Assignment: Retail Location Strategy
Selecting a location for your retail store is one of the most important decisions you will make as a small business owner. Picking the right location can lead to success and profits - choosing the wrong spot for your retail operation could put you out of business.
"THINGS YOU NEED TO KNOW BEFORE SELECTING A RETAIL LOCATION" (modified from an article written by Mark Smiciklas )
Purpose:
The purpose of this individual assignment is for students to experience first-hand what is involved in locating a suitable space for their future retail establishment.
This activity is to be completed by each student as an individual assignment. Assume you will be opening a retail establishment and you need to locate a place for your new store.
Students are to identify:
- what type of retail business they are interested in opening and where it will be located,
- the demographics for their target market,
- the competition which will affect their business,
- a traffic pattern for the chosen location,
- the merchant association for their business district, and
- the city bylaws, zoning and planning issues.
Section:
NOTE: Assignment requirements, typed paragraph form, min. 5 pages max. 20 pages (excluding cover page, tables of contents, and bibliography), 12 pt. font, double spaced.
Using the information provided in the article "7 Things you need to know..." (see in LMS) and as stated in Chapters 7&8 of the text, you are required to find an actual location for your Retail Business which you will be opening once you graduate from this program. Pay close attention to the 22 questions and use them to answer the following:
1. Type of Retail Business and Proposed Location address:
a) What products and how many different kinds of products will you be selling?
b) How much square footage and storage space is required to accommodate your product mix?
c) How much should this type of business expect to pay in rent per square foot?
d) Will office or services space be needed?
e) What will your target audience expect when they enter your store? - make a list of all the factors you can think of including display space, # aisles, aisle width, shipping/receiving area, storage space, office space, in-store traffic flow, etc. Once you visualize what the shopping experience looks like for your customer, you will gain a better idea of what will be required in a location.
2. Demographics.
a) What is your target market? (i.e. gender, age, income level)
b) What neighborhoods are home to your target market?
c) How far will prospective customers travel to shop at your location?
d) What are the statistical trends in a proposed location i.e. population growth; income growth; aging trends, etc?
e) How might this affect your store 5 or 10 years after locating?
f) What are the employee demographics in particular areas? With labour shortages becoming an ongoing challenge for retailers, does your proposed location have access to potential full time and part-time employees?
3. Competition.
a) Who will be your competition?
b) How close are they located?
c) What effect will they have on your business?
d) What will differentiate you in your customers mind?
Make sure that you have thorough knowledge of all the competitors in a proposed location, good and bad. Bad competitors are those that will have a negative effect on your business. Some examples might include retail stores that might be selling the exact same products (at a discount) or stores that attract the opposite target audience as your retail operation. Good competitors are retail stores that compliment your business by drawing a similar target audience to your store's surrounding area. A good example are retail "pockets" that exist in many cities - shopping destinations that attract larger numbers of consumers by offering complimentary stores in close proximity to one and other i.e. fashion districts, areas with a high concentration of art galleries, auto malls, etc.
4. Traffic Patterns.
a) Is there access to the store by traffic moving in both directions (both by car and on foot)?
b) What is the number of cars passing the store location?
c) What is number of pedestrians walking by the location?
d) What is the proximity to public transit?
David Gray, Principal of DIG360, a retail consulting firm in Vancouver, BC, shares some suggestions about scoping out store locations in a recent article in BC Business. "If you're savvy about it, you do a whole lot of looking. You'd be in a car and do it, and then you'd be on foot. And you'd go weekends and weekdays, just to make sure there's not a big traffic difference. Find out which side is the busy side of the street, and check out where the parking is."
5. Merchant Associations.
a) Is there a strong merchant's association that can help promote and maintain business in the given area?
b) Who is the managing director?
c) Do they offer group advertising programs, group insurance plans, and collective security measures?
6. City By-Laws, Zoning and Planning.
a) Zoning - Are there any restrictions that might prevent you from doing specific renovations or leasehold improvements?
b) By-Laws - What are some of the laws that might have an effect of your retail operation? For example, are you able to use the space in front of your store for promotions...are you restricted from operating during certain hours, etc?
c) Planning - Are there any major development plans that could impact your retail operation? Is there any major road construction planned close to your store?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.