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Retail Location Strategy

The document discusses retail location strategy and the importance of location decisions. It outlines three levels of location decision making - selecting a city, area within a city, and specific site. Key factors that influence these decisions are purchasing power, population trends, competition, access routes, and zoning regulations. The types of retail locations and how location varies for different goods is also covered. Trade area analysis and delineating primary, secondary, and tertiary zones is important. Site selection requires considering products, costs, traffic flow, parking, and market trends.

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84 views15 pages

Retail Location Strategy

The document discusses retail location strategy and the importance of location decisions. It outlines three levels of location decision making - selecting a city, area within a city, and specific site. Key factors that influence these decisions are purchasing power, population trends, competition, access routes, and zoning regulations. The types of retail locations and how location varies for different goods is also covered. Trade area analysis and delineating primary, secondary, and tertiary zones is important. Site selection requires considering products, costs, traffic flow, parking, and market trends.

Uploaded by

ayush mehra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Retail Location Strategy

PRESENTED BY-
VINIT RAHUL
M B A - I B 4 TH S E M
ROLL NO.-20
Location

 Most important ingredient for any business that


relies on customers.
 Can be Complex.
 High cost and little flexibility.
 Have a strong impact on Retailer’s Overall strategy.
Importance of Location Decision

 It is a major cost factor due to:


1. Involves large capital investment.
2. Affects transportation cost.
3. Affects human resources cost.
 It is a major revenue factor because it:
1. Affects the amount of customer traffic.
2. Affects the volume of business.
 Location is a broader concept, which denotes the
stores and its trading areas from where a majority of
its customers originate, while a site refers to the
specific building or part of building where a store is
located.
Levels of Location decision & Its Determining
Factors

 The Location decision based on three steps:


1. Selection of a city.
2. Selection of an area or type of location within a city.
3. Identification of a specific site.
Level of Location Decision

Selection of Area Within Site Decision


City City

•Size of the city’s trading •Customer attraction of •Adequacy and


area. shopping district. potential traffic.
•Population growth •Quantitative and qualitative •Complementary
trends. nature of competition. nature of adjacent
•Purchasing power and •Availability of access route. store.
distribution. •Nature of zoning regulation. •Adequacy of parking.
•Trade potential. •Direction of area expansion.
•Number, Size, Quality
of Competition.
Types Of Retail Locations

 3 types of Location:
1. Free-standing Locations
2. Unplanned Business District Centers.
3. Planned Shopping Centers.
Types of Consumer Goods and Location Decision

 Convenience Goods:
Products that carry a low unit price, purchased
frequently, bought by habit.
Eg.- Candy Bars, Cigarettes, milk, etc.

 Shopping Goods:
Products with a high unit price, are compared by the
customer on the basis of price, quality and features.
Eg.- Automobiles, Furniture.
 Speciality Goods:
Product with high unit price, and are bought
infrequently, requires special effort on the part of
customer to make the purchase, no substitutes is
considered.
Eg.- Precious Jewellery, Expensive perfume
Trading Area

 Geographic area from which a retailer draws


customers that account for the majority of store’s
sales.
 Trade area can be divided into two or three zones:
1. Primary Zone: Geographical area from which the
retail outlets derives 60-65% of its customers.
2. Secondary Zone: Geographical area generating
about 20% of an entire sale of the outlet.
3. Tertiary Zone: Outermost ring, draws the
remaining 10-15% customers who occasionally
shop at store.
Trade Area Analysis

 A thorough analysis of trade area is necessary to


estimate market potential, understand customer
profile, competition, develop merchandising plan an
focus promotional activities.
 GIS is used for trade area delineation and analysis.
 Market Potential:
In estimating the market demand potential, retailers
consider factors that are specific to their product
line. Some of the indicators are:
 Population Characteristics and its Trends.
 Purchasing Power and its Distribution.
 Business Climate.
 Competition.
Site Selection Analysis

 A retailer has to consider the following factors while


selecting a site:
 Kinds of Products sold.
 Cost Factor.
 Competitor’s Location.
 Ease of Traffic Flow and Accessibility.
 Parking and Major Thoroughfares.
 Market trends.
 Visibility.
Selection of a Particular Shopping Centre or
Market Area

 Merchants’ Association
 Landlord Responsiveness
 Zoning and Planning
 Lease Terms
 Building Layout.

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