2. Retail Locations:
Chapter 7
Section 3:
Other Locations,
Location and Retail
Strategy, and Legal
Considerations
Matthew Sullivan
3. Questions:
* What types of locations are available to
retailers?
* What are the relative advantages of each
location type?
* Why are some locations particularly well
suited to specific retail strategies?
* Which types of locations are growing in
popularity with retailers?
4. The Importance of Store Location
- Store location is most often the
first consideration in a store choice
- Having a good location increases
chances of developing a strong
sustainable competitive advantage
- Location decisions can be risky and
should be well-thought out
5. Process of Choosing Particular Locations
- Size of the trade area
- Occupancy cost of the location
- Pedestrian and vehicle customer traffic location
- Restrictions on operations by property managers
- Convenience of location for customers
Trade area: the geographic area that encompasses most of
the customers who would patronize a specific retail site
6. Section 1
- Types of locations
- Unplanned retail locations
Milton Law
7. Types of Retail Locations
- Freestanding Sites such as
outparcels and merchandise
kiosks
- City or Town Locations such as
central business districts,
main streets, and inner city
locations
8. Advantages and Disadvantages
of Freestanding Locations
- Convenience for customers - Limited trade area when
not around nearby retailers
- High vehicular traffic and
visibility - Higher Occupancy costs that
strip centers
- Modest occupancy costs
- Usually located where there
- Separation from competition is little pedestrian traffic
10. Merchandise kiosks
Small selling spaces, typically located in the walkways of enclosed
malls, airports, train stations, or office building lobbies.
12. City or Town Locations
- Lower occupancy costs - Traffic is limited due to
- Higher pedestrian traffic congestion
- Parking problems reduce
consumer convenience
13. Central Business Districts
(CBD)
- Draws people during - High security required
business hours - Shoplifting
- Heavy public transportation - Parking is poor
- Pedestrian traffic - Evenings and weekends are
- Residential area as well slow
14. Main Streets vs. CBD’s
- Occupancy costs are generally lower than CBD’s
- Fewer people are employed
- Smaller selection due to fewer stores
- Range of entertainment is usually smaller
- City planning sometimes restrict store operations
15. Inner City
High density urban areas with higher unemployment and lower median
incomes than surrounding areas
- Retailers here achieve higher sales volume and
higher margins, thus producing higher profits
- Redevelopments in inner cities can cause
increased traffic and parking
difficulties, causing them to be controversial
20. Shopping Malls
- Wide variety of stores - Occupancy costs are
- Wide assortment of generally higher
merchandise - Mall control over business
- Shopping and entertainment operations
- No inclement weather - Competition can be intense
- Uniform hours of operation
- Attracts many shoppers
21. Enhancing the Mall Experience
- Common areas
- Family lounges
- Great food
- Playgrounds
- Entertainment
23. Lifestyle Centers
Shopping centers with an open-air configuration of specialty stores, entertainment, and restaurants
with design ambience and amenities
- Ease of parking - Less retail space
- Relaxed open-air - Smaller trade areas
environment - Attract fewer customers
- Pedestrian traffic tends to
be higher
- Occupancy costs and
operating restrictions are
less
25. Outlet Centers
- Strong entertainment component
- Becoming more popular outside the
United States
- Tourism is important for outlet
centers
26. Theme/Festival centers
- Located in places of historic
interests or for tourists
- Anchored by restaurants
and entertainment facilities
- Generally targeted at
tourists, they may also
attract local customers
- A common element of these
centers is entertainment,
although some rely solely on
the shopping experience
27. Omnicenters
Omnicenters are becoming
more popular in the U.S.
partly from the desire of
tenants for lower common-
area maintenance charges
and the growing tendency
of consumers to cross-
shop.
28. Mixed Use Developments
- Offer an all-inclusive
environment so that
consumers can
work, live, and play in a
proximal area
- Combine several different
uses into one
complex, including shopping
centers, office
towers, hotels, residential
complexes, civic centers, and
convention centers
29. Section 3
- Other Locations
- Location and Retail
Strategy
- Legal
Considerations
Matthew Sullivan
31. Airports
- High pedestrian traffic
- Sales per square foot are
higher than mall stores
- Rent is higher
- Hours are longer
- Inconvenient location for
workers means higher wages
32. Temporary Locations (pop-up stores)
- Good for businesses trying
to create a little hype
- Good introduction for new
stores or products
- Provide visibility for a
business
- Provide additional sales
during holidays and special
events
34. Store within a store
- This concept benefits both
companies to attract more
customers
- Helps fill holes in product
offerings
35. Farmville
Businesses take advantage
of locations where
customers are, like the
internet and online games,
and provide them with
alternative ways to spend
money
36. Location and Retail Strategy
- Shopping behavior of
consumers
- Size of Target Market
- Uniqueness of Retail
Offering
38. Convenience Shopping
- Wants to exert little effort to
acquire product or service
- Wants convenient location
- Less concerned with price
- No hassles
39. Comparison Shopping
- General idea about product
or service
- No strong brand preference
- No strong retailer
preference
41. Size of Target Market
For most retailers, the size of the target market and the location of the highest density of their
target market will help determine where their business should be located.
- Estimate max # of customers eligible
to purchase product or service
- Estimate percentage of potential
customers
- Estimate # times customers could
purchase the product or service in a
year
- Estimate highest density of target
market
42. Uniqueness of Retail Offering
- Location doesn’t matter as
much because the product
is that important or unique
