Retailing and Buying
“Evaluate the strategic issues which should
be considered when selecting a good store
location and discuss how store layout can
serve as a competitive advantage”.
Presentation Layout
• Introduction
• General Location Factors
• Specific Location Factors
• The Specific Store Site
• Store Layout
• Conclusion
• Student Activity
• Questions
Introduction
• Store location decisions are frequently considered to be the
single most important elements of retail marketing.
• A retailers location is the key to its ability to attract
customers.
• Large retailers usually employ specialists who select
locations using sophisticated methods.
• WalMart was the first mass merchandiser to locate in small
and rural markets. This has been one of key factors in their
phenomenal success.
• Even very small physical differences between locations can
exert a major influence upon the stores accessibility and
attractiveness to customers. (Davidson et al, 1988)
General Location
Factors
• Size of population and catchment area of potential location
- Ensuring that there are sufficiently large numbers of
potential customers in the catchment area of the proposed
location.
• Characteristics of the population
- Age and socio-economic groupings
- Ethnic, religious or special consumer groups
General Location
Factors
• Economic conditions in the catchment area
- Local employment trends
- Local authority attitudes
- Potential major retail property developments
- Local traffic conditions
- Local rent and rates
General Location
Factors
• Competition
- The presence of competition has its advantages and its
drawbacks.
- Large towns and cities usually have a wide spread of
competing retailers.
- Large department stores such as Marks and Spencer and
Debenhams have a strong presence in these locations.
- A main advantage is that these locations have an
established traffic flow and there is a good chance of
attracting passing shoppers.
- A disadvantage is because of the presence of the big
players , rents are likely to be higher.
Specific Location
Factors
Types of shopping area
• Central Shopping Districts
- Prime retailing areas in most cities and large towns
• Secondary high streets and neighbourhood shopping areas
- Has a number of national, multiple shop operators but
will be too small to attract the chain and department
stores.
- Dedicated to severing the local community, comprising
mostly of convenience goods outlets.
Specific Location
Factors
• Shopping Centres
- The large developments that have risen away away
from the middle of the town, and which have been
built with the motorist very much in mind.
• Retail Parks
- Out-of-town developments which are large warehouselike stores with car parking facilities.
- Generally on one floor only, very simply fitted, and are
occupied for the most part by retailers of lower priced,
space-hungry items
Store Layout
Care and attention must be put into the planning of the stores
appearance and the image it will give to the target customers.
This image must be consistent with company’s marketing objectives
and distinctive and distinguish from its competitors.
Factors which contribute to the customer’s perception of the retailer
are:
• The exterior of the store
• Window and interior displays
• Store space
• Merchandising
• Atmosphere of the store
• Customer services
The Exterior of the
Store
• The external appearance of a store often has to be a compromise
between what the company would like and what it is allowed to do.
(Simkin, 1990)
• Local authorities are becoming more stringent in the aesthetic
protection of their domains.
• A common restriction is the size and design and external signs,
especially the projecting type.
• The external design is one to be considered carefully, as it it the first
point of communication with customers.
• Must be readily recognisable from a distance.
Window and Interior
Displays
• A large number of actual and potential customers pass most high
street stores each day
• The windows are a prime means of speaking to customers
• Discounters and food retailers use a lot of the glass for
promotional posters
• Fashion clothing and footwear retailers use window displays to
promote their latest looks
• Luxury goods specialists go for the minimalist window displays
that are image builders
Store Space
Through careful design of the store layout, a retailer can make
the best use of available space and also manipulate traffic flow
within a store to maximise exposure to the merchandise.
(Fletcher, 1987)
Each store has a total square footage of floor space available
and must allot among:
• Selling space
• Merchandise space
• Personnel space
• Customer space
Store Space
Selling Space
Area set aside for displays of merchandise, interactions
between sales personnel and customers, demonstrations, and so
on.
Merchandise Space
Area where nondisplayed items are kept in stock or inventory.
Personnel Space
Space required for changing clothes, lunch and coffee breaks,
and rest room facilities.
Store Space
Customer Space
This can include a lounge, benches/chairs, dressing rooms, rest
room facilities, a restaurant, vertical transportation, smoking
areas, a nursery, parking, and wide aisles.
Store Space
• When retailers improve their space utilisation it can lead to
significant growth in operating performance of their business.
• Space management is concerned with placing merchandise
within the store in the most profitable manner.
• A store must present a distinct image that distinguishes it for
its competition.
• Attractive exteriors draw customers into stores; interiors keep
customers attention, and influence them to stay and buy.
• An example of a good store layout is IKEA
Merchandising
• Merchandise is probably the most complex expectation
customers have of retail stores. The customer expects to find a
variety or a selection of different kinds of merchandise that is
consistent with personal shopping intentions and preferences.
(Risch, 1997)
• The concept of assortment is closely related to the concept of
variety.
• The demand for more exciting store designs has been largely
consumer led.
Merchandising
Mintel (1999), defined retail design as:
“The visual result of a conceptual approach to store design and
merchandising display. Its aim is to increase customer appeal as
part of the retail marketing strategy”.
To prepare a display properly, one must understand the effects
of combining merchandise with colour, lights, and tasteful
props.
Merchandising examples are:
• Toys ‘R’ Us
• Thomas Cook
• Nike town and Hard Rock Café
Atmosphere of the Store
• The sight, sounds, smells, etc of a store contribute greatly to
the image that is projected to consumers.
• Many people form impressions of a store before entering or
just after entering.
• Store atmosphere may influence:
- peoples enjoyment of shopping
- their time spent browsing
- their willingness to converse with personnel and to use
facilities as dressing rooms
- their tendency to spend more money than planned
- their likelihood of future patronage
Customer Services
In an attempt to provide better customer services and perhaps
differentiate themselves from competitors, retailers offer
services such as:
• Gift-wrapping
• Refunds
• Exchanges
• Extended store hours
• Demonstrations
• Home deliveries
Conclusion
• ‘Place’ can be seen as the most important of the 4 P’s.
• Inadequate thought processes and planning on this subject can
cost a retailer substantial profit.
• Choosing the wrong catchment area in which to trade is a recipe
for disaster from the outset, no matter how well the store is
designed.
• Big retail groups invest substantial time and effort on ‘Place’.
• Using invaluable local knowledge may help avoid pitfalls.
Bibliography
BOOKS
R. L. Davies and D.S. Roger, (1987), Store Location and Store Assessment Research. St.
Edmundsbury Press Limited, Suffolk.
N. Wrigley, (1998), Store Choice, Store Location and Market Analysis.
Routledge Publishing, London.
M. Morgenstein and H. Strongin, (1992), Modern Retailing – Third Edition.
Prentice-Hall International Editions, London.
A. Collins, (1992), Competitive Retail Marketing. McGraw-Hill International (UK) Limited.
G. Pintel and J. Diamond (1983), Retailing- Third Edition. Prentice-Hall International
Editions, London.
Bibliography
P.J. Mc Goldrick, (1990), Retailing Marketing. McGraw-Hill, London.
W.R. Davidson et al, (1988), Retailing Management. John Wiley & Sons, London.
P. Kotler and G. Armstrong, (1997), An Introduction to Marketing – Fourth Edition.
Prentice-Hall International Editions, London.
The Chartered Institute of Bankers, (1997), Customer Services – Marketing and the
Competitive Environment. CIB Publications, Kent.
P. Kotler et al, (1996), Principles of Marketing- European Edition. Prentice-Hall, London.
B. Berman and R. Evans, (1992), Retail Management – Fifth Edition. Macmillan Publishing
Company, London.
Bibliography
M.H. Mc Donald and C.S Tideman, (1993), Retail Marketing Plans. Butterworth-Heinemann
Ltd, London.
E.H. Risch, (1987), Retail Merchandising, Merrill Publishing Company, London.
JOURNALS
R.M. Clarkson et al, (1996), “UK Supermarket Location Assessment”. International Journal of
Retail & Distribution Management. Vol 24. No. 6. MCB University Press.
M. Davies and I. Clarke, (1994), “A Framework for Network Planning”. International Journal
of Retail & Distribution Management. Vol 22. No. 6. MCB University Press.
B.R. Lewis and A.W. Hawksely, (1990), “Gaining a Competitive Advantage in Fashion
Retailing”. International Journal of Retail & Distribution Management. Vol 18. No. 4. MCB
University Press.
Bibliography
L.P. Simkin, (1990), “Evaluating a Store Location”. International Journal of Retail &
Distribution Management. Vol 18. No. 4. MCB University Press.
A.J. Newman and P. Cullen, (2001), “From Retail Theatre to Retail Food Show – The
Shrinking Face of Grocery”. British Food Journal. Vol. 103. No. 7. MCB University Press.
WEBSITES
www.emerald.co.uk
www.mintel.co.uk
www.fame.co.uk
Student Activity
QUESTIONS:
1. Can you identify the four factors, which must be
considered when selecting a store location?
2. There are four areas in a store which must allocate store
space, what are they?
3. Can you give the three examples of the stores I mentioned
that undertake effective merchandising?
4. Can you name the four main types of shopping areas?
5. Out of the six customers services I mentioned in the
presentation, name three.
QUESTIONS?