Most of the retail site evaluation procedures use the concepts of “trading area adequacy” and the “trading area potential” to predict the total trading area business and the share of business a particular retailer can expect. Read More: Trading Area Adequacy Trading area potential, it is something, which is predicted ability of a trading area to provide acceptable support levels for a retailer in future. The two important concepts in trading area potential are residential support levels and non-residential support levels. Residential Support Levels A retailer is to concentrate on the most important source of business, namely the area’s residents, after sufficiently identifying the gross trading area. To measure a trading area’s potential consumers, the retailer is expected to analyse population or demographic and household or residential variables. Population or Demographic Analysis. A trading areas total capacity to consume is partly a function of the total number of population and Continue reading
Retail Management
Trading Area Adequacy for Retail Layouts
Trading area adequacy is the ability of a trading area to support proposed and the existing retail operations. The support capability may be viewed in a “Gross” as well as “Net” form. Here Gross adequacy is the ability of a trading area to support a retail operation without any consideration of retail competition. That is, the gross adequacy measures the total amount of business available to all the competing retailers within a defined trading area. Contrary to this, “net adequacy” is the ability of a trading area to provide support for a retailer after competition has been taken into account. The Gross Adequacy of Trading Area Measurement of gross adequacy determines the trading area’s total capacity to consume. The capacity of a retail market to consume is the function of the total number of consumers within a trading area at a given time and their need, willingness and the ability Continue reading
Retail Trading Area Dimensions
A critical element in determining a retailer’s success is the ability to assess and acquire a good location. To achieve this objective, the retailer is expected to identify, evaluate and select trading areas to segment his consumer markets further. After identifying and evaluating local markets, the retailer must then segment them into trading areas. A “retail trading area” is the area from which a store attracts its customers or obtains its business. After this, the terminal point in location decision is that of selection of proper site. Before the trading area identification process, it is essential to know the dimensions to describe a retail trading area. These trading areas dimensions are – area size, area shape and area structure. The Trading Area Size Trading areas range in size from a few square meters to’ a radius of many kilometers. The size of the trading area is a function of the Continue reading
Customer Spotting Techniques in Retail
Customer spotting techniques include several methods by which the retailer attempts to “spot” customer origins on a map. By carefully observing me magnitude and arrangement of these origins the retailer can identify the dimensions of the trading area. Retailers normally define customer origins by home addresses, although customers place of employment are also important. Some of the more common customer spotting techniques include surveys of customers’ license plates, customer surveys, analysis of customer records and studies of customer activities. License Plate Surveys. By recording the license plate numbers of automobiles in the store’s parking area, retailers can obtain customer home addresses. Sampling normally includes the checking of licence plates at different times of the day, different days of the week and different weeks of the month to ensure a representative sample. The major advantage of this technique is it is relatively in expensive method. However, the advantages are; (1) It Continue reading
Retail Site Evaluation and Selection
Retail Site Evaluation Methods Experts and analysts have at their disposal several methods to evaluate retail site alternatives. These are broadly classified as subjective and objective. Again some are quite simple and some are sophisticated. It suffices to take two most commonly used methods namely, checklist method and quantitative methods. 1. Checklist Method It provides a retail site evaluator with a set of procedural steps for arriving at a subjective yet quantitative expression of a sites value. First, the evaluator enumerates the general factors that are usually considered in any site evaluation. A typical list of factors includes all or most of the site-evaluation principles~ interruption, cumulative attraction, compatibility and accessibility. Secondly, for each general factor, the evaluator identifies several attribute measurements that reflect the location needs of the proposed operation. For instance, interception which is a key location attribute for most convenience retailers, can be divided into the volume Continue reading
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 Continue reading