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Chapter4RetailLocationsElementsinRetailMixCustomerServiceMerchandiseAssortmentPricingCommunicationMixStoreDisplayAndDesignLocationStrategy2WhatAretheThreeMostImportantThingsinRetailing?Location!Location!Location!EddieTan/LifeFile/GettyImages

3WhyisStoreLocationImportantforaRetailer?Locationistypicallyprimeconsiderationincustomer’sstorechoice.Locationdecisionshavestrategicimportancebecausetheycanhelptodevelopsustainablecompetitiveadvantage.Locationdecisionsarerisky:investorlease?F.Schussler/PhotoLink/GettyImages

4TypesofRetailLocationsFreeStandingSitesCityorTownLocationsInnerCityMainStreetShoppingCentersStripShoppingCentersShoppingMallsOtherLocationOpportunitiesPhotoLink/GettyImages

5UnplannedRetailLocations

FreestandingSites–locationforindividualstoreunconnectedtootherretailer

Advantages:ConvenienceHightrafficandvisibilityModestoccupancycostSeparationfromcompetitionFewrestrictionsTheMcGraw-HillCompanies,Inc./AndrewResek,photographer

JCPenney,Sears,Walgreensareshiftingtostandalonelocations6UnplannedRetailLocations

MerchandiseKiosks–smalltemporarysellingstationslocatedinwalkwaysofenclosedmalls,airports,trainstationsorofficebuildinglobbies.KentKnudson/PhotoLink/GettyImages

7CityorTownLocations

Gentrificationisbringingpopulationbacktothecities.TheMcGraw-HillCompanies,Inc./AndrewResek,photographer

AdvantagetoRetailers:AffluencereturnedYoungprofessionalsReturnedempty-nestersIncentivestomoveprovidedbycitiesJobs!LowoccupancycostsHighpedestriantraffic8CentralBusinessDistrictDrawspeopleintoareasduringbusinesshoursHubforpublictransportationPedestriantrafficResidentsHighsecurityrequiredShopliftingParkingispoorEveningsandweekendsareslowAdvantagesDisadvantagesSpikeMafford/GettyImages

9TheMostExpensiveShopping

StreetsintheWorldStreet

LocationCost/sqfoot/yearFifthAvenue(48thto58thSt.)57thStreet(5thAve.toMadisonAve.)OxfordStreetMadisonAvenue(57thto72ndSt.)Ave.desChampsElyseeNewYorkCityNewYorkCityLondonNewYorkCityParis$580$500$400$375$36010InnerCity

Innercityretailersachievehighsalesvolume,highermarginsandhigherprofits(c)BrandXPictures/PunchStock

Unmetdemandtops25%inmanyinnercitymarketsInnercitycustomerwantsbrandedmerchandise11ShoppingCentersShoppingCenterManagementControls:ParkingSecurityParkinglotlightingOutdoorsignageAdvertisingSpecialeventsforcustomersTheMcGraw-HillCompanies,Inc./AndrewResek,photographer

12TypesofShoppingCentersNeighborhoodandCommunityCenters(StripCenters)PowerCentersEnclosedMallsLifestyleCentersFashionSpecialtyCentersOutletCenters13NeighborhoodandCommunityCentersAttachedrowofstoresManagedasaunitOnsiteparkingTheMcGraw-HillCompanies,Inc./AndrewResek,photographer

14PowerCentersBigboxstoresPhotoLink/GettyImages

LimitedsmallspecialtystoresFree-standingstoresOpenairsetupAvailableparkingDesirableshoppingexperienceManylocatednearenclosedmallsLargetradeareasLowoccupancycostsConvenientModestvehicularandpedestriantraffic15TheLargestNorthAmericanShoppingMalls16MallofAmericaLocatednearMinneapolis,MNLargestmallintheUSEnoughpeopletoqualifyasthethirdlargestcityinMinnesotaHasmorethan42millionvisitorsayearMorepeoplevisitthanDisneyWorld,theGrandcanyonandGracelandcombinedDigitalVision/GettyImages

17AdvantagesandDisadvantagesofShoppingMallsAdvantages:ManydifferenttypesofstoresManydifferentassortmentsavailableAttractsmanyshoppersMainStreetfortoday’sshoppersNeverworryabouttheweatherComfortablesurroundingtoshopUniformhoursofoperationDisadvantages:OccupancycostsarehighTenantsmaynotlikemallmanagementcontrolofoperationsCompetitioncanbeintensePhotoLink/GettyImages

18ChallengetoMallsTimepressuredsocietymakesitimpracticaltowandermallsFashionapparelsoldinmallsexperiencinglimitedgrowthMallsaregettingoldandrundown–unappealingtoshopAnchortenantsaredecreasingduetoretailconsolidation19LifestyleCentersCourtesyofGeneralGrowthPropertiesPhotoprovidedbyICSCandusedwithpermissionofAspenGroveLifestyleCenter20StoresandRestaurantsatLifestyleCentersStarbucksPaneraBreadBedBath&BeyondAnnTaylorVictoria’sSecretEddieBauer

ColdwaterCreekBananaRepublicTheGapRestorationHardwareWilliams-SonomaPotteryBarn

Barnes&Noble/BordersDick’sSportingGoodsAeropostaleHallmarkJohnnyRockets21LifestyleCentersUsuallylocatedinaffluentresidentialneighborhoodsIncludes50Ksq.ft.ofupscalechainspecialtystoresOpen-airconfigurationDesignambienceandamenitiesUpscalestoresRestaurantsandoftenacinemaorotherentertainmentSmalldepartmentstoreformatmaybethere22FashionSpecialtyCentersUpscaleapparelshopsNeedtobeanchoredDécoriselegantTheMcGraw-HillCompanies,Inc./LarsA.Niki,photographer

23OutletCentersTheseshoppingcenterscontainmostlymanufacturersandretailoutletstoresCourtesyofBeall’s,Inc.24TradeoffBetweenLocationsRentTraffic

Therearerelativeadvantagesanddisadvantagestoconsiderwitheachlocation.25RelativeAdvantages

ofMajorRetailLocationsLocation City Strip Shopping FreeIssues CenterMall StandingLargesize + - + -drawspeopletoareaPeople + + - -working/livinginareaprovidedsourceofcustomersSourceof ? - + -entertainment/recreationProtection - - +-againstweather26RelativeAdvantages

ofMajorRetailLocationsLocation CBD Strip Shopping FreeIssues Center Mall StandingSecurity - - + -Long,uniform - + + +hoursofoperationPlanned - - + -shoppingarea/balancedtenantmixParking - + - +Occupancy ? + -+costs(e.g.rent)27RelativeAdvantages

ofMajorRetailLocationsLocation City Strip Shopping FreeIssues CenterMall StandingPedestrian + - + -trafficLandlord + + - +controlStrong + + - +competitionTax ? ?

?

?incentives28OtherRetailLocationOpportunities

Airports

Resorts

Hospitals

StorewithinaStoreRoyalty-Free/CORBIS

29AlternativeLocations

AirportsAirports:Whywaitwithnothingtodo?Rentsare20%higherthanmallsSales/sqftare3-4timeshigherthanmallsBestairportsareoneswithmanyconnectingflightsKimSteele/GettyImages

30AlternativeLocations

ResortsCaptiveaudienceWell-to-docustomerCustomershavetimetoshopRoyalty-Free/CORBIS

31AlternativeLocations

HospitalsPatientscannotleaveGiftsareavailableRoyalty-Free/CORBIS

32MatchingLocationtoRetailStrategyDepartmentStoresRegionalMallSpecialtyApparelCentralBusinessDistrict, RegionalMallsCategorySpecialistsPowerCenters, FreeStandingGroceryStoresStripShoppingCentersDrugStoresStandAlone33ShoppingSituations

ConvenienceShopping

Minimizethecustomer’sefforttogettheproductorservicebylocatingstoreclosetowherecustomersarelocatedTheMcGraw-HillCompanies,Inc./AndrewResek,photographer

34ShoppingSituations

ComparisonShoppingCustomershaveagoodideaofwhattypeofproducttheywant,butdon’thaveastrongpreferenceforbrand,modelorretailer.RyanMcVay/GettyImages

Typicalforfurniture

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