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RETAIL MARKETING
LECTURER: VALERIA VOLPONI Valeriaelisabetta volponi@gmail com Valeriaelisabetta.volponi@gmail.com

Store location & assessment of market potential

Aims

of the lesson:

Understand

how and on what basis the store location policy is developed the importance of the location decision to the retailer retailers s marketing strategy the spatial characteristics of sites within different locations

Understand

Analyse

The importance of location in the retailers marketing plan

Choosing The

a location is CRITICAL

location determines the type and number of people the store will attract locations provide easy access to large number of target consumers and increase potential sales a slight difference in location can have a significant impact on the market

Good

Even

Location policy principles

A

definition: outline that translates the retailers marketing strategy into a concrete policy policy, sensitive to the SPATIAL PATTERN OF DEMAND and the AVAILABILITY OF DESIDERABLE SITES

It

targets the retailers investments toward specific locations and market areas

The process of store location

It

starts with the analysis of the retailers marketing strategy and an understanding of the target market

This

decision must be consistent with the firms overall strategy

The process of store location

Next, the

firm must analyse the spatial aspects of different geographical market areas: steps ANALYSIS

Three

REGIONAL AREA SITE

ANALYSIS

EVALUATION

1 Regional analysis 1.
Identification

of regional markets: cities, towns, metropolitan areas in which to locate new stores

The

retailer is concerned here whit regional variations in demands for goods and services and with variations in the level of retail competition compares regional demand and supply, and then ranks regional areas according to their potential

He

2 Area analysis 2.
The

population characteristics and the level of retail activity may vary considerably between areas within a city or town analysis focuses on the IMMEDIATE area surrounding potential sites d demographic hi and d socio i economics i characteristics of the population surrounding each site must be carefully y evaluated will ultimately determine the sales potential of the site

Area The Th

They

3 Site evaluation 3.
Its

the final step, which focuses on the characteristics of the sites at which a new store may be located characteristics of each site are analysed with respect to FLOW

The

TRAFFIC

ACCESSIBILITY COMPATIBILITY

3 Site evaluation 3.
Compatibility The

is one of the biggest issues

principle of compatibility requires that theres no interruption in shopper traffic and that customer interchange must be at a maximum maximum business potential is available in location where the compatibility principle operates business are compatible, others are not

The

Some

3 Site evaluation 3.
Does

business A next door help business B? Or does it harm? Or does it apparently have no effect on business B? centres & brand mix

Shopping A

high degree of compatibility exists between two business which, because of their proximity, achieve more sales together than they would if separated ATTRACTION = SHOPPER ATTRACTION

CUMULATIVE

An example
North

East Ohio retail development

http://planning.co.cuyahoga.oh.us/retail/report.ht

ml

A risky business
The

greatest risk in opening a new outlet is that it will never achieve its sales potential location problem can be divided into two distinct tasks: general evaluation of the potential available in a competitive market the market contain enough potential profitably to support an additional store?

The

1. A

Does

A risky business
2. It

involves the specific delineation of the potential market, market in terms of the exact location for retailers sufficient potential, where is the best location to serve the available potential?

Given

Few things which are not so obvious

Since

each type of store has a unique target market market has its own location requirements

.each Home

improvement centres rely on home owners

Supermarkets

are more concerned with the general level of population childrens clothing store requires careful attention to the number of families

Location & marketing strategies

The

location policies of service retailers differ also because of differences in their marketing strategies

RESTAURANTS High Fast

class = High income neighbourhoods

food restaurants: focused on lunchtime go for busy commercial areas, areas others serve travellers and locate near roads, airports, and tourist spots

Index of retail saturation

It

is possible to calculate the amount of retail sales available in any geographical area, area with reasonable accuracy is also possible to quantify certain characteristics of retail facilities in any geographical area two factors can be combined to form an index of retail saturation

It

These

Index of retail saturation

Market classification scheme

Site selection & evaluation

Site

evaluation systematically examines the characteristics of each site to determine their feasibility as locations for new stores

Site evaluation criteria checklist

1. TRAFFIC Number Number Access

FLOW AND ACCESSIBILITY

& types of vehicles & types of pedestrians

to major roads of mass transit

Availability Quality

of streets whithin the area

Site evaluation criteria checklist

2. RETAIL Number

STRUCTURE

of competitors in area of other stores to business area retail promotion

Similarity Proximity

Collaborative

Site evaluation criteria checklist

3. SITE

CHARACTERISTICS number of car parking spaces

Available Distance Visibility Ease

of store to car park of site

of entrance and exit image of the area

Public

Site evaluation criteria checklist

4. LEGAL Type

AND COST FACTORS

of zoning of leasing

Length Local

authority responsibility

Case study: Tesco Clapham Common

Discuss

why, in your opinion, the residents are opposed to the Tesco plan despite Tesco Tescos s aim of developing an area it claims to be a derelict site would you consider to be the major attraction of this location to Tesco? ending or not?

What

Happy

Retail architecture: formats

A

multichannel fashion system

Ten

years ago: limited choice single branded stores or department stores approach to fashion

Today: mature, frivolous, nomad

Consumer

want to buy what they want, when and where they want & virtual channels

Real

Retail architecture: formats

Single

branded stores stores stores

Flagship

Department Temporary Internet

& guerrilla stores

Single branded stores - Boutique

Most They

typical choice for haute couture brands

set the brands presence in the most iconic and famous streets of the world brands choose emerging areas District New York

Emerging

Meatpacking

Ticinese, Milan Islington, London

The most expensive streets in the world

2010, 2010 report Avenue

by Colliers International

des Champs-Elysees, p y , Paris A two percent increase to $1,256 a square foot

The most expensive streets in the world

Fifth The

Avenue Avenue, New York

average g annual rent fell 10.7 p percent from a year earlier to $1,250 a square foot

The most expensive streets in the world

Russell

Street, Street Hong Kongs Causeway

Bay district
Rents

climbed 1.3 p percent to $1,205 a square foot

Single branded stores

Limited One

space: 100 mq to 500 mq

level or rectangular plan

Squared One

to three windows

Single branded stores

Traditional Relax

layout: entrance on new items

area

Visual

concept very classic, yellow, beige, li ht grey light intent is to transmit luxury and exclusivity

The

Single branded stores

The

risk i k is i lack of ide identity tit basic c use eo of visual merchandising ec g are vital

( (Too) oo)

Salespersons

Single branded stores

Brand

should stress the symbolic elements of the merchandise assortment store must be an experience provider

The

Flagship stores

When

a brand has reached an important critical mass it can decide to go for a single branded store bigger than a boutique display the entire collection

They More

than one level level, architectures are usually spectacular, like the location is space for brand extension

There

Flagship stores

Famous

architects are involved in the are not the centre of the store

project
Dresses Its It A

a 100% brand b d experience i

full immersion in the brand values

38

RALPH LAUREN
Layout: 4 floors. Organised to increase store traffic: Polo Collection (the most sold, sold and less expensive), expensive) is on the lower ground Entrance on seasonal collections and mens wear There was a floor dedicated to home collection, now closed

Ralph Lauren wants to transmit a concept, an idea: your home in the Hamptons or Aspen, Aspen rebuilt in Via Montenapoleone in Milan. Milan A problem solving approach, that gives suggestions and a style easy to copy Visual merchandising is adjusted according to seasons Paris: a step forward in customer service, with the opening of the first Ralph Lauren Restaurant. Country stile ambiance, mixed i d with ith a taste t t of f the th old ld times ti , high hi h class l cuisineand ii d the th meat served comes from the designers ranch in Colorado.

AVOCA, GRAFTON STREET, DUBLIN

Layout: y 4 floors Two different areas for food: lower ground (a way to increase store traffic) with a bakery and a gourmet supermarket and top floor, with a cosy restaurant High standard made in Ireland clothes and accessories, set in rooms completely furnished. Every detail is studied to confere the store a unique, unique coherent image

40

BARBIE WORLD, SHANGHAI

3.300squaremetres,4floors SPA,NailBar,hairdresser Adesigncentertodesign,in30minutes,yourBarbie Pcareastocustomizeyourdoll FashionRunway,tomakeyourcatwalkdressedasyourfavorite Barbie BarbieCafservingPinkMartini Martini,Barbietinis Barbietinis ,karaoke, karaoke pink chocolates

41

Department stores

From

2 2.500 500 mq under the same roof

Everything y g It

was the easiest way to shop

They

are undergoing a radical process of rejuvenation boxes to GoogleStores

From reassuring

DEPARTMENT STORES
In the last 5 years this format is undergoing a precise change of approach to the merchandise mix High class brand, luxury brand, often sold exclusively in one store Deep assortments High quality private labels Higly attractive for the fashion world (before they were almost ignored) Layout organised in shops in shops, shops each one customized Due to this transformation, they managed to survive the economic crisis

Temporary & guerrilla stores

It Its s THE It It

trend

comes from fashion, but its extending g is the best way to test new concepts costs: rental and furnitures risks

Low

Zero

TEMPORARY & GUERRILLA STORES

At the beginning, temporary stores were very essential: rough walls, no visual merchandising, merchandising boxes on the floor, floor not recognisable from the outside Location is usually different from the highclass street Low investments Merchandise Mer handise mix mi is intentionally intentionall messy, mess to increase in rease store t b browsing i Merchandise mix is renewed every two weeks It is a very powerful mean of communication

Homework

Homework

Homework

Homework

Homework
Choose Try

a region (yours, Lombardy)

to make a ANALYSIS

REGIONAL AREA SITE

ANALYSIS

EVALUATION

For this new coffee shop. Focus on the IDENTITY OF THE STORE