CHAPTER 7: RETAIL

LOCATIONS

Presentation by Shaina Lacher, Milton Law,

and Matthew Sullivan
Retail Locations:
Chapter 7

Section
Section 3:
3:
Other
Other Locations,
Locations,
Location
Location and
and Retail
Retail
Strategy,
Strategy, and
and Legal
Legal
Considerations
Considerations
Matthew
Matthew Sullivan
Sullivan
 Questions:
* 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?
 The Importance of Store Location

-- Store
Store location
location is
is most
most often
often the
the
first
first consideration
consideration in
in a
a store
store choice
choice

-- Having
Having a
a good
good location
location increases
increases
chances
chances of
of developing
developing a
a strong
strong
sustainable
sustainable competitive
competitive advantage
advantage

-- Location
Location decisions
decisions can
can be
be risky
risky and
and
should
should be
be well-thought
well-thought out
out
Process of Choosing Particular Locations

- 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

the geographic
geographic area
area that
that encompasses
encompasses most
most of
of
the
the customers
customers who
who would
would patronize
patronize a
a specific
specific retail
retail site
site
 Section 1

- Types of locations
- Unplanned retail locations

Milton Law
 Types of Retail Locations

-- Freestanding
Freestanding Sites
Sites such
such as
as
outparcels
outparcels and
and merchandise
merchandise
kiosks
kiosks

-- City
City or
or Town
Town Locations
Locations such
such as
as
central
central business
business districts,
districts,
main
main streets,
streets, and
and inner
inner city
city
locations
locations
 Advantages and Disadvantages
of Freestanding Locations
Advantages Disadvantages

- Convenience
Convenience for
for customers
customers - Limited
Limited trade
trade area
area when
when
not
not around
around nearby
nearby retailers
retailers
- High
High vehicular
vehicular traffic
traffic and
and
visibility
visibility - Higher
Higher Occupancy
Occupancy costs
costs that
that
strip
strip centers
centers
- Modest
Modest occupancy
occupancy costs
costs
- Usually
Usually located
located where
where there
there
- Separation is
is little
little pedestrian
pedestrian traffic
traffic
Separation from
from competition
competition
 Freestanding Sites
Retail
Retail locations
locations for
for an
an individual,
individual, isolated
isolated store
store unconnected
unconnected to
to other
other retailers
retailers

Outparcels
Outparcels Merchandise
Merchandise Kiosks
Kiosks
 Merchandise kiosks
Small
Small selling
selling spaces,
spaces, typically
typically located
located in
in the
the walkways
walkways ofof enclosed
enclosed
malls,
malls, airports,
airports, train
train stations,
stations, or
or office
office building
building lobbies.
lobbies.
Market Analysis Model
 City or Town Locations

Advantages Disadvantages
- Lower
Lower occupancy
occupancy costs
costs - Traffic
Traffic is
is limited
limited due
due to
to
- Higher congestion
congestion
Higher pedestrian
pedestrian traffic
traffic
- Parking
Parking problems
problems reduce
reduce
consumer
consumer convenience
convenience
 Central Business Districts
(CBD)

Advantages Disadvantages

-- Draws
Draws people
people during
during -- High
High security
security required
required
business
business hours
hours -- Shoplifting
Shoplifting
-- Heavy
Heavy public
public transportation
transportation -- Parking
Parking is
is poor
poor
-- Pedestrian
Pedestrian traffic
traffic -- Evenings
Evenings and
and weekends
weekends are
are
-- Residential
Residential area
area as
as well
well slow
slow
Main Streets vs. CBD’s

- Occupancy costs are generally lower than CBD’s

- Fewer people are employed
- Smaller selection due to fewer stores
- Range of entertainment is usually smaller
- City planning sometimes restrict store operations
 Inner City
High
High density
density urban
urban areas
areas with
with higher
higher unemployment
unemployment and
and lower
lower median
median
incomes
incomes than
than surrounding
surrounding areas
areas

- 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
Section 2

- Shopping centers

Shaina Lacher
 Advantages Disadvantages

- Convenient
Convenient locations
locations - Limited
Limited trade
trade area
area
- Easy
Easy parking
parking - Lack
Lack of
of entertainment
entertainment
- Low
Low occupancy
occupancy costs
costs - No
No protection
protection from
from
weather
weather
 Power Centers
Consist
Consist primarily
primarily of
of collections
collections of
of big
big box
box retail
retail stores
stores

Examples

- Target
Target
- Costco
Costco
- Lowe’s
Lowe’s
- Sports
Sports Authority
Authority
- Toys
Toys “R”
“R” Us
Us
 Shopping Malls

Regional Malls Super Regional Malls

Less
Less than
than 1
1 million
million square
square feet
feet More
More than
than 1
1 million
million square
square feet
feet
 Shopping Malls

Advantages Disadvantages

- Wide
Wide variety
variety of
of stores
stores - Occupancy
Occupancy costs
costs are
are
- Wide generally
generally higher
higher
Wide assortment
assortment ofof
merchandise
merchandise - Mall
Mall control
control over
over business
business
-Shopping operations
operations
Shopping and
and entertainment
entertainment
- No
No inclement
inclement weather
weather
- Competition
Competition can
can be
be intense
intense
- Uniform
Uniform hours
hours of
of operation
operation
- Attracts
Attracts many
many shoppers
shoppers
Enhancing the Mall Experience
Mall
Mall managers
managers try
try to
to make
make malls
malls more
more of
of an
an enjoyable
enjoyable experience
experience in
in an
an effort
effort to
to
keep people shopping as long as possible
keep people shopping as long as possible

- Common
Common areas
areas
- Family
Family lounges
lounges
- Great
Great food
food
- Playgrounds
Playgrounds
- Entertainment
Entertainment
Mall renovations and redevelopment

CORPUS
CORPUS CHRISTI,
CHRISTI, TX
TX –– La
La
Palmera
Palmera Mall
Mall Redevelopment
Redevelopment
 Lifestyle Centers
Shopping
Shopping centers
centers with
with an
an open-air
open-air configuration
configuration of
of specialty
specialty stores,
stores, entertainment,
entertainment, and
and restaurants
restaurants
with
with design
design ambience
ambience and
and amenities
amenities

Advantages Disadvantages

- Ease
Ease of
of parking
parking - Less
Less retail
retail space
space
- Relaxed
Relaxed open-air
open-air - Smaller
Smaller trade
trade areas
areas
environment
environment - Attract
Attract fewer
fewer customers
customers
- Pedestrian
Pedestrian traffic
traffic tends
tends to
to
be
be higher
higher
- Occupancy
Occupancy costs
costs and
and
operating
operating restrictions
restrictions are
are
less
less
 Fashion/Specialty Centers

Composed
Composed mainly
mainly of
of upscale
upscale apparel
apparel shops,
shops, boutiques,
boutiques, and
and gift
gift shops
shops carrying
carrying selected
selected fashions
fashions or
or
unique merchandise of high quality and price
unique merchandise of high quality and price

Stores in Phipps Plaza

- Tiffany
Tiffany
- Gucci
Gucci
- Max
Max Mara
Mara
- Giorgio
Giorgio Armani
Armani
- Tommy
Tommy Bahama’s
Bahama’s
 Outlet Centers
Shopping
Shopping centers
centers that
that contain
contain mostly
mostly manufacturers’
manufacturers’ outlets
outlets

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

Las Vegas Outlet

Center
 Theme/Festival centers
Shopping
Shopping centers
centers that
that typically
typically employ
employ a
a unifying
unifying theme
theme reflected
reflected in
in the
the individual
individual
shops, design, and to some extent their merchandise
shops, design, and to some extent their merchandise

- Located
Located in
in places
places of
of historic
historic
interests
interests or
or for
for tourists
tourists
- Anchored
Anchored by by restaurants
restaurants
and
and entertainment
entertainment facilities
facilities
- Generally
Generally targeted
targeted atat
tourists,
tourists, they
they may
may also
also
attract
attract local
local customers
customers
- A
A common
common element
element of of these
these
centers
centers is
is entertainment,
entertainment,
although
although some
some rely
rely solely
solely on
on
the
the shopping
shopping experience
experience
 Omnicenters
Combines
Combines enclosed
enclosed malls,
malls, lifestyle
lifestyle centers,
centers, and
and power
power centers
centers

St. John’s Town

Center, Jacksonville,
FL
Omnicenters
Omnicenters areare becoming
becoming
more
more popular
popular inin the
the U.S.
U.S.
partly
partly from
from the
the desire
desire of
of
tenants
tenants for
for lower
lower common-
common-
area
area maintenance
maintenance charges
charges
and
and the
the growing
growing tendency
tendency
of
of consumers
consumers toto cross-
cross-
shop.
shop.
 Mixed Use Developments

- Offer
Offer an
an all-inclusive
all-inclusive Mizner Park, Boca
environment
environment so so that
that
consumers
Raton, FL
consumers cancan work,
work, live,
live,
and
and play
play in
in a
a proximal
proximal area
area
- Combine
Combine several
several different
different
uses
uses into
into one
one complex,
complex,
including
including shopping
shopping centers,
centers,
office
office towers,
towers, hotels,
hotels,
residential
residential complexes,
complexes, civic
civic
centers,
centers, and
and convention
convention
centers
centers
Section 3

- Other Locations
- Location and Retail
Strategy
- Legal
Considerations

Matthew Sullivan
Other Location Opportunities

- Airports
Airports
- Temporary
Temporary or
or pop-up
pop-up stores
stores
- Resorts
Resorts
- Store
Store within
within a
a store
store
 Airports

- High
High pedestrian
pedestrian traffic
traffic
- Sales
Sales per
per square
square foot
foot are
are Airport Apple store
higher
higher than
than mall
mall stores
stores
-Rent
Rent is
is higher
higher
- Hours
Hours are
are longer
longer
- Inconvenient
Inconvenient location
location for
for
workers
workers means
means higher
higher wages
wages
Temporary Locations (pop-up stores)

Target pop-up store

- Good
Good for
for businesses
businesses trying
trying
to
to create
create aa little
little hype
hype
- Good
Good introduction
introduction forfor new
new
stores
stores or
or products
products
- Provide
Provide visibility
visibility for
for a
a
business
business
- Provide
Provide additional
additional sales
sales
during
during holidays
holidays and
and special
special
events
events
 Resorts

St. Regis Aspen

Resort, CD
- Captive
Captive audiences
audiences

- Wealthy
Wealthy customers
customers

- People
People with
with time
time on
on their
their
hands
hands
 Store within a store
Occurs
Occurs when
when a
a manufacturer
manufacturer has
has its
its own
own store
store and
and salespeople
salespeople inside
inside a
a retailer
retailer store
store

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

Businesses
Businesses take
take advantage
advantage Social Networking Game
of
of locations
locations where
where
customers
customers are,
are, like
like the
the
internet
internet and
and online
online games,
games,
and
and provide
provide them
them with
with
alternative
alternative ways
ways to
to spend
spend
money
money
Location and Retail Strategy

Factors that affect

location choice

- Shopping
Shopping behavior
behavior of
of
consumers
consumers

- Size
Size of
of Target
Target Market
Market

- Uniqueness
Uniqueness of
of Retail
Retail
Offering
Offering
 Shopping Situations

3 Shopping Behaviors

- Convenience
Convenience shopping
shopping

- Comparison
Comparison shopping
shopping

- Specialty
Specialty shopping
shopping
 Convenience Shopping

Shopper Mentality

- Wants
Wants to
to exert
exert little
little effort
effort
to
to acquire
acquire product
product or
or service
service

- Wants
Wants convenient
convenient location
location

- Less
Less concerned
concerned with
with price
price

- No
No hassles
hassles
 Comparison Shopping

Shopper Mentality

- General
General idea
idea about
about product
product
or
or service
service

- No
No strong
strong brand
brand preference
preference

- No
No strong
strong retailer
retailer
preference
preference
 Specialty Shopping

Shopper Mentality

- Knows
Knows what
what they
they want
want

- Accepts
Accepts no
no substitute
substitute

- Strong
Strong loyalty
loyalty to
to product
product or
or
brand
brand
 Size of Target Market
For
For most
most retailers,
retailers, the
the size
size of
of the
the target
target market
market and
and the
the location
location of
of the
the highest
highest density
density of
of their
their
target market will help determine where their business should be located.
target market will help determine where their business should be located.

Estimates to determine
size of target market

- Estimate
Estimate max
max #
# of
of customers
customers eligible
eligible
to
to purchase
purchase product
product or
or service
service
- Estimate
Estimate percentage
percentage of
of potential
potential
customers
customers
- Estimate
Estimate #
# times
times customers
customers could
could
purchase
purchase the
the product
product or
or service
service in
in a
a
year
year
- Estimate
Estimate highest
highest density
density of
of target
target
market
market
 Uniqueness of Retail Offering

Consumer mentality

- Location
Location doesn’t
doesn’t matter
matter as
as
much
much because
because the
the product
product
is
is that
that important
important or
or unique
unique
 Legal Considerations

Environmental Issues Zoning and Building Codes

- Above
Above ground
ground risks
risks - Sign
Sign restrictions
restrictions

- Hazardous
Hazardous materials
materials - Licensing
Licensing requirements
requirements
 Environmental Issues

Above-Ground Waste Hazardous Materials

Zoning and Building Codes

Signs Licensing