RETAIL LOCATIONS

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Agenda
Shopping Centers, Malls, City or town etc. Various types of locations and retail strategy, Site location Factors affecting the demand for a region & attractiveness of a site
Christ University, Bangalore

Shopping Centers
The term Shopping Center has been evolving since the early 1950s A shopping center is a group of retail and other commercial establishments that is planned, developed, owned, and managed as a single property The two main configurations of shopping centers are : 1.Strip Shopping Centers ,and, 2.Enclosed Shopping Malls

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Strip Shopping Centers

Strip Shopping Centers are shopping centers that usually have parking directly in front of the stores Open canopies may connect the store fronts, but a Strip Center does not have enclosed walkways linking the stores The primary advantages of Strip Shopping Centers are that they offer customers convenient locations and easy parking and they entail relatively low rents for retailers The primary disadvantages are that there is no protection from the weather, and they offer less assortment and entertainment options for customers than malls As a result, Strip Centers do not attract as many customers as larger shopping centers

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Strip Shopping Centers

There are two types of Strip Shopping Centers: a) Traditional Strip Centers b)Power Centers

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Strip Shopping Centers

Traditional Shopping Center is a shopping center that is designed to provide convenient shopping for the day- to- day needs of consumers in their immediate neighborhood They can offer lower prices, partly because of the lower rents, plus their customers can drive right up to the door

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Strip Shopping Centers

Power Center is a shopping center that is dominated by several large anchors, including discount stores (Target), off- price stores(Marshalls), warehouse clubs (Costco), or category specialists such as Home Depot, Office Depot etc.

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Shopping Malls
Shopping Malls are shopping centers in which customers park in outlying areas and walk to the stores Traditional malls are enclosed Hence, customers are protected from the weather

Advantages of Shopping Malls

Shopping malls have several advantages over alternative locations First, because of the many different types of stores, the merchandise assortments available within those stores, and the opportunity to combine shopping with entertainment, shopping malls have become very popular with todays shoppers The second major advantage of locating in a shopping mall is that the tenant mix can be planned. Shopping mall owners control the number of different types of retailers so that customers can have a one- stop shopping experience with a wellbalanced assortment of merchandise. For instance, its important to have several womens clothing stores in a major mall to draw in customers. Yet, too many such stores could jeopardize any one stores success. Mall managers also attempt to create a complementary tenant mix. They like to have all stores that appeal to certain target markets (such as all upscale specialty clothing stores) located together. Thus, customers know what types of merchandise they can expect to find in a particular mall or location within a mall. The third advantage of shopping malls is that the retailers and their customers dont have to worry about their external environment. The malls management takes care of maintenance of common areas.

Disadvantages of Shopping Malls

Although shopping centers are an excellent site option for many retailers, they have some disadvantages. First, mall rents are higher than those of some strip centers, freestanding sites, and many central business districts. Second, some tenants may not like mall managers control of their operations. Mall managers can, for instance, dictate store hours and window displays. Finally, competition within shopping centers can be intense. It may be hard for small specialty stores to compete with large department stores. In the past few years, some shopping centers have had a particularly hard time keeping their space rented.

De- malling
A more extreme approach to revitalizing a mall is known as De- malling De- malling usually involves demolishing a malls small shops, scrapping its common space and food courts, enlarging the sites once occupied by department stores, and adding more entrances onto the parking lot. For example, Anaheim Plaza was one of the first enclosed malls in Orange County, California, near Disneyland. During the 1980s, it had lost most of its original glamour. Its owner bulldozed most of the mall and built in its place a string of stores, opening onto a parking lot. The new tenants include a Wal- Mart, CompUsa, Old Navy, Radio Shack, Petco, and Payless Shoes

Regional Centers
A regional center is a shopping mall that provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors, department and discount stores, or fashion specialty stores. A typical regional center is usually enclosed with an inward orientation of the stores connected by a common walkway, with parking surrounding the outside perimeter.

Superregional Center
A superregional center is a shopping center that is similar to a regional center, but because of its larger size, it has more anchors and a deeper selection of merchandise, and it draws from a larger population base.

Lifestyle Centers
A Lifestyle center is an outdoor traditional streetscape layout with sit- down restaurants and a conglomeration of retailers such as Williams- Sonoma, Pottery Barn, and Eddie Bauer. But there are no self- service discount stores like Best Buy or Target. The lifestyle centers offer shoppers convenience, safety, an optimum tenant mix, and a pleasant atmosphere.

Fashion/ Specialty Centers

A fashion/ specialty center is a shopping center that is composed mainly of upscale apparel shops, boutiques, and gift shops carrying selected fashions or unique merchandise of high quality and merchandise. These centers need not be anchored, although sometimes gourmet restaurants , drinking establishments, and theaters can function as anchors. The physical design of these centers is very sophisticated, emphasizing a rich decor and a high- quality landscaping.

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Outlet Centers
Outlet Centers are shopping centers that consist mainly mostly of manufacturers outlet stores selling their own brands, supposedly at a discount. Outlet center tenants view this location option as an opportunity to get rid of excess or distressed merchandise, sell more merchandise, and, to a lesser extent, test new merchandise ideas

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Theme/ Festival Centers

Theme/ Festival Centers are shopping centers that typically employ a unifying theme that is carried out by the individual shops in their architectural design and, to an extent, in their merchandise. The biggest appeal of these centers is to tourists. A Theme/ Festival Center can be located in a place of historical interest such as Faneuil Hall in Boston or Ghirardelli Square in San Francisco. Alternatively, they can attempt to replicate a historical place (such as the Old Mill Center in Mountain View, California) or create a unique shopping environment (like MCAs City Walk in Los Angeles).

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Merchandise Kiosks
Although not a type of shopping mall, Merchandise Kiosks are found in shopping malls of all types and are a popular location alternative for retailers with small space needs. Merchandise Kiosks are small selling spaces offering a limited merchandise assortment. These selling spaces are typically between 40 and 500 square feet and can be in prime mall locations. They are relatively inexpensive compared to a regular store. They usually have short- term leases, shielding tenants from the liability of having to pay long- term rent in case the business fails. Some merchandise kiosks operate seasonally, for instance, selling polar fleece in winter and baseball hats in summer.

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City or Town Locations

Central Business Districts (CBD): The Central Business District (CBD) is the traditional business area in a city or town. Due to its business activity, it draws many people into the area during business hours. Also, people must go to the area for work. The CBD is also the hub for public transportation, and there is a high level of pedestrian traffic. Finally, the most successful CBDs for retail trade are those with a large number of residents living in the area. Inner- City Locations: Another city or town location alternative is the inner city. The inner city is typically a high- density urban area consisting of apartment buildings populated primarily by ethnic groups: African Americans, Hispanics, and Asians. There are about 8 million households in Americas inner- cities.

Main Street Locations

Main Street is the CBD located in the traditional shopping area of smaller towns, or a secondary business district in a suburb or within a larger city. Main Streets share most of the characteristics of the primary CBD. But their occupancy costs are generally lower than that of the primary CBD. They do not draw as many people as the primary CBD because fewer people work in the area, and fewer stores generally mean a smaller overall selection. Finally, Main Streets typically dont offer the entertainment and recreational activities available in the more successful primary CBDs.

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Freestanding Sites
Although most retailers locate in strip centers or planned shopping malls, a frequent option for large retailers is a freestanding site A freestanding site is a retail location thats not connected to other retailers, although many are located adjacent to malls. Retailers with large space requirements, such as warehouse clubs and hypermarkets, are often freestanding. Advantages of freestanding locations are greater visibility, lower rents, ample parking, no direct competition, greater convenience for customers, fewer restrictions on signs, hours, or merchandise (which might be imposed in a merchandise), and ease of expansion. The most serious disadvantage of freestanding sites is the lack of synergy with other stores.

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Other Retail Location Opportunities

Mixed- Use Developments (MXDs): combine several different uses in one complex, including shopping centers, office towers, hotels, residential complexes, civic centers, and convention centers.MXDs are popular with retailers because they bring additional shoppers to their stores. Developers like MXDs because they use space productively. For instance, land costs the same whether a developer builds a shopping mall by itself or builds an office tower over the mall or parking structure. Airports: One important high- pedestrian area that has become popular with national retail chains is airports. After all, what better way to spend waiting time than to have a Starbucks coffee or stop into Victorias Secret? Sales per square foot at airport malls are often three to four times as high as at regular mall stores. Resorts: Who needs anchor stores to bring in customers when there are mountains or a beach to attract people? Retailers view resorts as prime location opportunities. There is a captive audience of well- to- do customers with lots of time on their hands.

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Other Retail Location Opportunities

Hospitals: are an increasingly popular location alternative. Both patients and their guests often have time to shop. Necessities are important for patients since they cant readily leave. Gift- giving opportunities abound. At the University Pointe hospital in West Chester, Ohio, there is 75, 000 square feet of retail space filled with restaurants serving healthy fare and a host of health- related stores and services, such as a day spa. Store within a Store: Another non- traditional location for retailers is within other, larger stores. Retailers, particularly department stores, have traditionally leased space to other retailers such as sellers of fine jewelry or furs.

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Location and Retail Strategy

Department Stores: are usually located in central business districts and regional or superregional shopping centers. Departmental stores have historically been the backbone of CBDs. Since the 1950s, they have become the anchors for most regional and superregional shopping centers. Specialty Apparel Stores: thrive in central business districts, Main Street locations, and most types of malls, including regional and superregional shopping centers, lifestyle centers, fashion/ specialty centers, and theme/ festival centers. These locations appeal to these specialty stores for the same reasons that they are popular with department stores: They are all capable of drawing large numbers of people, and they provide entertainment and recreational opportunities for their customers. Shopping centers also provide security, uniform and long hours of operation, protection against weather, and a balanced tenant mix that is consistent with their target market.

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Location and Retail Strategy

Category Specialists: like Home Depot and Staples are likely to be found in power centers or in freestanding locations. They choose power centers or freestanding locations for several reasons. First, such stores typically compete on price, and these locations cost less than CBDs or malls. Second, easy access to parking is important to customers of category specialists since purchasers are often large and difficult to carry. Finally, category specialists are destination stores. A destination store is one in which the merchandise, selection, presentation, pricing, or other unique features act as a magnet for customers. Grocery Stores: are typically locate din strip centers. Like category specialists, grocery stores are price competitive, and strip centers have relatively inexpensive rent. These centers readily accessible parking is also important to grocery store customers. People generally arent willing to travel long distances to shop for customers.

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