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Retail Management Basics Archives - Page 3 of 7 - MBA Knowledge Base

Growth Potential of Retail Trading Areas

Every retailer must answer one more question before completing the trading area evaluation process. That is what holds for the future for the retail trading area ? In other words he is to foresee the growth potentials of trading areas. It is because, the marketing opportunities can change quickly or dynamically growing trading areas might turn either static or decline. The retailer either must fight to maintain present market share or be willing to survive on a smaller share without future growth. However, with the growth, the retailer has an opportunity to expand sales and market share at a reasonable amount of cost and effort.… Read the rest

Out-shopper Analysis in Retail Management

It is very clear that not all the consumers who are within the trading area shop exclusively from that area. A group of consumers known as “out-shoppers” frequently and regularly shop outside their local trading area. These consumers spend a considerable amount of time, money and effort making inter-trading area shopping trips. Some out-shoppers look for economic gains arising from lover prices in larger trading  centers  where assortments are better and the level of competition is more intense. Some shoppers simply seek the diversity of unfamiliar or more stimulating surroundings. Demographically  out-shoppers  are younger and are relatively well educated and their relative income is high; psychologically,  out-shoppers  are active and are on the “go”, urban-oriented who are neither time conscious nor store loyal shoppers.… Read the rest

Trading Area Potential in Retail Site Evaluation

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.… Read the rest

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.… Read the rest

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.

  1. License Plate Surveys. By recording the license plate numbers of automobiles in the store’s parking area, retailers can obtain customer home addresses.
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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.… Read the rest