ASST PROF. JONLEN DESAASST PROF. JONLEN DESA

STORE LOCATION - CONCEPTSTORE LOCATION - CONCEPT

Location of a retail outlet is an important decision that the retailer has to make.

This decision will have an impact on the profitability of the retail store.

A retailer can easily change his products, prices, promotion strategies etc. But changing the place (location) is not an easy task.

Store location is very important in the case of store based retailing.

Thus, store location is identifying and selecting the best location to establish a retail outlet.

STORE LOCATION - CONCEPTSTORE LOCATION - CONCEPTStore location decisions are strategic, long term, non-

repetitive and involve heavy investment and hence it is often irreversible.

The retailer should consider financial, technical, commercial, social & political aspects before deciding on a suitable location.

Thus, a retailer should select a location for his store which should be convenient to the retailer, suppliers & customers.

STORE LOCATION - CONCEPTSTORE LOCATION - CONCEPT

A bad store location puts everyone in inconvenience.

Of all the elements of the marketing mix, place( location) cannot be changed easily.

Store location decisions decide the future & overall profitability of the entire retail business.

IMPORTANCE OF STORE LOCATIONIMPORTANCE OF STORE LOCATION

Attracting maximum customersConvenience to suppliersInvolves large capital requirementEasy to locateIncrease in sales & profitabilityDifficulty in changing the store locationDetermines the volume of business

CHECK LIST FOR A STORE LOCATIONCHECK LIST FOR A STORE LOCATION

DETAILS OF RETAILER’S STORE: City/TownStreet AddressType of LocationSize of the Store

DETAILS OF RETAIL STORES IN VICINITYNo. of StoresTypes of StoresSize

CHECK LIST FOR A STORE LOCATIONCHECK LIST FOR A STORE LOCATION

DETAILS OF RESEDENTIAL AREAS SURROUNDING THE LOCATION:

DemographicsSocio-Economic Profile

PRE- EXISTENCE OF A RETAIL STORE AT SITE, if any:

• Name & Address of Property Owner• Lease Rent/Rate• Photography of the Store

TYPES OF RETAIL LOCATIONSTYPES OF RETAIL LOCATIONS

1. FREE STANDING/ ISOLATED STORE

In this type of location, there are no other outlets in the vicinity of the store.

It is called a free standing location or isolated store due to the absence of other retail outlets.

It depends upon its own power and quality to attract customers.

Gas stations, convenience stores, hotels and fast food restaurants on highways, many a times, operate as free standing locations.

There are no competitive retailers around.Rent is low, advertisement cost is high.

1. FREE STANDING/ ISOLATED STORE

Ample of parking space available.Retailers should keep in mind the cost of

transportation for customers.It is suitable for customers who are travelling.These kind of stores are common along

highways.

ADVANTAGES

Absence of any competitor in close proximity.Rents are usually low.Flexibility in operation since no group rules need to

be followed.Larger space is available for operation as well as

parking.The element of monopoly helps in increasing

revenue.

DISADVANTAGESIt may be difficult to attract customers initially.People may not like to travel very far to get something

unless they have to pass through that way.Most people like variety in shopping.Advertisement expenditure may be high.A store must often be built rather than rented thus higher

capital expenditure is required.

2. PART OF BUSINESS DISTRICT

A retail store can be located as a part of a Business District.

Business District is the place of commerce in a city, which is developed historically as the center of trade and commerce in the city or town.

It will have no pre-set format or structure. A business district can be a central, secondary or a

neighboruhood business district.

E.g: Margao is the commercial capital of Goa.

A. THE CENTRAL BUSINESS DISTRICT

It is the main centre of commerce and trade in the city. It is hub of retailing activity in a city. It has the trade area that varies according to the size of the

city. Customers from the neighbouring villages come for

shopping. It has good accessibility in terms of transport from all parts

of the city.

ADVANTAGESExcellent goods/service assortment.Having a variety of store types and positioning

strategies within the area.Range of price may be large.Variety of customer services.Access to public transportation.Pedestrian traffic is large.Nearness to commercial and social facilities and the

people may visit the area even having no intention to make purchases.

DISADVANTAGESDISADVANTAGES

Lack of planned development of the centre.Inadequate parking.Traffic congestion.Longer travel time for those living in the villages.Few stores may be old and traditional.High rents and taxes for popular sites.Space shortage for assortment.

B. THE SECONDARY BUSINESS DISTRICT

It is one which has evolved over a period of time as a result of increase in population of the city.

The number of such centers can be more than one. It is characterized by a good mix of retailers.The stores are generally smaller than those in the

Central Business District Public transportation is adequate.

C. THE NEIGHBOURHOOD BUSINESS C. THE NEIGHBOURHOOD BUSINESS DISTRICTDISTRICT

It is an unplanned shopping area that has developed to serve the needs of the neighbourhood.

It is characterized by the presence of stores like a supermarket, stationery stores, medical shops etc

3. PART OF SHOPPING CENTER3. PART OF SHOPPING CENTER

A shopping center has been defined by the International Council of Shopping Centers as “a group of retail and other commercial establishments that is planned, developed, owned and managed as a single property”.

The availability of parking is an important feature of a shopping center.

It is a planned shopping center which consists of a group of architecturally unified commercial establishments on a site that is centrally owned or managed, designed and operated as a unit.

3. PART OF SHOPPING CENTER3. PART OF SHOPPING CENTER

The quality, variety of products are determined by the needs of the population.

To maintain the balance, various product lines are allocated space in a reasonable manner.

The basic configuration of a shopping center is a mall and a strip center.

A mall is typically enclosed and climate controlled. A strip center is a row of stores with parking provided in

front of the stores. A walkway is provided between two facing strip of stores.

8 TYPES OF SHOPPING CENTERS8 TYPES OF SHOPPING CENTERS

Neighbourhood Shopping CenterCommunity Shopping CenterRegional Shopping CenterSuper Regional CenterFashion/Specialty CenterPower CenterTheme CenterOutlet Center

ADVANTAGES

A center for family shopping since it is only one stop shopping.

Unified distinctive image of shopping center.Pedestrian traffic is maximized for individual store.More spacious hence more appealing than city shopping

for a number of customers.Availability of many services including entertainment,

controlled temperature and demonstration of even large sized products.

DISADVANTAGESA highly competitive environment within the center.Rent may be high as compared to isolated store.Regulations by the landlord may reduce the flexibility of

a retailer.Sometimes there are restrictions on the goods/services

that can be sold by each store.Extra payments for certain common purposes which may

not be revenue earning to the retailer such as membership of the merchants’ association.

Domination by large stores.

4. OTHER LOCATIONS- PERIODIC MARKET

Such markets are organized at a particular place on a particular day during a week.

Such markets serve lower and middle class families. These are very popular where there is high concentration

of population particularly of a given income level. They provide a large number of products. The shops are arranged on a temporary basis for certain

hours A nominal rent is paid to the local government.

STEPS IN CHOOSING A RETAIL LOCATION

1. MARKET IDENTIFICATIONThe first step in deciding on a retail location is identifying

the market’s attractiveness to a retailer. This is important as he needs to understand the market

well, especially in a country like India where every region has its own needs.

This is also important in case of an international expansion

2. DETERMINING THE MARKET POTENTIALIn order to determine the market potential, the

retailer needs to take into consideration various elements.

a.Demographic Features of the population

b.The Characteristics of the Households in the Area

c.Competition & Compatibility

d.Laws & Regulations

e.Trade Area Analysis

TRADE AREA ANALYSISTRADE AREA ANALYSISA trade area is the geographic area that generates

majority of the customers for the store.A trade area often extends beyond the municipal

boundaries of a town or city. The potential of the trade area is a key factor that helps

determine the number of stores that can be located in the area.

A trade area typically contains three parts—primary, secondary and tertiary.

TRADE AREA ANALYSISTRADE AREA ANALYSISThe primary trading area covers between 50 to 80% of

the store’s customers and it is the area closest to the store.

The secondary trading area contains the additional 15 to 25% of the store’s customers.

The tertiary trade area covers the balance customers.

Trading areas are dependent on the distance.Different businesses will have different trade areas.

TRADE AREA ANALYSISTRADE AREA ANALYSIS

A store may be a destination store, where the trading area would be much larger and people would be willing to travel a distance to visit the store.

Another type of an outlet is a parasite store which does not have any traffic of its own, but depends on people who are drawn to that location for other reasons.

3. & 4. IDENTIFY ALTERNATE SITES & SELECTION OF SITE

After determining the market potential and taking a decision on the location of the store, a retailer has to select the site to locate the store. There are various factors which affect his decision:

Traffic- Pedestrian & Vehicular TrafficAccessibility of the market Total number of stores and type of stores in the area Amenities available To buy or to lease Product mix offered