developments (MXDs): combine several different uses in one complex including shopping centre, office towers, hotels, residential complexes, civic centre & convention centre. Airports Resorts Hospitals Store within a store

STEPS INVOLVED IN CHOOSING A RETAIL LOCATION

After identifying the region: 1. Identify the market: 2. Determine the market potential: Demographics Characteristics of the area Competition & compatibility Trade Area Analysis (TA is the geographic area that generates majority of the customers for the store) Laws & Regulation

Trade Area
Often extends beyond the municipal boundaries of a town or city. Can vary depending on factors like: nature of offerings or the different market segments. The potential of the trade area helps determine the no. of stores that can be located. Types: Primary, Secondary & tertiary PTA: covers 50-80% of the store customers & is closest to the store STA: contains the additional 15-25% of the store customers. TTA: covers the balance customers.

3. Identify Alternate sites & select the site (Traffic, Accessibility, amenities, buy/lease, product mix offered)

Refer: Preliminary assessment check list for a store location & Site visit report

SHOPPING BEHAVIOUR OF CONSUMERS IN RETAILERS TARGET MARKET

Three types of shopping situations in which the consumers involve are: 1. Convenience shopping: Indifference towards brands or retailers image. Minimize efforts to get products Low evaluation Targeted by Convenience stores Located in NBD

2. Comparison Shopping
Consumers are not much brand or store loyal but spend considerable efforts on evaluation. Generally applicable to home appliances, gadgets, apparel etc. Malls, Specialty stores & Category specialist comes under this, offering a huge range to compare.

3. Specialty Shopping
Consumers are well aware of what they need & do not accept any substitute. Brand/store loyal Ready to pay a premium or spend extra effort. Eg: buying specific branded perfumes. Dress etc. Ready to travel far-off locations

LEGAL CONSIDERATIONS
1. Laws regarding how land is used 2. Environmental Issues: Asbestos containing materials or lead pipes used in construction. Hazardous materials stored in the ground 3. Zoning & Building codes: Some parts of the city are zoned as: Residential, light industrial & retail use. BCs are similar legal restrictions specifying the type of building, signs, size & type of parking lot.

4. Signs Restrictions on the use of signs. Eg: SALE signs must also be approved by shopping center management prior implementation. 5. Licensing Sale of alcoholic beverages