Retail Management Unit-4

Subject- Retail Management
Unit-4
Retail Location
 A retail location refers to the physical space where goods or services are
offered for sale directly to consumers.
 Location means being at right place at the right time.
Importance of Retail Location

 Good location is the key element for attracting customers to the outlet.
 A well located store makes supply distribution easier.
 Choosing a location that is easily accessible to the target market.
 Having a good location increases chances of developing a strong
sustainable competitive advantage.
 Selection of retail location is a long-term decision.
 It requires long -term capital investment.
Types of Retail Locations

1 Free standing sites/ Isolated stores –
 A freestanding location is a store located along a major traffic artery,
without any other competitive retailers around.
 The biggest advantage of such a location is that there is no competition
around.
 Due to this, rents are usually low and facilities like ample parking are
available.
2 City or town location/ unplanned business districts-

 Central Business District (CBD)- centre of the city
 Secondary Business District (SBD) -at intersection of two boundaries
(chauraha)
 Neighbourhood Business District (NBD)- for convenience product like
spa, drug store, general store
 Strip (string) shopping districts- having stores that are visible from the
road arranged in a long strip.
3 Planned shopping Centre –
 Shopping malls
 Speciality centres
 Airport mall
 Store within store
Factor Affecting Selection of Retail Location

 Pedestrian traffic-
-People coming and going on foot
-Foot traffic
 Vehicular traffic-
-The aggregation of vehicles coming and going in a particular locality.
 Parking facilities-
-Space to park vehicles
 Transportation-
- Easy transportation facility to reach at store who do not have cars
 Others-
-Types of goods sold
-Population characteristics
- Accessibility, visibility and traffic
-Competition and neighbours
-Location costs
- Personal factors
Steps Involved in Choosing a Retail Location
1 Know your target market
-Before you start looking for a location, you need to know who your ideal
customers are and where they live, work and shop.
- Marketer can use market research, customer surveys, and competitor analysis
to gather this information.
-Marketer want to find a location that is convenient, accessible, and appealing to
your target market.
- They also want to avoid areas that are saturated with similar or competing
businesses, unless you have a strong competitive advantage.
2 Consider your budget and goals
-Your location should fit your budget and your goals.
-Marketer need to consider how much rent, utilities, taxes, insurance, and
maintenance you can afford to pay.
- Marketer can use tools like cash flow projections, break-even analysis, and
return on investment to evaluate different locations.
3 Evaluate the physical features

-The physical features of your location can affect your store's layout, design,
functionality, and ambiance.
-Marketer need to consider the size, shape, condition, and visibility of your
location and also need to check the parking, security, and traffic regulations of
your location.
-Marketer should find a location that is suitable, safe, and attractive for your
store and your customers.
4 Research the local market

-The local market can influence your store's performance, reputation, and
opportunities and need to research the demographics, psychographics, and
spending habits of the local population.
-Marketer also need to analyse the trends, challenges, and opportunities of the
local economy and also want to find a location that has a high demand, low
competition, and favourable conditions for your store.
5 Negotiate the lease terms

-The lease terms can affect your store's flexibility, stability, and profitability.
-Marketer need to negotiate the rent, duration, renewal, termination, and
modification clauses of your lease and also need to review the rights,
responsibilities, and liabilities of both parties.
- Marketer should find a lease that is fair, clear, and beneficial for your store.
6 Test the location
-The final step is to test the location before you commit to it, they can use
methods like pop-up shops, market stalls, or online surveys to test the location's
appeal, demand, and feedback.
-Marketer can also visit the location at different times and days to observe the
customer traffic, behaviour and satisfaction and then finalise a location that
meets or exceeds your expectations and goals.
Measuring the Success of Location

Once the retail outlet is opened at the selected location, it is important to keep
track of how feasible was the choice of the location. To understand this, the
retail company carries out two types of location assessments −
1 Macro Location Evaluation
It is conducted at a national level when the company wants to start a retail

business internationally.
Under this assessment, the following steps are carried out:
 Detailed external audit of the market by analysing locations as macro

environment such as political, social, economic, and technical.
 Most important factors are listed such as customer’s level of spending,
degree of competition, availability of locations, etc.
2 Micro Location Evaluation
At this level of evaluation, the location is assessed against four factors namely:
 Population − Desirable number of suitable customers who will shop.

 Infrastructure − The degree to which the store is accessible to the
potential customers.
 Store Outlet − Identifying the level of competing stores (those which the
decrease attractiveness of a location) as well as complementary stores
(which increase attractiveness of a location).
 Cost − Costs of development and operation. High startup and ongoing
costs affect the performance of retail business.

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Subject- Retail Management

Importance of Retail Location

Types of Retail Locations

2 City or town location/ unplanned business districts-

Factor Affecting Selection of Retail Location

Steps Involved in Choosing a Retail Location

1 Know your target market

3 Evaluate the physical features

4 Research the local market

5 Negotiate the lease terms

Measuring the Success of Location

1 Macro Location Evaluation

It is conducted at a national level when the company wants to start a retail

Under this assessment, the following steps are carried out:

 Detailed external audit of the market by analysing locations as macro

2 Micro Location Evaluation

 Population − Desirable number of suitable customers who will shop.

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