Page 110 - DMGT550_RETAIL_MANAGEMENT

Unit 6: Financial Strategy and Retail Locations

4. Become more efficient and effective at target marketing by reaching out only to those Notes
customers and prospects in a store’s trade area.
5. Use as a key input into customer profiling

Factors that Impact Trade Areas
Analyzing trade areas should be performed regularly to provide key metrics for improving
sales and marketing performance.

Adding new stores to your network will cause the trade area of nearby stores to change. In a
saturated market, or if stores are placed too close to one another, cannibalization can occur.
A change to product offerings will impact the trade area, as will shifts in population and
demographics, the existence of competitors, changes to highways and roads, and the addition of
other businesses that attract people to the area.

A trade area analysis typically includes:
1. Mapping existing customers in relation to store locations
2. Calculating distance/drive times from customers to store locations
3. Determining all variables that define and impact your trade areas

4. Developing a model for predicting trade areas around new sites
5. Using the results as an input into analyzing market potential or customer profiling or to
help make decisions about site selection or targeted marketing.

Did u know? A trade area is a neighbouring geographic area that accounts for the majority
of a store's sales and customers.

Self Assessment

Fill in the blanks:
12. Dead end roads mean there will be less traffic moving back and forth in front of your
................... .
13. ................... goods require easy access, allowing the customer to quickly make a purchase.
14. ................... goods are more unique than most products and customers generally won’t
mind traveling out of the way to purchase this type of product.
15. A ................... store usually sells items at a higher price which are bought infrequently by
the customer.

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Case Study Retail Enterprise Business Management

lear visibility into its stores’ revenue-generating operations, a window into its
”behind the scenes” operations and a way to bring everything together while
Cretaining the ability to drill down right down to an individual store - These were
a leading Retail establishment’s principal needs when it approached Sentini Technologies

Contd....

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