Chapter 7: Retail Locations

1. Chapter 7: Retail Locations Presentation by Shaina Lacher, Milton Law, and Matthew Sullivan

2. Retail Locations: Chapter 7 Section 3: Other Locations,Location and RetailStrategy, and LegalConsiderations Matthew Sullivan

3. What types of locations are available to retailers? • What are the relative advantages of each location type? • Why are some locations particularly well suited to specific retail strategies? • Which types of locations are growing in popularity with retailers? Questions:

4. Store location is most often the first consideration in a store choice • Having a good location increases chances of developing a strong sustainable competitive advantage • Location decisions can be risky and should be well-thought out The Importance of Store Location

5. Size of the trade area • Occupancy cost of the location • Pedestrian and vehicle customer traffic location • Restrictions on operations by property managers • Convenience of location for customers Trade area: the geographic area that encompasses most of the customers who would patronize a specific retail site Process of Choosing Particular Locations

6. - Types of locations • Unplanned retail locations Milton Law Section 1

7. Freestanding Sites such as outparcels and merchandise kiosks • City or Town Locations such as central business districts, main streets, and inner city locations Types of Retail Locations

8. Advantages Disadvantages Limited trade area when not around nearby retailers Higher Occupancy costs that strip centers Usually located where there is little pedestrian traffic • Convenience for customers • High vehicular traffic and visibility • Modest occupancy costs • Separation from competition Advantages and Disadvantagesof Freestanding Locations

9. Retail locations for an individual, isolated store unconnected to other retailers Outparcels Merchandise Kiosks Freestanding Sites

10. Small selling spaces, typically located in the walkways of enclosed malls, airports, train stations, or office building lobbies. Merchandise kiosks

11. Market Analysis Model

12. Advantages Disadvantages Traffic is limited due to congestion Parking problems reduce consumer convenience • Lower occupancy costs • Higher pedestrian traffic City or Town Locations

13. Advantages Disadvantages - High security required - Shoplifting - Parking is poor - Evenings and weekends are slow - Draws people during business hours - Heavy public transportation - Pedestrian traffic - Residential area as well Central Business Districts(CBD)

14. Occupancy costs are generally lower than CBD’s • Fewer people are employed • Smaller selection due to fewer stores • Range of entertainment is usually smaller • City planning sometimes restrict store operations Main Streets vs. CBD’s

15. Retailers here achieve higher sales volume and higher margins, thus producing higher profits • Redevelopments in inner cities can cause increased traffic and parking difficulties, causing them to be controversial High density urban areas with higher unemployment and lower median incomes than surrounding areas Inner City

16. Shopping centers Shaina Lacher Section 2

17. Advantages Disadvantages Limited trade area Lack of entertainment No protection from weather • Convenient locations • Easy parking • Low occupancy costs

18. Examples • Target • Costco • Lowe’s • Sports Authority • Toys “R” Us Consist primarily of collections of big box retail stores Power Centers

19. Regional Malls Super Regional Malls More than 1 million square feet Less than 1 million square feet Shopping Malls

20. Advantages Disadvantages Occupancy costs are generally higher Mall control over business operations Competition can be intense • Wide variety of stores • Wide assortment of merchandise • Shopping and entertainment • No inclement weather • Uniform hours of operation • Attracts many shoppers Shopping Malls

21. Mall managers try to make malls more of an enjoyable experience in an effort to keep people shopping as long as possible • Common areas • Family lounges • Great food • Playgrounds • Entertainment Enhancing the Mall Experience

22. CORPUS CHRISTI, TX – La Palmera Mall Redevelopment Mall renovations and redevelopment

23. Advantages Disadvantages Less retail space Smaller trade areas Attract fewer customers Shopping centers with an open-air configuration of specialty stores, entertainment, and restaurants with design ambience and amenities • Ease of parking • Relaxed open-air environment • Pedestrian traffic tends to be higher • Occupancy costs and operating restrictions are less Lifestyle Centers

24. Composed mainly of upscale apparel shops, boutiques, and gift shops carrying selected fashions or unique merchandise of high quality and price Stores in Phipps Plaza • Tiffany • Gucci • Max Mara • Giorgio Armani • Tommy Bahama’s Fashion/Specialty Centers

25. Shopping centers that contain mostly manufacturers’ outlets Las Vegas Outlet Center • Strong entertainment component • Becoming more popular outside the United States • Tourism is important for outlet centers Outlet Centers

26. Shopping centers that typically employ a unifying theme reflected in the individual shops, design, and to some extent their merchandise • Located in places of historic interests or for tourists • Anchored by restaurants and entertainment facilities • Generally targeted at tourists, they may also attract local customers • A common element of these centers is entertainment, although some rely solely on the shopping experience Theme/Festival centers

27. Combines enclosed malls, lifestyle centers, and power centers St. John’s Town Center, Jacksonville, FL Omnicenters are becoming more popular in the U.S. partly from the desire of tenants for lower common-area maintenance charges and the growing tendency of consumers to cross-shop. Omnicenters

28. Mizner Park, Boca Raton, FL • Offer an all-inclusive environment so that consumers can work, live, and play in a proximal area • Combine several different uses into one complex, including shopping centers, office towers, hotels, residential complexes, civic centers, and convention centers Mixed Use Developments

29. Other Locations • Location and RetailStrategy • LegalConsiderations Matthew Sullivan Section 3

30. Airports • Temporary or pop-up stores • Resorts • Store within a store Other Location Opportunities

31. Airport Apple store • High pedestrian traffic • Sales per square foot are higher than mall stores • Rent is higher • Hours are longer • Inconvenient location for workers means higher wages Airports

32. Target pop-up store • Good for businesses trying to create a little hype • Good introduction for new stores or products • Provide visibility for a business • Provide additional sales during holidays and special events Temporary Locations (pop-up stores)

33. St. Regis Aspen Resort, CD • Captive audiences • Wealthy customers • People with time on their hands Resorts

34. Occurs when a manufacturer has its own store and salespeople inside a retailer store • This concept benefits both companies to attract more customers • Helps fill holes in product offerings Store within a store

35. Social Networking Game Businesses take advantage of locations where customers are, like the internet and online games, and provide them with alternative ways to spend money Farmville

36. Factors that affect location choice • Shopping behavior of consumers • Size of Target Market • Uniqueness of Retail Offering Location and Retail Strategy

37. 3 Shopping Behaviors • Convenience shopping • Comparison shopping • Specialty shopping Shopping Situations

38. Shopper Mentality • Wants to exert little effort to acquire product or service • Wants convenient location • Less concerned with price • No hassles Convenience Shopping

39. Shopper Mentality • General idea about product or service • No strong brand preference • No strong retailer preference Comparison Shopping

40. Shopper Mentality • Knows what they want • Accepts no substitute • Strong loyalty to product or brand Specialty Shopping

41. Estimates to determine size of target market • Estimate max # of customers eligible to purchase product or service • Estimate percentage of potential customers • Estimate # times customers could purchase the product or service in a year • Estimate highest density of target market For most retailers, the size of the target market and the location of the highest density of their target market will help determine where their business should be located. Size of Target Market

42. Consumer mentality • Location doesn’t matter as much because the product is that important or unique Uniqueness of Retail Offering

43. Environmental Issues Zoning and Building Codes Sign restrictions Licensing requirements • Above ground risks • Hazardous materials Legal Considerations

44. Above-Ground Waste Hazardous Materials Environmental Issues

45. Signs Licensing Zoning and Building Codes