Retailing and Buying Evaluate the strategic issues which

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. • Wal. Mart 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 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 warehouse like 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 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. Mc. Graw-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. Mc. Graw-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 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?