Retail Location Analysis Quiz and Flashcards

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Questions and Answers

What is one of the factors that affects the convenience of a retail location for customers?

Pedestrian and vehicle customer traffic (correct)

Occupancy cost of the location

Cost of merchandise sold

Restrictions placed on store operations by the property manager

What is a type of retail location that is not connected to other retailers and has greater visibility and lower rents?

Freestanding site (correct)

Central business district

Urban location

Planned retail location

What is a disadvantage of freestanding retail locations?

Lack of synergy with other stores (correct)

Higher rents

Less convenience for customers

More direct competition

What is the term for the traditional downtown business area in a city or town?

Central business district (CBD) Signup and view all the answers

What is one of the advantages of freestanding retail locations?

Ample parking Signup and view all the answers

What is one of the factors that retailers consider when evaluating the cost of a retail location?

Occupancy cost of the location Signup and view all the answers

What is a characteristic of unplanned retail locations in urban areas?

High security required Signup and view all the answers

What is a disadvantage of urban locations?

Shoplifting Signup and view all the answers

What is a characteristic of main streets?

Lower occupancy costs Signup and view all the answers

What is a responsibility of shopping center management?

Maintaining common facilities Signup and view all the answers

What is a characteristic of neighborhood and community shopping centers?

They are attached rows of stores with onsite parking Signup and view all the answers

What is a type of shopping center?

Strip Centers Signup and view all the answers

What is a characteristic of CBDs?

Higher occupancy costs Signup and view all the answers

What is a characteristic of urban locations in the United States?

Higher density urban areas Signup and view all the answers

What is a crucial factor in selecting a retail location that aligns with the retailer's strategy?

Shopping behavior of consumers Signup and view all the answers

What type of shopping situation is characterized by consumers seeking convenience?

Convenience shopping Signup and view all the answers

Why is location less important for retailers with unique offerings?

Because they attract a niche market Signup and view all the answers

What is a key consideration when evaluating the profitability of a retail location?

Strategic fit with the target market Signup and view all the answers

What is a trade-off retailers may face when having multiple stores in an area?

Lower operational costs and potential sales cannibalization Signup and view all the answers

What factors should retailers consider when evaluating an area for a store location?

Economic conditions and competition Signup and view all the answers

What type of shopping center is characterized by an open-air configuration of specialty stores, entertainment, and restaurants?

Lifestyle center Signup and view all the answers

What is the primary purpose of a pop-up store?

To introduce and remind consumers of a brand or store Signup and view all the answers

What is a key characteristic of a good retail location?

Many people in the target market Signup and view all the answers

What is the primary goal of evaluating specific areas for retail locations?

To generate the highest long-term profits Signup and view all the answers

What type of shopping center is dominated by large anchors such as discount stores and warehouse clubs?

Power center Signup and view all the answers

What is a common feature of theme/festival centers?

A unifying theme carried out by individual shops Signup and view all the answers

What is the main benefit of omnicenters to tenants?

Lower common area maintenance charges Signup and view all the answers

What type of retailing concept involves leasing space to other retailers?

Store within a store Signup and view all the answers

What is a common location for merchandise kiosks?

Walkways of enclosed malls, airports, college campuses, or office building lobbies Signup and view all the answers

What type of shopping center is enclosed, climate-controlled, and has retail stores on one or both sides of an enclosed walkway?

Shopping mall Signup and view all the answers

What is one of the main reasons retail chains want to open multiple stores in an area?

To achieve promotion and distribution economies of scale Signup and view all the answers

What occurs when a retailer opens too many stores in an area?

Diminishing returns due to cannibalization Signup and view all the answers

When evaluating a site for a retail store, what is one of the key characteristics retailers consider?

The characteristic of the site Signup and view all the answers

What is an important factor in determining the demand for a new retail location?

The estimated spending of people within the trade area Signup and view all the answers

What is the definition of a trade area?

A geographic area that accounts for the majority of a store's sales and customers Signup and view all the answers

What is the primary zone of a trade area?

The area closest to the store location Signup and view all the answers

What is a reason why retailers may not open a new store in an area, despite achieving economies of scale?

The marginal revenues are less than the marginal costs Signup and view all the answers

Why do retailers need to open multiple stores in an area to justify the cost of building a new distribution center?

To achieve economies of scale in distribution Signup and view all the answers

Study Notes

Location Planning in Retailing

The occupancy cost of a location is a crucial factor in retail location planning.
Factors to consider when evaluating a location include:
- Pedestrian and vehicle customer traffic
- Restrictions placed on store operations by the property manager
- Convenience of the location for customers
- Cost vs. customer value

Unplanned Retail Locations

Freestanding sites:
- Advantages: greater visibility, lower rents, ample parking, no direct competition, greater convenience for customers, fewer restrictions on signs, hours, or merchandise, and ease of expansion
- Disadvantages: lack of synergy with other stores
Urban locations:
- Central business district (CBD):
  - Advantages: hub for public transportation, pedestrian traffic, residents
  - Disadvantages: high security required, shoplifting, parking is poor, evenings and weekends are slow
- Inner city:
  - Characteristics: high-density urban areas, higher unemployment, lower median incomes than surrounding metropolitan areas
Main streets vs. CBDs:
- Main streets:
  - Advantages: lower occupancy costs than CBDs
  - Disadvantages: fewer people, fewer stores, smaller selections, less entertainment, restrictions on store operations

Planned Retail Locations - Shopping Centers

Shopping centers:
- Definition: a group of retail and other commercial establishments planned, developed, owned, and managed as a single property
- Management responsibilities: common facilities, security, outdoor signage, and advertising
- Anchors: one or two major retailers
Types of shopping centers:
- Neighborhood and community shopping centers (strip centers)
- Power centers: dominated by large anchors
- Shopping malls: enclosed, climate-controlled, lighted shopping centers with retail stores
- Lifestyle centers: open-air, specialty stores, entertainment, and restaurants with design ambience and amenities
- Outlet centers: mostly manufacturers' outlets
- Theme/festival centers: shopping centers with a unifying theme, architectural design, and merchandise
- Omnicenters: responses to trends in retailing, including lower common area maintenance charges and more pedestrian traffic

Nontraditional Locations

Pop-up stores and other temporary locations:
- Purpose: focus on a new product or limited group of products
- Characteristics: temporary, not designed primarily to sell products
Store within a store:
- Retailers leasing space to other retailers
Merchandise kiosks:
- Small, temporary selling spaces, usually located in walkways of enclosed malls, airports, college campuses, or office building lobbies
- Characteristics: short-term leases, often operated seasonally

Matching Location to Retail Strategy

The selection of a location type must reinforce the retailer's strategy and be consistent with:
- Shopping behavior
- Size of the target market
- The retailer's position in its target market

Evaluating Specific Areas for Locations

Factors to consider:
- Strategic fit with target market
- Economic conditions
- Competition
- Cost of operating stores
The best areas for locating stores are those that generate the highest long-term profits for a retailer

Site Characteristics

Traffic flow and accessibility
Location characteristics:
- Parking facilities
- Congestion
- Visibility
- Adjacent retailers
Restrictions and costs

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Description

Assessing the suitability of a retail location considering factors such as occupancy cost, customer traffic, property restrictions, and convenience. Evaluating the trade-off between cost and customer value.

Retail Location Analysis

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