RETAIL LOCATION

Where you choose to locate your retail business will have a major impact on everything your shop does. The difference between selecting the wrong location and the right site could be the difference between business failure and success.

Before choosing a retail store location, define how you see your business, both now and in the future.

• What do your customers look like?
• Can you visualize your building?

• Do you know what you want to sell and what you want your business to be known for?
• Have you determined how much retail space, storage area, or the size of the office you need?

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 traveling 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.

Population and Your Customer

If you are choosing a city or state to locate your retail store, research the area thoroughly before making a final decision. Read local papers and speak to other small businesses in the area. Obtain location demographics from the local library, chamber of commerce or the Census Bureau. Any of these sources should have information on the area's population, income and age.

You know who your customers are, so make sure you find a location where your customers live, work and shop.

Accessibility, Visibility and Traffic

Don't confuse a lot of traffic for a lot of customers. Retailers want to be located where there are many shoppers but only if that shopper meets the definition of their target market. Small retail stores may benefit from the traffic of nearby larger stores.

• How many people walk or drive past the location.
• Is the area served by public transportation?
• Can customers and delivery trucks easily get in and out of the parking lot?
• Is there adequate parking?

Depending on the type of business, it would be wise to have somewhere between 5 to 8 parking spaces per 1,000 square feet of retail space.

When considering visibility, look at the location from the customer's view point. Can the store be seen from the main flow of traffic? Will your sign be easily seen? In many cases, the better visibility your retail store has, the less advertising needed.

A specialty retail store located six miles out of town in a free standing building will need more marketing than a shopping store located in a mall.

Signage, Zoning and Planning

Before signing a lease, be sure you understand all the rules, policies and procedures related to your retail store location.

Contact the local city hall and zoning commission for information on regulations regarding signage. Ask about any restrictions that may affect your retail operation and any future planning that could change traffic, such as highway construction.

Competition and Neighbors

Other area businesses in your prospective location can actually help or hurt your retail shop. Determine if the types of businesses nearby are compatible you're your store. For example, a high-end fashion boutique may not be successful next door to a discount variety store. Place it next to a nail or hair salon and it may do much more business.

Location Costs

Besides the base rent, consider all costs involved when choosing a retail store location.

• Who pays for lawn care, building maintenance, utilities and security?
• Who pays for the upkeep and repair of the heating/air units?
• If the location is remote, how much additional marketing will it take for customers to find you?
• How much is the average utility bill?
• Will you need to make any repairs, do any painting or remodeling to have the location fit your needs?

• Will the retailer be responsible for property taxes?

The location you can afford now and what you can afford in the future should vary. It is difficult to create sales projects on a new business, but one way to get help in determining how much rent you can pay is to find out what sales similar retail businesses are making and how much rent they're paying.

Personal Factors

If you plan to work in your store, think about your personality, the distance from the shop to home and other personal considerations. If you spend much of your time traveling to and from work, the commute may overshadow the exhilaration of being your own boss. Also, many restrictions placed on a tenant by a landlord, management company or community can hamper a retailer's independence.

Special Considerations

Your retail shop may require special considerations. Make a list of any unique characteristic of your business that may need to be addressed.

• Will the store require special lighting, fixtures or other hardware installed?
• Are restrooms for staff and customers available?
• Is there adequate fire and police protection for the area?
• Is there sanitation service available?
• Does the parking lot and building exterior have adequate lighting?
• Does the building have a canopy that provides shelter if raining?
• What is the crime rate in the area?
• Are there (blue laws) restrictions on Sunday sales?

References

http://smallbusiness.chron.com/location-business-important-43239.html

http://www.yourarticlelibrary.com/retailing/shopping-malls-and-its-types-with-statistics/48436/

http://ezinearticles.com/?The-Different-Types-of-Shopping-Malls&id=9147109

RETAIL MARKETING STRATEGY

Element In Retail Strategy

•         Target Market - the market segment which the retailer plans to focus its resources and retail mix.

•         Retail Format - the nature of the retailer’s operations, its retail mix.

•         Sustainable Competitive Advantage - an advantage over the competition,

Competitive Advantage

        A competitive advantage is what makes you better than the competition in your customers' minds. Businesses were the first to adopt this method of success. But it is true for anyone, from an employee to a country. Before determining your competitive advantage, you've got to know these three determinants.

1. What you produce. Whether it's a good or service, you must be clear on what you are providing. It must be something that offers real value. That means you need to describe the advantages and benefits of your product or service. You've must be aware of trends that affect your product, especially new technology. For example, the Internet forced newspapers to redefine how they delivered the news.

1. Target market. Who are your customers? You've got to know exactly who buys from you, and how you can make them happier. That increases demand, the driver of all economic growth. Newspapers found out their target market drifted to older people. That's because they weren't comfortable getting their news online.
2. Competition. That's not just other similar companies or products. It includes anything else your customer does to meet that particular need. Newspapers thought their competition was other newspapers until they realized it was the Internet. How could they compete with a news provider that was instant and free?
3. 
   

Sustainable Competitive Advantage

Just because a company is the market leader now, doesn't mean it has a sustainable competitive advantage.

A temporary price cut to gain market share might work in the short-term. But that lead will disappear when it restores those prices to a profitable level. A company must create clear goals, strategies, and operations to sustain its competitive advantage. The corporate culture and values of the employees must be in alignment with those goals, as well. It's difficult to do all those things well. That's why few companies can create a sustainable competitive advantage.

Opportunities For Retailers To Develop Sustainable Competitive Advantages

- Customer Loyalty

- Location

- Human Resource Management

- Distribution and Information Systems

- Unique Merchandise

- Vendor Relations

- Customer Service

3 Approaches For Sustainable Competitive Advantage

• Build strong relationship with customers
• Build strong relationship with suppliers
• Efficient internal operationsHow Countries Use Competitive Advantage

How Countries Use Competitive Advantage

A country can also create competitive advantage. That's called national competitive advantage, or comparative advantage. For example, China uses cost leadership. It exports low-cost products at a reasonable quality level. It can do this because its standard of living is lower, so it can pay its workers less. It also fixes the value of its currency, the yuan, at a lower value than the dollar.

India started as a cost leader but is moving toward differentiation. It provides skilled technical, English-speaking workers at a reasonable wage. Japan changed its competitive advantage. In the 1960s, it excelled at cheap electronics. By the 1980s, it had shifted up to quality brands, such as Sony.

America's comparative advantage is innovation. U.S. companies bring innovative products to market faster than other countries. A great example is Silicon Valley, America's innovative advantage.

The reason for that is America's vast and affluent domestic consumer base. It's easy to test new product ideas and work out the bugs at home. They are marketed throughout the world once they are successful. Amar Bhidé makes a good point in The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Even if the United States starts to lag behind other countries in producing engineers, it's still better at bringing those innovations to market.

References

http://www.forbes.com/sites/susanadams/2013/05/30/the-worlds-most-competitive-countries/#4412a0a7b058

RETAIL INSTITUTIONS BY STORE-BASED STRATEGY MIX

The Wheel of Retailing

• A process observed in retail marketing when what is originally a discount store improves its services and products in order to boost prices once it has become established. As it cycles through the wheel of retailing, a discount retail business might develop into a higher end department store, leaving its former niche to be filled by newer discount businesses.

The Wheel of Retailing describes how outlets change over time.

The graph shows the retail life cycle.

The description of the retail life cycle.

How Retail Institutions Are Evolving

• Forward-looking firms know their individual strategies must be modified as retail institutions evolve over time. Complacency is not desirable. Many retailers have witnessed shrinking profit margins due to intense competition and consumer interest in lower prices. This puts pressure on them to tighten internal cost controls and to promote higher-margin goods and services while eliminating unprofitable items. Firms are reacting to this formidable environment through mergers, diversification, and value-driven retailing. Downsizing, as well as cost containment Mergers, Diversification, and Downsizing Some firms use mergers and diversification to sustain sales growth in a highly competitive environment (or when the institutional category in which they operate matures). For stronger firms, this trend is expected to carry over into the future

•Mergers

combinations of separately owned firms 

•Diversification

retailers become active in businesses outside their normal operations 

•Downsizing

unprofitable stores are closed or divisions are sold off 

Reference

http://www.citeman.com/7774-concept-of-life-cycle-in-retail.html

TYPES OF RETAILERS

There are 7 main types of retailers which can be defined by the size of their business and the way they in which they sell their products.

The 7 main types of retailers are;

Department Store

         This type of retailer is often the most complex offering a wide range of products and can appear as a collection of smaller retail stores managed by one company. The department store retailers offer products at various pricing levels. This type of retailer adds high levels of customer service by adding convenience enabling a large variety of products to be purchased from one retailer. The exanple are:

• Jusco
• Parkson
• Sogo

Supermarkets

·      Generally, this type of retailer concentrates in supplying a range of food and beverage products. However, many have now diversified and supply products from the home, fashion and electrical products markets too. Supermarkets have significant buying power and therefore often retail goods at low prices. The examples are:

•            Econsave
•       C-Mart
•       Billion

Warehouse retailers

·       This type of retailer is usually situated in retail or Business Park and where premises rents are lower. This enables this type of retailer to stock, display and retail a large variety of good at very competitive prices. The examples are:

•            IKEA
•       Makro

Speciality Retailers

·     Specialising in specific industries or products, this type of retailer is able to offer the customer expert knowledge and a high level of service. They also add value by offering accessories and additional related products at the same outlet. The examples are:

•            The Body Shop
•       Avon
•       Al-Ikhsan

E-tailer 

·      This type of retailer enables customers to shop on-line via the internet and buy products which are then delivered. This type of retailer is highly convenient and is able to supply a wider geographic customer base. E-tailers often have lower rent and overheads so offer very competitive pricing. The examples are:

•             Zalora
•        Lelong.com
•        Lazada

Convenience Retailer

·       Usually located in residential areas this type of retailer offers a limited range of products at premium prices due to the added value of convenience. The examples are:

•       7 Eleven
•       Mesra at Petronas

Discount Retailer

This type of retailer offers a variety of discounted products. They offer low prices on less fashionable branded products from a range of suppliers by reselling end of line and returned goods at discounted prices.

• Carefour
• Tesco

Reeference

https://www.reference.com/business-finance/different-types-retail-stores-ef25ebf6b997b71a

INTRODUCTION TO THE WORLD OF RETAILING

Overview

• Retailing involves a set of business activities that adds value to the products and services sold to the final consumers for their personal, family or household use. 
• Retailers play a major role in the distribution system by helping manufacturers to reach out to the customers and at the same time, offering an array of value added services like breaking bulk, providing assortment, holding inventory and providing information for their customers.
• Retailing is poised to become one of the largest industries in India and the size of the economic activity in this industry is bound to have an impact not only on the consumers and manufactures but also the entire economy. 
• This chapter has discussed various factors that led to the growth of retailing in India and benefits that it would provide. 
• It also discussed various environmental issues that would have an impact on the retailing industry.

What is Retail?

Retailing includes all activities involved in selling goods or services to the final consumers for personal, non-business use.

− Phillip Kotler

· Retailing is a set of business activities that adds value to the products and services sold to consumers for their personal or family use.

· A retailer is a business that sells products and/or services to consumers for personal or family use.

·  Firms that are retailers and wholesalers - sell to other business as well as consumers such as Tesco.

· Retailers are the final business within a supply chain which links manufacturers to consumers.

·A Supply Chain is a set of firms that make and deliver a given set of goods and services to the ultimate consumer.

            Retail is the final stage of any economic activity. By virtue of this fact retail occupies an important place in the world economy. In an attempt to understand the scope of the term retail, various definitions of the term have been examined.

            According to Philip Kotle (2010), Retailing includes all the activities involved in selling goods or Services to the final consumers for personal, non-business use. A retailer or retail store is any business enterprise whose sale volume comes primarily from retailing. Any organisation selling to final consumers whether it is a manufacturer, wholesaler or retailer is doing retailing It does not matter how the goods services are sold (by person, mail, telephone, vending machine or internet or where they are sold - in a store, on the street or in the consumer's home).

            The word retail is derived from the French word ‘retaillier’, which means to cut off a piece or to ~k bulk. A retailer may be defined, as a 'dealer or trader who sells goods in small quantities' or 'one who repeats or relates'.

            Retailing thus may be understood as the final step in the distribution of merchandise, for consumption by the end consumers. Put simply, a firm that sells products to the final consumer is performing the function of retailing. It thus consists of all activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use.

            It is necessary to understand that in the complex world of trade today, retail would include only goods but also services, which may be provided to the end consumer. In an age where the customer is the king and marketers are focusing on customer delight, retail may be redefined as the first point of customer contact.

Functions of a Retailer:

Retailor provides the goods that customer needs, in a desired form, at a required time and place.

• A retailor does not sell raw material. He sells finished goods or services in the form that customer wants.

• A retailer buys a wide range of products from different wholesalers and offers the best products under one roof. Thus, the retailor performs the function of both buying and selling.

• A retailor keeps the products or services within easy reach of the customer by making them available at appropriate location.

The Rise of Retailer

            In the not so distant past, manufacturers created a product, advertised it slickly and sold it through their distribution channel. The manufacturing companies enjoyed economic power, as they were significantly bigger in size as compared to the distributors or the retailers. They determined prices, the products that the retailer could stock and also the dealer and distributor margins. They would also independently advertise for their products. In case of a dispute with the distributor or retailer it would not be rare for the manufacturer to discontinue supplies. However, much has changed.

            Today, retail has emerged as a separate function by itself. The environment in a large organized retail store is significantly different from that of a traditional or a mom and pop store. 

Proximity to the Customer

            Today, with the emergence of large supermarkets, hypermarkets and various other formats like the department stores, the retailer is the closest to the consumer. Most stores have their own policies and decide how to influence shoppers. In an age of global manufacturing and selling, the organization may be based in one part of the world and may actually retail its products in various other regions. The retailer is the first contact point that the consumer has with the product, and this fact has given the retailer tremendous power.

Technology

            With the increasing use of technology and the use of the Point of Sale scanning systems at barcode, a wealth of information is now available to the retailer.

In my whole retailing career, I have stuck to one guiding principle: give your customers what they want…and customers want everything: a wide assortment of good quality merchandise, lowest possible prices, guaranteed satisfaction with what they buy, friendly knowledgeable service, convenient hours, free parking, and a pleasant shopping experience.

You love it when you visit a store that somehow exceeds your expectations and you hate it when a store inconveniences you, or gives you hard time, or just pretends you are invisible…

− Sam Walton (Founder, Walmart)

References

http://purepotential.org/careers-advice/introduction-to-retail/

https://www.linkedin.com/pulse/20130607115409-12921524-how-did-we-get-here-a-short-history-of-retail