Principles of Retailing

Module 2
Location

‘Location’ is a broader concept, which

denotes the store and its trading area from
where a majority of its customers originate,
while a site refers to the specific building or
part of the building where a store is located.
Location

Location is EVERYTHING. You can have the best

product at the best prices but if the customer
demographic of an area is not right, then your
retail shop is not going to be as successful as you
need and want it to be.
 Business location is a unique factor which the competitors cannot imitate.
Hence, it can give a strong competitive advantage.

Selection of retail location is a long-term decision.

It requires long-term capital investment.

Importance of
Location Good location is the key element for attracting customers to the outlet.

A well-located store makes supply and distribution easier.

Locations can help to change customers’ buying habits.

 Selection of a city

Location
Strategies for Selection of an area or type of
location within a city
Retail
Business

Identification of a specific site

Selection of a City
Size of the city’s trading area

Population growth in the trading area

Total purchasing power of Customers

Distribution Network

Total retail trade potential for different lines of trade

Number, size and quality of competition

Development cost
 Customer attraction
 Selection of Quantitative and
power of a shopping
qualitative nature of
an Area or district or a
competitive stores
particular store
Type of
Location
within a City
Availability of access Nature of zoning
routes regulations
Selection of a Specific Site

ELEVATION TRAFFIC SITE OUTLET LEGAL

CLEARANCE
NATURE OF RETAIL LOCATIONS

Isolated Stores

Unplanned Markets

Planned Markets
Types of Retail Locations

Mall Space

Shopping Centers

Downtown Area

Free Standing Retail Locations

Business Parks

Home-based Retail Stores

Mall Space
Pros of Mall Space
• Lots of foot traffic
• Anchor of community shopping
• Less advertising needed for customers to find you
Cons of Mall Space
• Immediate competition from other stores
• Regulations and rules from mall management
• Higher rent than other retail locations
Shopping Centers

Pros of Shopping Centers

• Fewer rules and regulations for retailers
• High visibility from street
• Lower rent than many malls
• Often served by bus routes/public transit4
Cons of Shopping Centers
• Less foot traffic
• Parking can limit accessibility
• Lack of modern facilities and updates
Downtown Area

Pros of Downtown Areas

• More freedom/fewer rules for business owners
• Attractive to younger customers who prefer
urban living
• Heavy foot traffic
Cons of Downtown Areas
• Expensive or limited customer parking
• High rent
• Limited ability to expand/adapt your space
Free Standing Retail
Locations

Pros of Free Standing Retail

• Few or no restrictions from landlords
• Reasonable cost per square foot
• Limited immediate competition
Cons of Free Standing Retail
• Local zoning may restrict retail activities
• Lack of foot traffic
• Requires regular marketing to attract customers
Business Parks

Pros of Business Parks

• Tenants share maintenance costs
• Buildings have an upscale and professional
appearance
• Easily accessible to other tenants
Cons of Business Parks
• Lack of foot traffic
• Corporate feel less suited to B2C businesses
• Lack of visibility for storefronts/signs
Home-based Retail
Stores

Pros of Home-Based Retail

• Inexpensive to start
• Flexibility balancing work and family life
Cons of Home-Based Retail
• Regulations can restrict use of space, accessory
structures, or number of customers you can
have on-site at once
• Lack of parking
• Difficulty separating work and family life
• Limited room to grow/expand
 Retail Store Layout

A retail store layout (whether

physical or digital) is the
strategic use of space to
influence the customer
experience. How customers
interact with your merchandise
affects their purchase behavior.

This Photo by Unknown author is licensed under CC BY-NC-ND.

Store Design
The use of strategic floor plans and space
management, including furniture, displays,
fixtures, lighting, and signage. Website
designers and user experience (UX)
researchers use space management
techniques and web design principles to
optimize e-commerce websites.
Types of Retail Store Layouts

Forced-Path Grid Store Loop Store Straight Store

Store Layout Layout Layout Layout

Diagonal Angular Store Geometric Mixed Store

Store Layout Layout Store Layout   Layout

Free Flow Boutique

Store Layout Store Layout
Forced-Path
Store Layout
Grid Store
Layout
Loop Store
Layout
Straight Store Layout 
Diagonal Store Layout
Angular Store
Layout
Geometric
Store Layout  
Mixed Store
Layout
Free Flow
Store Layout
Boutique Store
Layout
Exterior design

The exterior design of any retail store must protect

the interior from the outside elements (heat, dust,
humidity, light etc.). Just as  important, it also serves
to convey information to potential customers. The
 exterior is first part of the store that potential
customers see. They will determine  from the outside
whether or not they wish to enter and shop.
 New Building versus Existing Facility

Restrictions

Color  and Materials

Signs
Exterior Windows
Elements The Store Entrance

Store Name

Theft Prevention

Multilevel Stores
 Parking design

Exterior: Key Outdoor signage

elements

Storefront appeal
Parking design

Parking
Lot size Walkways
Angle

Safety
Lighting Space
measures
 Attractive signs

Contrasting colors

Presentation
Outdoor
Signage Visiblity of Text

Simple & Short

Place of sign
Storefront appeal

• Brand presentation
• Fresh paints
• Window display
• Cleanliness
• Welcome & Entrance
• Outdoor landscape
Retail Store Interior
Design

Retail interior design is how you organize

and design your retail space. Your retail
design is responsible for welcoming
customers, guiding them through your store,
inspiring them to interact with your
products, and—ultimately—encouraging
them to buy.
Elements of the retail store interior design

• Fixtures
• Displays
• Color
• Lighting
• Ceilings
• Flooring
• Shelving
• Plano Grams and Shelf Layout Design
• Other considerations
Fixtures
 Balance

Dominance

Eye Movement

Gradation

Displays Height of Merchandise

Grouping Merchandise

Sales appeal

Keeping it Simple
Color
 Lighting

• Mood of the
customers
• Visibility
• Comfort to the eyes
• Attractiveness
Ceilings

• Temperature of store
• Designs
• Cameras
• Safety
• Lighting
Flooring
Shelving
Atmospherics

A set of controllable external, general interior, layout and design,

point-of-purchase and decoration, and human characteristics of a
store that influence shoppers’ internal states.
Store Atmospherics

External Variables

General Interior Variables

Layout and Design Variables

POP and Decoration Variables

Human Variables
 External Variables
Exterior
Exterior Height of
Entrances display
signage building
windows

Size of Colour of Surrounding Lawns &

building building stores gardens

Address & Architectural Surrounding Parking

location style area availability

Exterior walls
General Interior Variables

Flooring &
Colour scheme Lighting Music Scents Width of aisles
carpeting

Wall Paint & Ceiling

Merchandise Temperature Cleanliness
composition wallpaper composition
 Space design Placement of Grouping of Work station
& allocation merchandise merchandise placement

Placement of Placement of
Waiting areas Waiting rooms
Layout equipment cash registers

and Design V
ariables Department
Traffic flow Racks & cases
Waiting
locations queues

Furniture Dead areas

 Point of purchase displays
Signs & cards
Wall decorations
Degrees & certificates
POP and
Pictures
Decoration
Artwork
Variables
Product displays
Usage instructions
Price displays
Technology
 Employee characteristics

Employee uniforms

Human Crowding
Variables
Customer characteristics

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