Chap008 A

5th Edition PPT 8-1

Chapter 8 Site Location

McGraw-Hill/Irwin PPT 8-2 Retailing Management, 5/e Levy/Weitz:

Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

Retailing Strategy Human Resource Management Chapter 9

Retail Market and Financial Strategy Chapter 5, 6 Retail Locations Chapter 7 Site Locations Chapter 8 Information and Distribution Systems Chapter 10 PPT 8-3

Customer Relationship Management Chapter 11

Location Chapters • Chapter 7 – General Description of the Location Types – Advantages and Disadvantages of Different Location – Appendix – Terms and Condition Involved in Leasing Sites

• Chapter 8 – Considerations in Selecting Area for Locating Store – Issues in Evaluating Specific Sites PPT 8-4

Three Levels of Analysis

PPT 8-5

Trade Area Issues • Which Trade Areas Are Most Attractive for Locating Retail Outlets? • How Many Outlets to Locate in a Trade Area? – More Stores Increases Economies of Scale and Reduces Costs – More Stores also Results in More Cannibalization and Less Sales per Store

PPT 8-6

Factors Affecting Demand for a Region or Trade Area

PPT 8-7

Factors Affecting the Attractiveness of a Site • How Attractive Is the Site to the Retailer’s Target Market? – Match Between Trade Area Demographics and Retailer’s Target Market – Likelihood of Customers Coming to Location • Convenience • Other Attractive Retailers At Location Principle of cumulative attraction - a cluster of similar and complementary retailing activities will have greater drawing power. PPT 8-8

Convenience of Going to Site Accessibility • Road pattern and condition

• Natural and artificial barriers • Visibility • Traffic flow • Parking • Congestion • Ingress/egress PPT 8-9

Location Within a Center • In High Traffic Areas •Near Anchor •Center of Shopping Area • Near Stores Selling Complementary Merchandise •Clustering Specialty Stores Appealing to Teenagers • Better locations cost more PPT 8-10

Map of Dallas’ North Park Center

PPT 8-11

Estimating Demand for a New Location • Definition of the Trade Area – Primary, Secondary, Tertiary Zones

• Approaches for Estimating Demand – Analog Approach – Regression Approach – Huff Gravity Model

PPT 8-12

Trade Area

Primary zone - 60 to 65 percent of its customers Secondary zone - 20 percent of a store’s sales Tertiary zone - customers who occasionally shop at the store or shopping center

PPT 8-13

Factors Defining Trade Areas •Accessibility •Natural & Physical Barriers •Type of Shopping Area •Type of Store •Competition •Parasite Stores PPT 8-14

Oblong Trade Area Caused by Major Highways and Natural Boundaries

PPT 8-15

Sources of Information • Customer Spotting • Census Data • Geodemographic Information Systems – ACORN • Information on Competition – Yellow Pages PPT 8-16

Customer Spotting Purpose: to spot, or locate, the residences of customers for a store or shopping center. How to obtain data: • credit card or checks • customer loyalty programs • manually as part of the checkout process • automobile license plates PPT 8-17