Selling in the right Place

Question 1

The three main aspects of being in the right place

Answer 1

location store layout store planning.

Question 2

Store Location

Answer 2

Is a way of communicating with customers. It’s a one time decision for many retailers because of the lasting effects.

Question 3

Some principles that may guide in the decision making process for choosing the right location.

Answer 3

Market Area Potential Customer accessibility Growth Potential Business interception Cumulative attraction of trading area Compatibility Minimising the competition hazard Site economics

Question 4

Market Area Potential

Answer 4

Is there sufficient market potential in the target market area? This is determined by counting the nr of people in the market area and determining their purchasing power and willingness to spend money.

Question 5

Customer Accessibility

Answer 5

Its the ability of a particular outlet to reach its customers.

Question 6

Growth Potential

Answer 6

It would be pointless for a business to open in an area which is depopulating or if the demographics are changing.

Question 7

Business interception

Answer 7

A location must be chosen to intercept consumers when they are heading to their traditional retailers.

Question 8

Cumulative attraction of trading area

Answer 8

Location will be determined by competitors and buying behaviour of customers.

Question 9

Compatibility

Answer 9

Consider factors that contribute to the compatibility between two or more shops.

Question 10

Minimising the competition hazard

Answer 10

Current and future potential competitors must be identified and considered.

Question 11

Site economics

Answer 11

Analysis of characteristics on site such as, size, shape, ability to carry large and heavy structures etc.

Question 12

Selecting a province

Answer 12

Regional Compatibility Proximity to markets Labour Business Climate

Question 13

Regional Compatibility

Answer 13

Determine which of the 9 provinces has growth potential and then establish how compatible the store is with in its region

Question 14

Proximity to Market

Answer 14

Indicates accessibilities to various markets. The proximity to suppliers must be compared withe proximity of the market. Competitiveness, transport costs and waste disposal alternatives are important things to consider.

Question 15

Labour

Answer 15

How many workers are available in the region and their level of education, training and experience. Determine what kind of labour is needed. (prepare job descriptions.

Question 16

Business Climate

Answer 16

This includes the provincial authorities and their attitude towards the proposed type of business and the general business climate.

Question 17

Selection of town a town or city:

Answer 17

Population Trends Local Laws and Regulations Competition Compatibility with the community The availability of services

Question 18

Population Trends

Answer 18

Population growth trends, family size, age , distribution, education, income levels, religion, gender and race are all factors that should be considered. Location should match the market for the product or service. More consumers during holiday or week?

Question 19

Local Laws and Regulations

Answer 19

pay attention to Local Laws and Regulations that apply to certain area.

Question 20

Competition

Answer 20

The identity, nature, size and competitive advantages of competitors must be determined. The number and type of competitors will serve as an indication wether the market is saturated or not and if there is a place for one more.

Question 21

Compatibility with the community

Answer 21

Community has become a strong force in the establishing of a business.

Question 22

The availability of services

Answer 22

Cost of water and electricity quality of police and fire departments transportation systems

Question 23

Selection of Premises

Answer 23

General Specific

Question 24

General considerations

Answer 24

1. The history of the premises can influence the suitability 2. Newly built premises can contribute positively to the image of the business 3. May be cheaper to buy existing premises that to build new ones. 4. Premises can be leased

Question 25

Specific Considerations

Answer 25

Catchment or trading area sales potential size of the premises Physical condition of the premises Atmosphere and surrounding businesses Business hours, accessibility and parking Visibility

Question 26

Catchment or trading area

Answer 26

Retailer with a wide range of products may attract customers from greta distances. If roads and transportation networks are inadequate; this will reduce the size of the catchment area. Determine the geographical bounds of the catchment.

Question 27

Sales potential

Answer 27

The potential number of sales a retailer can make during a specific period.

Question 28

Size of the premises

Answer 28

Does the premises have sufficient space? too big too small? Will they offer expansion possibilities in the future? The retailer has to have a good idea of how much space is required for the retailing activities. This entails having a vision for the future. Implications needs to be considered as more space will increase rental costs.

Question 29

Physical condition of the premises

Answer 29

Repair and maintenance may be more tricky for older premises. (plumbing, electrical wiring, structure etc.) Look and feel are largely determined by the state of the building and this will influence the customers perception. Old premises may be cheaper on the short run but may become more expensive in the long run.

Question 30

Atmosphere and surrounding businesses

Answer 30

Take crime precautions. The bad odours of a company next door may influence your “restaurant” negatively. Often see restaurants together because it creates a socially active and vibrant atmosphere. Surrounding businesses may be complementary, damage the image of the business or offer direct competition.

Question 31

Business hours, accessibility and parking

Answer 31

Location will largely determine business hours. The availability of parking and parking fees needs to be considered as it may influence the consumer patronage. Investigate the developments in the area which may result in the main road being closed or diverted due to developments or changes.

Question 32

Visibility

Answer 32

Most retailers need to be seen to be successful. When people walk past an outlet they see it, remember it and eventually try it. In some cases the visibility is not so important as the strategy to market the business, is build around certain uniqueness or mystique, which will differentiate it from others.

Question 33

Basic locations for retailers

Answer 33

Central Business District Suburbs Shopping Centres and Malls Near Competitors Near Outlying Areas

Question 34

Central Business Districts

Answer 34

Centre of town. Where business established themselves early in development. For many retailers there is no space in the CBD forcing them to the suburbs. CBD has become a crime invested area and only some types of businesses can be there. There is however a movement of “Urban Renewal” Until regulations changes and authorities improve safety, enforce the trade law and remove informal businesses the CBD will be a dream

Question 35

Suburbs

Answer 35

Small stand alone premises are found all over and its typically cafes, video stores, hardware stores, liquor stores. Many of these are located in converted houses in busy streets. These retailers rely heavily on the population in these areas for business. There is still a place for these stores but they find it hard to compete with many larger businesses in shopping centres and malls. The convenient nature is mostly their differentiating factor.

Question 36

Shopping Centres or Malls

Answer 36

Medium and large shopping centres have become the oder of the day as they are popping up all over. They have a unique combination of stores under one roof. These stores are selected carefully in oder to offer the best combination of stores to its consumers. Developers wants these malls to become destination centres whereby the total shopping experience is transformed to one of entertainment and pleasure. Suburban (3-12) Community (12-50) Regional (50-100) Power ( combines the drawing strengths of a large regional mall with the conveniences of a neighbourhood mall.)

Question 37

Near Competitors

Answer 37

Is the retail location compatible with nearby stores and businesses. Competitors often attract customers who often end up buying products from other retailers.

Question 38

Near Outlying Areas

Answer 38

It is not advisable for a retailer to locate to remote areas, since consumer traffic in these areas are minimalistic and infrequent. Often these stores open to fill a gap in the area and offer convenience to people in the area. If they become popular and build a following they may become successful although it is seldom that the retailers are in a position to capitalise their business.

Question 39

Selection Criteria for Selecting the right building

Answer 39

Size Storefront Signs Display Windows

Question 40

Size

Answer 40

Should be large enough to accommodate daily activities. There must be enough room for customer, movements inventory, displays, storage, work areas, offices. Future developments should be taken into consideration. Size alone is not enough for a retailer to make the decision, they should also look at the construction and external appearance of the building under consideration.

Question 41

Storefront

Answer 41

All retailers have to capture the customers attention and attract them into and through their store to look at and buy merchandise. The storefront, sign, window and entrance creates the face that gives the customer their first look at the stores personality. The stores interior, exterior layout and the merchandise displays can all be designed to help the retailers sell. Retailers should not underestimate the importance of the entrance into a store.

Question 42

The three basic Storefront designs

Answer 42

A straight front: runs parallel to the street or the walkway. An angled front funnels customers into the store, making window dressing easier and displaying more merchandise. An arcade front uses a variety of window and door signs, more space is available for window displays which leaves less space inside.

Question 43

Storefront Checklist:

Answer 43

Clean? Decorated and attractive? displaying a range of products? Co-ordinated with signs and windows? Fit in with surrounding establishments, while being recognisable?

Question 44

Ideal Store Entrance:

Answer 44

entrance should be large and inviting, if possible at street level. For control and customer circulation, one entrance is best. (max 2) Open and inviting looks. Entrance clearly marked?

Question 45

Signs

Answer 45

Effective way of communicating with customers. Often read, inexpensive, always available, can easily be changed. They should be visible, simple and clear. The message should be brief, clear, simple and legible during the day or night. Standard signs allow a customer to identify a particular retailer.

Question 46

Problems with signs

Answer 46

illegible, poorly designed, located in the wrong place, poor condition.

Question 47

Signs Checklist

Answer 47

Name clear and easy to read? Eye catching? Original or distinctive? Consistent with the storefront, windows and store image?

Question 48

Display Windows

Answer 48

Reflects stores personality. Large or small, best impression when they are clean, original and tidy. Must reflect the customers needs and what is important to them. Should be changed on a regular basis to create the concept of freshness. Show merchandise available in store and props can be used to increase impact. Themes may be co-ordinated with events, holidays and seasons.

Question 49

Closed Window Display

Answer 49

They are completely separated from the store interior so customers cannot see inside. This allows customers to look more closely to the displays without being distracted by the store interior. Displays can be more complete and lighting can be better controlled.

Question 50

Open Window Displays

Answer 50

Allows passers- by to see in the store. This makes the store an integral part of the window display and restricts the possibilities of self contained display windows.

Question 51

Layout

Answer 51

Layout is the arrangement of merchandise, fixtures and the method of display. The store design and layout must fit the strategic framework of the outlet AND it must match the retailer’s image. One of the primary objectives of store layout is to draw the customers’ attention to the merchandise on offer. A retailer’s success depends on a well-planned floor design. Stores are generally designed in grid iron or free-flow arrangements. These arrangements are based on the location of fixtures and aisles. There are three basic store layout patterns: Grid Free-flow Boutique

Question 52

Planograms

Answer 52

When working in retail you will hear the word planograms in the food department. Planograms are space management structures that were first developed for grocery stores. Planograms are based on the assortments planned for each store. This will differ from store to store as the planners look at the demographics of the customers as well as their purchasing behaviour. It works best for fast moving goods, for example food.

Question 53

Grid:

Answer 53

Arranges displays in rectangular fashion so that the aisles are parallel. The gridiron layout is the arrangement of aisles and fixtures in a repeating, rectangular pattern. It’s advantageous to small stores because of the simplicity. The regular sized aisles require little floor space. A lot of merchandise can be displayed in a limited amount of space. The use of the standard fixtures will save on costs. Building costs will remain at a minimum because this arrangements adapt to structural variations. Customers can find merchandise easily. Traffic Control is regulated through the store Unfortunately this layout tends to be uninteresting and limits the customers freedom of movement through the store.

Question 54

Free- Flow:

Answer 54

This is a very informal layout. Displays consist of various shapes and sizes. The fixture shapes and aisle patterns tend to be of an irregular arrangement. This is a flexible arrangement. A store can easily look larger or smaller by arranging the fixtures, without affecting the general layout. Amount of stock on display can be varied to match different sales variations without removing movable display stands. This can contribute in creating a unique look.

Question 55

Boutique:

Answer 55

This layout divides the store into a series of individual shopping areas, each with its own theme.

Question 56

Non- selling space

Answer 56

change rooms, staff areas, office areas, cash register, storage, repair and service areas. Except for the cash area, the other non-selling spaces should be in the lowest traffic area of the store The cash area should be chosen with care as it should not intimidate the customer when the walk on but allows staff to survey the whole store.

Question 57

Decor

Answer 57

Shelves and fixtures Colours and finishes Floor Covering Lightning *read p66-67

Question 58

Store Planning is done by

Answer 58

In big retailers the store planning is done by head office and applied by the departmental managers and visual merchandisers in the different stores.

The departmental manager is responsible for implementing all the planning per event that is sent through from head office.

A manager receives a block plan from head office for every big event/ season during the year.

Question 59

The block plan and final plan consists of:

Answer 59

Block plan is based on previous sales figures or projected sales figures for that season. The plan shows the allocated space on the ground plan and the designation of selling areas on the sales floor. This allocation of space is based on the merchandising needs, traffic patterns, proximity to related merchandise and projected sales.

The final plan will have all the counters, cases, tables and freestanding fixtures drawn in place. It will also show aisles, passageways, dressing rooms, exits and entrances, escalators, elevators and many more details.

Question 60

Definition of a floor plan

Answer 60

A floor plan is a flat representation that gives the length and width (or depth) of an area as seen from overhead, while an elevation is a flat, front-on view that shows the width and height (After all the above planning has been done, the manager will then indicate on the floor plan where each department will be placed in the store and how big each department will be. The layout of the fixtures will also be planned. All this information will be communicated to head office before implementation of the seasonal planning.)

Question 61

The manager works with the following tools:

Answer 61

• Equipment library (sizes of equipment)
• Equipment proposal per department
• Seasonal contribution calculations
• Floor plan

Question 62

The equipment library shows

Answer 62

How much space each item/fixture will take up on the floor.

Question 63

The Equipment proposal

Answer 63

This proposal shows the square meters per department and the preferred equipment per department indicated by head office.

The manager will then choose equipment per department, using the seasonal contribution calculations and indicate how many equipment he/she uses per department.

This will be discussed with the store manager and it will be submitted to head office.

Question 64

Seasonal contribution calculations

Answer 64

This shows the sales contributions for the business, the store and the department.

Head office indicates the size of each department, while the store proposes a size and from this proposed merchandisable square meters they draw up a proposal with the selected equipment.

Question 65

P-O-P displays

Answer 65

P-O-P displays are important because they also have to be worked into the floor plan per seasonal event. P-O-P displays stimulate impulse buying to increase sales of items. Think of till points and waiting areas.