Page 109 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes Before choosing a retail store location, define how you see your business, both now and in the
future.
1. What do your customers look like?

2. Can you visualize your building?
3. Do you know what you want to sell and what you want your business to be known for?
4. Have you determined how much retail space, storage area, or the size of the office you
need?
Without the answers to these basic questions, it will be hard to find the perfect location for
generating the maximum amount of profit for your retail store.

Type of Goods
Examine what kind of products you sell, as some goods will require certain types of locations.
Would your store be considered a convenience store, a specialty shop or a shopping store?

Convenience goods require easy access, allowing the customer to quickly make a purchase. A
mall would not be a good location for convenience goods. This product type is lower priced and
purchased by a wide range of customers.
Specialty goods are more unique than most products and customers generally won’t mind
travelling out of the way to purchase this type of product. This type of store may also do well
near other shopping stores.
A shopping store usually sells items at a higher price which are bought infrequently by the
customer. Furniture, cars and upscale clothing are examples of goods found at a shopping store.
Because the prices of theses items are higher, this type of customer will want to compare prices
before making a purchase. Therefore, retailers will do well to locate their store near like stores.

6.10 Trade Area Characteristics

Trade area analysis and mapping describe the characteristics of the area around a store or
network of stores. Without accurate trade area definitions, you cannot measure the key statistics
that impact a store’s performance.
Use trade area analysis to aid site selection and target marketing.
Trade area analysis and mapping tell you:

1. Where a store’s customers are coming from
2. How many customers you have in a trade area
3. Where to look for more customers

Benefits of Trade Area Analysis
1. Identify gaps or overlaps in the market coverage of your existing store network, and
make corrections by opening, closing or moving stores.

2. Make better site selection decisions by using characteristics of existing trade areas to
predict trade areas around potential locations.
3. Define a geographic area to analyze for market potential, market penetration, and
competitive threats.

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