Page 54 - DMGT552_VISUAL_MERCHANDISING

Unit 3: Image Mix

 Responsiveness of the Landlord: Directly related to the appearance of a retail location is Notes
the responsiveness of the landlord to the individual merchant’s needs. Unfortunately,
some landlords actually hinder the operation of their tenants’ business by restricting the
placement and size of signs, renting adjacent spaces to incompatible or directly competing
stores, and forgoing maintenance and repairs. By these actions, landlords can cripple a
retailer’s attempts to increase business. In addition to speaking to existing tenants, you
should talk to previous tenants of the same location. Ask them if they would become
tenants of this landlord again.
 Renegotiating a Lease: When times are good and retailers are optimistic, they sometimes
sign leases that come back to haunt them in later years. Renegotiating a lease once it has
been signed is difficult to do, but attempts to do so must be made under certain circumstances.
Prolonged downturns in the economy can result in a drastic drop in sales. This puts
occupancy costs in the danger zone where it is no longer profitable to remain in business.

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Caution Before approaching the landlord for rent relief, you must be prepared with a list
of actions you have taken to increase sales and reduce operating expenses. This may
include such things as:
 Increased advertising.

 Reduction in wages and staff hours.
 Reduction in all other operating expenses.
 Revised merchandise mix to attract new customers.
 Current, professionally prepared financial statements indicating your losses.

3.1.4 Site Selection

With the advent of new retail formats in India such as planned shopping centres and malls
emergence of freestanding department stores, hypermarkets, etc., and further development of
traditional business districts and other unplanned shopping locations as discussed earlier, a
retailer is presented with a wider choice of locations. Consideration of all the options keeping
in view the product mix, customer profile, and overall business model presents an enormous
challenge. A retailer has to consider the following factors while selecting a site:
 Kind of products sold
 Cost factor

 Competitor’s location
 Ease of traffic flow and accessibility
 Parking and major thoroughfares

 Market trends
 Visibility
Kind of products sold: For stores dealing in convenience goods the quantity of traffic is most
important. The corner of an intersection, which offers two distinct, traffic streams and a large
window display area, is usually a better site than the middle of a block. Convenience goods are
often purchased on impulse from easily accessible stores. For stores dealing in shopping goods,
the quality of the traffic is more important.

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