Most of the retail site evaluation procedures use the concepts of “trading area adequacy” and the “trading area potential” to predict the total trading area business and the share of business a particular retailer can expect. Read More: Trading Area Adequacy Trading area potential, it is something, which is predicted ability of a trading area to provide acceptable support levels for a retailer in future. The two important concepts in trading area potential are residential support levels and non-residential support levels. Residential Support Levels A retailer is to concentrate on the most important source of business, namely the area’s residents, after sufficiently identifying the gross trading area. To measure a trading area’s potential consumers, the retailer is expected to analyse population or demographic and household or residential variables. Population or Demographic Analysis. A trading areas total capacity to consume is partly a function of the total number of population and Continue reading
Retail Management Basics
Site Selection Criteria in Retail
There is no such thing, such as a “Perfect site” in retailing. Retailers must decide which attributes are the most important to their business. Let’s summarize the key criteria critical to the site selection decision in retailing. Sales potential for the site. The demographic, economic, and competition factors and strategies by which management hopes to create a competitive advantage determine the estimate of sales for a site. Growth potential should be a basic consideration in the evaluation of the sales potential. Accessibility to the site. Automobile and public transportation access to the site and adequate parking may well be defining criteria. There may be a number of barriers to the target market seeing the site as accessible. The barriers may be geographical, such as mountains or rivers. They may be psychological, such as the perceived quality of the neighbor hoods that customers must travel through. Barriers are often man made, Continue reading
Margin Turnover Model of Retail
Successful retail operations depend largely on two main dimensions: margin and turnover. How far a retail enterprise can reach in margin and turnover depends essentially on the type of business (product lines) and the style and scale of the operations. In addition the turnover ,also depends upon the professional competence of the enterprise. In a given business two retail companies may choose two different margin levels, and yet both may be successful, provided the strategy and style of management are appropriate. Margin Turnover Model Ronald R. Gist “Suggested a conceptual frame work, using margin and turnover, for understanding the retail structure and evolving a retail strategy.” Margin is defined as the percentage mark tip at which the inventory in the store is sold and turnover is the number of times the average inventory is sold in a year. Margin Turnover Model is a diagrammatic representation of the frame work and Continue reading