Principles of Retail Site Evaluation

Selection of a retail site is based on certain principles that act as guidelines for selecting a site. Several consumer oriented location principles guide the retailers in evaluating the retail site alternatives. It should be noted that there is no straight jacket or standard criteria for retail site evaluation.

The main principles of retail site evaluation are :

1. The Principle of Interception

The principle of Interception covers a site’s potential qualities that determine its ability to incept consumers as they travel from one place to another. ‘Interception’ has two distinct elements namely, “source of region” and “terminal regions.” “Source of region” is one from which the consumers are drawn and “terminal region” is one that speaks of consumer destination, a region to which consumers are drawn. The examples of terminal regions are residential areas, office complexes, industrial plants, business districts and shopping centers.  Any point between- source and terminal regions can be considered as point of interception. In considering a site’s interceptor qualities, the evaluator has both an identification and evaluation problem. The identification problem consists of determining (a) the location of source and terminal regions, (b) the lines connecting those regions and (c) appropriate points or sites along the connection line. The evaluation problem is one of measuring the magnitude and quality of these regions, lines and points. Thus, the evaluators problems is how to determine whether a site is an efficient “intervening opportunity” between known source and terminal regions to that effect.

2. The Principle of Cumulative Attraction

According to the principle of “cumulative attraction”, a cluster of similar and complementary retailing activities will generally have greater drawing power than dispensed and isolated stores engaging in the same retailing activities. Retail location literature generally refers to the cumulative attraction effects of the familiar ‘rows’, “cities” and “alleys,” In many large cities, certain types of retailing establishments tend to cluster in specific areas. Examples of these kinds are automobile rows, mobile home cities and restaurant alleys. The evaluators problem in this case is how to determine whether the retail operation can benefit from the cumulative drawing power of a site’s immediate environment.

3. The Principle of Compatibility

Retail compatibility refers to the degree to which two businesses interchange customers. As a rule, the greater the compatibility between businesses located in close proximity, the greater the interchange of customers and the greater the sales volume of each compatibility business. Compatibility between retailers occurs when their merchandising mixes are complimentary, as in the case of an apparel shop, shoe store and jewellery store that are located very close to one another. It there are several apparel, shoe and jewellery stores located in the same cluster, all the better! They are not only complementary, they also provide a healthy competitive situation that satisfies the customers ‘need for comparison shopping and thus provide greater customer interchange for the retailers. A high degree of compatibility is more likely to occur when the pricing structures of neighboring businesses are complementary. Other things being equal, there will be greater interchange of customers between one high margin retailer and another than between a high-margin and low-margin retailer. Equally important in site evaluation is determining whether neighboring businesses are compatible. Thus, an exclusive dress shop would be incompatible with a pet shop because of odor and noise produced by the pets.

4. The Principle of Store Congestion

Where the advantages of cumulative attraction and compatibility end, the problems of site congestion begin. The principle of store congestion states that as locations become more saturated with stores other business activities and people they become less attractive to additional shopping traffic. This results from the limited mobility of people and cars in the area. Retailers should have learnt this lesson from the original congested Central Business Districts (CBD’s). While the excitement of the crowd can be a positive factor, the aggravation of a mob can be a limiting factor, discouraging customers from visiting the site. Thus, in the site evaluation process, the retailer should estimate at what point the volume of vehicle and foot traffic would limit business, both in the present and the near future. In measuring the store congestion, the retailer should recognize the fact that the shopper’s tolerance for retail crowding may differ across types of retail establishments say discount stores versus departmental stores and the shopping times, say Christmas, Valentines Day, weekends etc.

5. The Principle of Accessibility

This is the basic principle of all that are considered while evaluating the site. This principle of accessibility states that the more easily potential consumer can approach, enter, traverse and exit a site, the more likely they will visit the site to shop. Accessibility is a function of both physical and psychological dimensions. The physical dimensions of accessibility are tangible site attributes that either facilitate or hinder the actual physical movement of potential consumers in, though, or out of site. Psychological dimensions of accessibility include potential customers perceive the ease of movement toward and away from site. If consumers believe that it is difficult, dangerous or inconvenient to enter a site, then a psychological barrier has been created equal to any physical barrier. Retailers should consider both real and apparent barriers to accessibility. There are four components of accessibility namely, number and directional flow of traffic, number of intersections, the type of medium and the control on traffic.

  1. The Number and Directional Flow of Traffic 

    It has sub components namely, number of traffic arteries, number of traffic lanes and directional flow of traffic arteries. (a) Number of traffic arteries: The number of traffic arteries adjacent to a site has a profound effect on the consumers ability to approach and enter the site. Other things being equal a corner site is approachable from two traffic arteries is more accessible than a site served by a single traffic artery. The traffic arteries are not all equal, Major thoroughfares provide greater accessibility to trading areas than secondary, feeder, or side streets. Because their function is to provide access for local traffic, the side streets are of less value to retailers. (b) Number of traffic lanes: The more lanes in a traffic artery, the more accessible the site located on this artery, Multi-lane arteries are the consumer’s first choice in selecting routes for most planned shopping trips. Multi-lanes often reduce the consumer’s access to a site, however, especially with left-turns. (right turns in right hand drive countries). Given some drivers hesitancy to turn left across traffic, wide roads create a psychological barrier, especially when ‘consumers must cross two or more lanes of oncoming traffic. In essence, multi-lanes· increase consumers perceived risks. (c) Directional flow of traffic arteries: The accessibility of any site is enhanced if the site is directly accessible from all possible directions. Any reduction in the number of directions from which the site can be approached has an adverse effect on accessibility. Usually, several traffic arteries adjacent to the site enhance accessibility. The location analyst should examine local maps to determine directional biases.

  2. Number and Configuration of Intersections 

    This intersection factor has two aspects : (a) Number of intersections: The number of intersections in the sites’ general vicinity has both positive and negative effects on accessibility. A large number of intersections offers consumers more ways to approach site, but may also reduce accessibility because of slower speeds and the consumer’s increased risk of an accident. Where intersections are large in number, the role of traffic-control devices becomes critical. (b) Configuration of intersections: Consumers generally perceive a site located on a three-corner or four corner intersection as very accessible because these kinds of intersections are fairly standard; consumers are familiar with them and with negotiating them. When there are more than four corners at an intersection, consumers are often confused by “unstandardised” configuration. This “zone of confusion” exists across the entire intersection and presents the potential consumer with numerous conflict situations.

  3. The Type of Median

    The type of median associated with each of the site’s adjacent traffic arteries strongly influences accessibility. Some medians are crossable, while others are not. Generally, crossable medians increase accessibility, although in varying degrees. Medians that provide a “crossover lane” are more encouraging to potential consumers attempting site entry than those without a crossover lane. Crossable medians that force consumers to wait in a traffic lane until crossover is possible create a perceived risk or danger. The driver has often to put up with horn honkers and has the fear of being “stuck out there.” This situation results in a psychological deterrent to the site’s accessibility. Uncrossable medians are both a physical and psychological barrier to site entry. Elevated and depressed medians serve to physically separate traffic, but they also separate traffic psychologically. Potential consumers travelling on the right side of an uncrossable median tend to feel isolated from left-side locations and become more aware of right-side locations, where accessibility is substantially easier.

  4. The Speed limit and Number and Type of Traffic Control Devices

    It has two aspects: (a) The speed limit on traffic arteries: The speed limit on a traffic artery influences a site’s accessibility, since it determines the amount of time potential customers have in which to make a decision about entering a site. Expert opinion vary over what constitutes an ideal speed limit which is between 25 to 40 mph as the best range. (b) Number and type of traffic control devices: Of the general different devices for controlling traffic, the most common are traffic lights, stop signs, rule signs and guidance lines. In terms of accessibility, the traffic lights have enormous effect at cross-overs because of the protection left-turn arrows allow. Traffic lights may be more important for their psychological value than for their physical value. Consumers perceive retail sites with controlled cross overs as more accessible. All other devices have both increase or decrease accessibility to site.

Therefore, the size and shape of the site should be large enough to facilitate all four components of accessibility. Sufficient space should be available to allow ease of parking as well as turning and backing in and out without interfering with consumers who are entering and exiting the site. The shape of the site also can affect accessibility. The wider the site, the greater the exposure to passing traffic, thereby increasing consumer’s awareness of the retailer’s location and activities. Finally, a site should be deep enough to allow ease of entry without interference from exiting traffic or other onsite traffic activities.

Credit: Retail Management-AU

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