Lecture Retailing management (6/e) - Chapter 7: Retail locations. This chapter presents the following content: Elements in retail mix, why is store location important for a retailer? Types of retail locations, unplanned retail locations, central business district,...
Chapter Retail Locations McGrawHill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGrawHill Companies, Inc. All rights reserved 7-2 Retailing Strategy Human Resource Management Chapter Retail Market and Financial Strategy Chapter 5, Retail Locations Chapter Site Locations Chapter Information and Distribution Systems Chapter 10 Customer Relationship Management Chapter 11 Elements in Retail Mix Location Strategy Customer Service Store Display Merchandise And Design Assortment Communication Mix Pricing 7-3 What Are the Three Most Important Things in Retailing? 7-4 Location! Location! Location! Eddie Tan/Life File/Getty Images 7-5 Why is Store Location Important for a Retailer? • Location is typically prime consideration in customer’s store choice • Location decisions have strategic importance because they can help to develop sustainable competitive advantage • Location decisions are risky: invest or lease? F Schussler/PhotoLink/Getty Images Types of Retail Locations 7-6 • Free Standing Sites • City or Town Locations – Inner City – Main Street • Shopping Centers – Strip Shopping Centers – Shopping Malls • Other Location Opportunities PhotoLink/Getty Images 7-7 Types of Locations 7-8 Unplanned Retail Locations Freestanding Sites – location for individual store unconnected to other retailer Advantages: Convenience High traffic and visibility Modest occupancy cost Separation from competition Few restrictions The McGraw-Hill Companies, Inc./Andrew Resek, photographer JCPenney, Sears, Walgreens are shifting to stand alone locations 7-9 Unplanned Retail Locations Merchandise Kiosks – small temporary selling stations located in walkways of enclosed malls, airports, train stations or office building lobbies Kent Knudson/PhotoLink/Getty Images City or Town Locations 710 Gentrification is bringing population back to the cities Advantage to Retailers: •Affluence returned •Young professionals •Returned empty-nesters •Incentives to move provided by cities •Jobs! •Low occupancy costs •High pedestrian traffic The McGraw-Hill Companies, Inc./Andrew Resek, photographer Relative Advantages of Major Retail Locations Location City Issues Strip Center Shopping Mall Free Standing Large size draws people to area + - + - People working/living in area provided source of customers + + - - Source of entertainment/ recreation ? - + - Protection against weather - + - - 729 Relative Advantages of Major Retail Locations Location CBD Issues Strip Shopping Free Center Mall Standing - + + + + Planned shopping area/balanced tenant mix - - + - Parking - Occupancy costs (e.g rent) ? + + Security Long, uniform hours of operation - + + 730 Relative Advantages of Major Retail Locations Location City Issues Strip Shopping Center Mall Free Standing Pedestrian traffic + - + - Landlord + + - + Strong competition + + - + Tax incentives ? ? ? ? control 731 Other Retail Location Opportunities 732 Mixed Use Developments Airports Resorts Hospitals Store within a Store Royalty-Free/CORBIS 733 Alternative Locations Mixed Use Developments MXDs Rob Melnychuk/Getty Images Hotels Office Buildings D Falconer/PhotoLink/Getty Images Civic Centers Skip Nall/Getty Images Alternative Locations Airports Airports: Why wait with nothing to do? Kim Steele/Getty Images Rents are 20% higher than malls Sales/sqft are 3-4 times higher than malls Best airports are ones with many connecting flights 734 Alternative Locations 735 Resorts Captive audience Well-to-do customer Customers have time to shop Royalty-Free/CORBIS Alternative Locations 736 Hospitals Patients cannot leave Gifts are available Royalty-Free/CORBIS 737 Matching Location to Retail Strategy • Department Stores Regional Mall • Specialty Apparel Central Business District, Regional Malls • Category Specialists Power Centers, Free Standing • Grocery Stores Strip Shopping Centers • Drug Stores Stand Alone 738 Shopping Situations Minimize the customer’s effort to get the product or service by locating store close to where customers are located The McGraw-Hill Companies, Inc./Andrew Resek, photographer Convenience Shopping Shopping Situations 739 Comparison Shopping Customers have a good idea of what type of product they want, but don’t have a strong preference for brand, model or retailer Typical for furniture, appliances, apparel, consumer electronics, hand tools and cameras Ryan McVay/Getty Images Category Specialists 740 Consumers can see almost all brands and models in one store The McGraw-Hill Companies, Inc./Andrew Resek, photographer Shopping Situations 741 Specialty Shopping Customers know what they want Designer labels Convenient location matters less The McGraw-Hill Companies, Inc./Andrew Resek, photographer Environmental Issues 742 “Above-ground” risks - such as asbestos-containing materials or lead pipes used in construction Hazardous materials - e.g dry cleaning chemicals, motor oil, that have been stored in the ground Retailers’ Protection Stipulate in the lease that the lessor is responsible for removal and disposal of this material if it’s found Retailer can buy insurance that specifically protects it from these risks Other Legal Issues Zoning and Building Codes Zoning determines how a particular site can be used Building codes determine the type of building, signs, size, type of parking lot, etc that can be used Signs Restrictions on the use of signs can also impact a particular site’s desirability Licensing Requirements Some areas may restrict or require a license for alcoholic beverages 743 .. . 7- 2 Retailing Strategy Human Resource Management Chapter Retail Market and Financial Strategy Chapter 5, Retail Locations Chapter Site Locations Chapter Information and Distribution Systems Chapter. .. working/living in area provided source of customers + + - - Source of entertainment/ recreation ? - + - Protection against weather - + - - 72 9 Relative Advantages of Major Retail Locations Location... Center Mall Standing - + + + + Planned shopping area/balanced tenant mix - - + - Parking - Occupancy costs (e.g rent) ? + + Security Long, uniform hours of operation - + + 73 0 Relative Advantages