Selecting the location of a retail store is the most important strategic decision. Retailers could do with assessments by considering a range of aspects prior to selecting a location. First of all, the location is the first that customers notice before they head out to shop. Customers are more than happy to save time taken to travel and hence see which retail store is the closest. Secondly, it is long term decision and investment. Retailers need to live with it for a long period of time. Finally, retailers need check on the availability of their suitable best location in the market. There is a possibility that it would have been already taken by someone else.
A trade area can be ascertained by consumer spotting techniques. Forecasters must consider various factors like – checking the customer demographics, age distribution, consumer market, psychographics, annual household income category, environment and safety. These can be achieved by conducting market research.
1. Checking the customer demographics: is a statistical report on the total number of customers in the area, their nature of work, unemployment rate and recent migrants
2. Age distribution: report contains details on customers age and the gender
3. Consumer market: shows information such as the percentage of households with 4 Wheelers, percentage households with 2 wheelers, annual household income, annual household saving
4.Psychographics: is a report on customer whether they are youths, middle age, experimentation, westernized, cosmopolitans or metropolitans.
5. Annual household income category: contains details of the customers income whether they fall under 1000 lpa.
6. Environment: Retailers need to look at neighbourhood traffic generators such as restaurants, number of tourist places to visit, adequacy of parks, movie halls, schools, colleges and hospital complexes.
7. Safety: It is extremely important and safe to check the crime rate in the neighbourhood such as theft, robbery, crime against women and number of murders. This helps out retailers to ensure theirs as well as their customer’s protection.
Retail analysts need to identify the probability that a customer would shop at their retailer store irrespective of the presence of another competitor’s store. Analysts have to not only understand the customer’s lifestyle, social culture and the time distance that a customer is expected to travel to the retail store but also are required to know whether the business climate would be favourable to the retailers.
Next, it is necessary for the retailers to find out the population of the area. They need to identify whether there is a population growth or decline. It is idyllic to locate in area where there is general growth in population. Retailers need to estimate the store sales and profitability based on the patronage of the locality.
Retailers need to look at location attractiveness. Analysis such as road patterns, road conditions, natural barriers, artificial barriers, visibility, traffic flow and congestion are vital for an attractive store location.
1. Road patterns such as freeways and major highways should be available for customers to travel in ease to the retail store
2. Road conditions should be good. This constitutes not only the repair status of the road but also the number of lanes, traffic signals, the age of the road, congestion and number of lanes.
3. Natural barricades such has mountains or rivers and artificial barriers like parks, railway tracks, and bridges, should be taken under consideration
4. Visibility is another key factor, which means retail store should be visible to the shoppers
The parking lots must be sufficient. The traffic flow of people should not be such that it impedes the store by congestion and overcrowding the place
Retailers with a very strong format can locate in a highly competitive area. Competition is defined based on the type of retail format the retailers plan to go for. Once we define the competition it is easier to identify other retail competitors and retailers can understand the competitor’s by evaluating their strengths and weaknesses. The most common way to learn about the competitors is by fieldwork and through their websites (if present). By being ignorant about the competitors, the retailers can cannibalize their sales. However, the safest strategy is to select a location with less competition.
Retail store location selection must not be done in haste. It requires time and mathematical strategies. If retailers are not sure about a location then the best fit would to wait till, they acquire the suitable location. It is better to delay to open a store in right location rather than decide on poor location and suffer from problems occurred from it. If, you are looking for the best commercial shop in Noida, Visit here: https://www.anthurium.in/commercial-retail-space/