Selecting a Store Location
What you’ll learn to do: Explain the significance of selecting a store location
Your stores location will ultimately influence the consumers view of your company [brand]. Opening a store in the wrong location will cause your shop to stick out in a bad way. Think wearing a tank top to a black tie event. Consumers will be confused if the store seems out of place and ultimately not shop.
Studying customer foot traffic, walkways and outside factors all come into play when selecting a store location. Having consistent walk by foot traffic will cost more in monthly rent. If you are selling impulse purchase items this is a big benefit. Opting for a second or third floor location will save you money on rent and provide privacy. Stores planning on doing extensive marketing would benefit from the cheaper monthly rent.
In a mall, designers use elevators and escalators to encourage movement around the mall and impulse purchases .
- Define environmental analysis
- Discuss why location selection needs to involve significant analysis of data
- Explain the effects of location choice on short and long run planning
You are a consultant and have been hired by a high-end steakhouse to find a location for their new restaurant. They are looking at several locations, but are concerned about making sure the area where they locate can support their price structure. They know that there are many options to eat in the community they are targeting. When looking at the environmental aspects of this location analysis process, where would you start?
After reviewing the articles and watching the video, what things are important in analyzing the environment for a new business?
There are many environmental factors that surround customers and competition. The changing retail scenario is important to note, especially at the point where you are selecting a location. Changing locations is difficult and costly, so insuring a good fit from the beginning through effective analysis processes is an important step.
Can a location afford the prices charged by the new steakhouse? Research income levels, median house prices, education levels and other aspects of the financial demographic status of an area to see if this would be a good fit. Checking out other restaurants and retail stores in the area will also be helpful here.
Demographic and Social Factors
Ages of the people in the community, along with information on shopping (in our case eating out) habits are helpful. Is there a large number of double income families? Do many of the families have young children? If the population of the area does not need your product or service, it will be impossible to create a successful retail endeavor.
What other restaurants or retail stores are in the area? If there are too many similar to yours it may be difficult to create a market share in a location. If there are already four steakhouses in the area, at varying price points, breaking in to the market may be complicated.
So once you have done review from an environmental standpoint, take a look back at the four “P”s of retail sales
When looking for a place to put your new endeavor, you need to also make sure that the market wants your product and are willing to pay the price your product demands. Location (place) is the key to a successful endeavor, but you must insure that the place you pick will support the product and price.