1 / 25

Chapters 9 and 10

Chapters 9 and 10. RETAIL MANAGEMENT: A STRATEGIC APPROACH. Trading-Area Analysis and Site Selection. Administrative Items. Midterm – Feb. 16 th in class Next Class: Midterm format details Retail Institutions assignment questions

ingrid-pate
Download Presentation

Chapters 9 and 10

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Chapters 9 and 10 RETAIL MANAGEMENT: A STRATEGIC APPROACH Trading-Area Analysis and Site Selection

  2. Administrative Items • Midterm – Feb. 16th in class • Next Class: • Midterm format details • Retail Institutions assignment questions • Dr. Morgan’s presentation, “Toward Creative Practice in Social Enterprise” • Schwartz AUDITORIUM, 3:30-4:30 pm, Feb. 8th • Syncrude Recruitment • February 9, 11:15 am – 1:00 pm SCHW190

  3. Agenda • Introduce Trade Area Analysis and Site Selection concepts for application to your Retail Institutions Assignments • Appreciate the importance of location decisions • Understand trade areas and how they are delineated • Overview three different types of site locations • Consider Canada’s newest type of retail site location – the lifestyle centre

  4. The Importance of Location • Location is one of the most important decisions a retailer can make • “A retailer with a mediocre strategy mix can succeed with a great location whereas a good retailer may struggle in a poor location.” • Parasite v. Destination • Location can be changed, BUT • Location is the least flexible part of the strategy mix • Major financial commitment • Long term decision • Considerations of lease agreements • Considerations of location ownership • Impact of location change on bottom line (increased promotional dollars (awareness campaign)) • Impact of location change on loyal clientele – confusion, ill-will Goal = “one-hundred percent location”, p. 242

  5. Trade Area Analysis Site Selection Location, Location, Location Criteria to consider include: • Population • Density • Demographics • Economics • major industry characteristics • employment rates • availability of labour • Neighbours • nature of nearby stores • competition • Availability • availability of locations • legal restrictions • property costs • length of agreement • Accessibility • transportation access • parking availability • proximity to supplies

  6. 50-80% 15-25% The rest The Segments of a Trading Area (Fig 9.5) Trading Area: A geographic area containing the customers of a particular firm or group of firms for specific goods or services

  7. The Trading Areas of Current and Proposed Outlets (Fig. 9.2 ) Trading area overlap  Why would a retailer pursue such a strategy?

  8. How to delineate trading areas • Analogue models (Simplest) • Estimates sales based upon similar stores in area, estimated market share, competition and population size and density • Regression models • Use a series of mathematical equations to show associations between potential sales and a number of independent variables • Gravity models • People drawn to stores that are closer and more attractive than competitors’

  9. Reilly’s Law Reilly’s law of retail gravitation, a traditional means of trading-area delineation, establishes a point of indifference between two cities or communities, so the trading area of each can be determined • Uses population and distance between areas as measures • Good because: • Reasonably reliable method • Less costly to determine (two indicators) • Easy • Limitations: • Distance is only measured by major thoroughfares; some people will travel shorter distances along cross streets • Distance travelled does not reflect travel time and actual distance may not correspond with perceptions of distance • Assumes equal retailer efficiency City B City A 10 km 30 km Pop=10,000 Pop=90,000 Point of Indifference

  10. Huff’s Law Huff’s law delineates trading areas on the basis of: • product assortment • travel times and • the sensitivity of the kind of shopping to travel time. Huff’s law of shopper attraction is another gravity model. It determines the probability of a shopper visiting a location.

  11. Swiss Chalet Case Study • CLIENT: • Swiss Chalet is one of five restaurant chains owned by Cara. • Other brands include Harvey’s, Milestones, Montana’s, Kelsey’s; • presence in every province. • CHALLENGE: • To easily evaluate the potential for Swiss Chalet delivery and takeout for any market in the country to help determine how many new restaurants could be added to a market. • To communicate the delivery areas to the Call Centre staff so that customer orders could be efficiently routed and guaranteed delivery times could be met.

  12. Swiss Chalet Case Study SOLUTION: • Used HouseholdSpend data to provide a template for mapping • Showed: • key demographics • current Swiss Chalet delivery sales • total expenditures for food away from home • current market share of restaurant expenditures • Also provided (not shown): • Demographic Estimates and Projections data

  13. GIS Solutions:Resources and Case Studies • http://www.environicsanalytics.ca/services.aspx?item=trade_area_analysis_site_modelling • http://www.environicsanalytics.ca/tradearea.aspx • http://www.environicsanalytics.ca/case_swiss_chalet.aspx • http://www.mappinganalytics.com/trade-area-analysis/trade-area-analysis.html • http://www.directionsmag.com/articles/retail-trade-area-analysis-using-the-huff-model/123411 • http://www.esri.ca/en_resources/files/EC1_0057_1201_1B_Rona.pdf • http://www.pbinsight.com/files/case-studies/case-study-files/24HourFitnessCSweb.pdf

  14. 3 Types of Locations Isolated Store Planned Shopping Centre Unplanned Business District Choice will depend partly upon whether the retailer is a destination or parasite store

  15. CBD Revitalization in Canada • It has been said that Canadian cities are not in as much need of CBD revitalization as some US areas because we didn't have urban flight in the 60's • However, many CBDs did experience a decline in the quality and quantity of their retailing. • Consider Winnipeg • Some recent revitalization projects include: • Toronto, Victoria, Ottawa and Calgary (Talbot Consultants)

  16. Planned Shopping Centres in Canada:Fast Facts • There are about 4400 shopping centres in Canada (www.icsc.org) • About 1.2 million Canadians work in shopping centres • There are 14 square feet of shopping centre space per capita in Canada (23 in US) • Shopping Centre sales = $528/ft2 in Canada ($309/ft2 in US) – Colliers Canada, 2011 • Ninety-two percent of Canadians over age 12 visit some type of centre in an average month.

  17. Canadian Shopping Centre Trends BUT… • Sales at traditional enclosed malls in both Canada and the US have been on the decline. • Development has been slow • Vaughan Mills (opened Oct. 2004) was the first new mall construction after a decade of stalled development; encountered many difficulties • CrossIron Mills (opened August 2009 in Rocky View Alberta) was the first enclosed shopping centre development in Western Canada in over 20 years but had to reinvent traditional leasing with “Swing Shops” • “Most Canadian malls are mediocre emporiums peddling overpriced goods, barely superior to malls in the Third World.” - Paco Underhill

  18. Factors Contributing to Mall Decline • Mall merchandise is predominantly fashion; growth in other categories • Mall fashion stores appeal to teens yet few malls in Canada have done much to attract a teen market. • Many large retailers are moving "off-mall". (e.g. - The Sony Store, Bombay Company, Sears Canada) • Shoppers becoming more time sensitive and prefer frequenting one-stop shops • Shopper boredom with ‘chore shopping’ orientation of mall retailers (Talbot Consultants)

  19. Megamalls • The West Edmonton Mall was the first megamall in North America and remains the continent's largest today. • West Edmonton Mall Trivia http://www.westedmall.com/about/default.asp

  20. Life-Style Centres in Canada Park Place, Barrie, ON • The Village in West Vancouver • The Shops at Don Mills • Dartmouth Crossing

  21. Mixed Use Centres Questions: • Do you think it possible for an “open-air” concept of shopping to be successful in Canada? • When making a site selection decision for a lifestyle centre, what criteria should be considered? • What types of retailers would be appropriate to such a development? Explain.

  22. Can a lifestyle centre work in Atlantic Canada?

  23. Takeaways • Location is one of the most important decisions a retailer can make (inflexibility) • There are a variety of considerations in making the right decision (population, economic base, competitive environment, accessibility, availability) • The right decision depends on the type of retailer, its target customer, its image and overall strategy • When locations change the retailer needs to be able to adapt

More Related