Presentation by Shaina Lacher, Milton Law, and Matthew Sullivan

Section 3: Other Locations, Location and Retail Strategy, and Legal Considerations Matthew Sullivan Retail Locations: Chapter 7

* 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?

-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

- 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

- Types of locations - Unplanned retail locations Milton Law

-Freestanding Sites such as outparcels and merchandise kiosks -City or Town Locations such as central business districts, main streets, and inner city locations

- Convenience for customers - High vehicular traffic and visibility - Modest occupancy costs - Separation from competition - Limited trade area when not around nearby retailers - Higher Occupancy costs that strip centers - Usually located where there is little pedestrian traffic

Retail locations for an individual, isolated store unconnected to other retailers OutparcelsMerchandise Kiosks

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

- Lower occupancy costs - Higher pedestrian traffic - Traffic is limited due to congestion - Parking problems reduce consumer convenience

- Draws people during business hours - Heavy public transportation - Pedestrian traffic - Residential area as well - High security required - Shoplifting - Parking is poor - Evenings and weekends are slow

- Occupancy costs are generally lower than CBDs - Fewer people are employed - Smaller selection due to fewer stores - Range of entertainment is usually smaller - City planning sometimes restrict store operations

- 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

- Shopping centers Shaina Lacher

- Convenient locations - Easy parking - Low occupancy costs - Limited trade area - Lack of entertainment - No protection from weather

- Target - Costco - Lowes - Sports Authority - Toys R Us Consist primarily of collections of big box retail stores

Less than 1 million square feetMore than 1 million square feet

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

- Common areas - Family lounges - Great food - Playgrounds - Entertainment

- Ease of parking - Relaxed open-air environment - Pedestrian traffic tends to be higher - Occupancy costs and operating restrictions are less - 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

- Tiffany - Gucci - Max Mara - Giorgio Armani - Tommy Bahamas

-Strong entertainment component -Becoming more popular outside the United States -Tourism is important for outlet centers

- 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

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.

- 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

- Other Locations - Location and Retail Strategy - Legal Considerations Matthew Sullivan

- 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

- 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

- Captive audiences - Wealthy customers - People with time on their hands

- This concept benefits both companies to attract more customers - Helps fill holes in product offerings

Businesses take advantage of locations where customers are, like the internet and online games, and provide them with alternative ways to spend money

- Shopping behavior of consumers - Size of Target Market - Uniqueness of Retail Offering

- Convenience shopping - Comparison shopping - Specialty shopping

- Wants to exert little effort to acquire product or service - Wants convenient location - Less concerned with price - No hassles

- General idea about product or service - No strong brand preference - No strong retailer preference

- Knows what they want - Accepts no substitute - Strong loyalty to product or brand

- 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.

- Location doesnt matter as much because the product is that important or unique

- Above ground risks - Hazardous materials - Sign restrictions - Licensing requirements