Location Management-Trading Area Analysis

Written by: Nithin Narayanan

Trading area for a store can be accurately measured. As mentioned earlier the size of the Trading area depends upon a number of factors. The location of the major competitors of the retailer is also a factoring determining the size of the trading area. In such a case whenever the customers have a choice between two stores, the size of the trading area of these store decreases and the size increase with the increase in the distance between the stores as the target markets would not overlap.

The amount of time to reach the store also determines the size of the trading area. Barriers like toll bridge poor roads etc can reduce the trading area of the store. But with good and proper promotions a company can increase the awareness among the customers and in turn expand its trading area.

After the size, the retailer should examine the characteristics of the Trading Area. The characteristics of the trading area can be classified under the following headings-

* Population

* Availability of labor

* Proximity to the source of supply

* Marketing

* Regulations

* Nature and size of competition

But one thing should be kept in mind that different kinds of stores have different trading areas in terms of size as well as nature. The trading area of a Department Store would be different from the Trading Area of a high end boutique.

In India the Trading Area Analysis does not hold true, as we have small markets which cater to the local community. Such as South Extention, Lapat Nagar Market, Khan Market and so on. Every locality will have a small market which provides for the customers, unless the retailer offers something unique to the customer which would otherwise be difficult to get.

Why shop online

Crowded stores, hard to find parking and long checkout lines. Feeling frustrated? Then, why don't you try online shopping? Half of the US is already doing it!
 
This year, because of a number of economic headwinds, a slumping housing market, a credit crunch and higher food and fuel prices, consumers have become more frugal about spending and retail stores have been struggling.
 
Analysts in the United States fear that this holiday shopping season will be the weakest in five years.
 
But online sales continue to be strong, proving that more and more consumers now prefer internet shopping over going to their local high street.
 
The research firm, Forrester Research, predicts US online sales of $33 billion this holiday season, up 21 percent from a year ago. The internet research company comScore Inc. projects a 20 percent online sales growth for the holiday season across America.
 
New York City has been flooded this holiday season with European tourists who want to take advantage of the weak dollar. Bea Peters, visiting from Berlin, Germany, said she still enjoys the social experience of shopping in person.
 
"It's stressful definitely, you have millions of people, but I love this feeling to go home with I don't know, a hundred bags and this is just belonging to Christmas somehow. And online you just don't have this beautiful feeling of having something new," said Peters.
 
Standard and Poor's Marie Driscoll, a retail equity analyst, said "internet shopping is growing considerably faster than retail as a whole."
 
"Some of the specialty apparel retailers I follow, are reporting e-commerce gains of 40 to 100% on a monthly basis... So the internet is definitely capturing a larger share of their customer's dollar," she added.
 
Driscoll argues that today's consumer has become more at ease with online technology, whereas 10 years ago many weren't comfortable giving out personal information, like credit card details, over the internet.
 
The National Retail Federation has noted that even though more than half of U.S. homes now have high-speed Internet access, a growing number of office workers feel more comfortable shopping online at work. 
 
Shopping
This year, according to a survey conducted for Shop.org, the online arm of the NRF, 54.5 percent of office workers with Internet access, or 68.5 million people, are expected to shop for holiday gifts from work, up substantially from 50.7 percent in 2006. 
 
But some analysts say one problem of shopping online, whether at home or at work, is that it distracts people from focusing on more important tasks.
 
Bruce Mcelroy who works for a web design firm in Dallas, Texas, admits he does shop at work, but says it usually isn't a problem.
 
Another plus for the online retail market is its distribution centres.
 
Brick-and-mortar outlets have to pay real estate costs to display their merchandise in person, whereas online sites can display many items all on a single web page.
 
Even with retail store sales in a slump this year, it's unlikely that all shoppers will turn solely to the internet for their holiday needs.
 
Some shoppers in New York City admit they turn to online shopping when time is a factor, but still enjoy going out to the stores and seeing the merchandise close-up.
 
But as busy New York mother Liz Ehrlich says, online shopping does continue to have its advantages.
 
"It's easier. I have two little kids, it's so much easier to plan ahead and get it all sent. And you can get so much more online, I mean you can get almost anything" says Ehrlich.
 
- Contributed by Ankita Sinha

India Inc’s confidence down, says survey

Business confidence of India Inc has dropped in the wake of the US sub-prime crisis, surging crude oil prices, high interest rates and the appreciating rupee, says an industry survey.

The Business Confidence Survey conducted by the Federation of Indian Chambers of Commerce and Industry (Ficci) on 321 companies also indicated that the outlook for exports, investments, employment and profit has taken a severe hit.

"The industry's perception is that growth is slowing down. The weakness in the growth momentum is not only due to the slowdown in exports but also due to moderation in other sectors of the economy," Ficci said in a statement.

The rupee, which has appreciated by almost 15 percent in the past one year, has adversely affected not only exports but also companies connected with the sector.

Industries ranging from capital goods, automobile and steel, to textiles, handicrafts, leather and marine products are all showing signs of a slowdown.

The chamber has suggested the central bank reviews its credit tightening policy.

Serious efforts should also be made to tackle the appreciation of the currency, it noted.

- Contributed by Ankita Sinha

Beauty Retail Business

Even as consumerism soars in the country and retail giants step on the gas to capture the retail market, experts are unsure of the spending capacity of the consumers. 
 
In fact, some believe that eventually, in any given locality or suburb, only two-to-three players will be able to sustain footfalls. With most stores following a synchronised format across outlets, there is little segregation based on consumer profile. 
 
And this is where Dabur, which recently announced its foray into retail with its health and beauty stores — New U — plans to step in. However, whether or not a large format wellness store will be able to sustain is anyone's guess. 
 
There aren't many concept stores in the country yet. At the same time, New U, a 100 per cent subsidary of Dabur, will be competing with the likes of Shopper's Stop, Lifestyle and biggies Reliance and Future Group. 
 
The stores will house everything from cosmetics and beauty products to healthcare and wellness products from a wide range of companies like P&G, Dabur, Hindustan Unilever and Johnson & Johnson. At the same time, they will also offer prestige products like Lancome, Clinique and MAC. 
 
"Our idea is to offer the consumer a host of beauty and wellness products under one roof. At the same time, our stores will have a number of advisors who will assist the consumer in making a choice," explains Peter Baker, CEO, New U. 
 
He hopes to avoid brand bias by employing advisors for the stores who will be trained individually by each company but will eventually be on the New U payrolls. 
 
In an attempt to utilise store space to the maximum and achieve greater sales and not simply footfalls, New U will customise its stock according to the location of the store. 
 
"We won't have prestige brands selling out of all our stores. For instance, stores where we are likely to have more middle-income footfalls, we will focus on mass market brands, with a brand like L'Oreal being the high-end one. So, our flexible product offering will be our USP," says Baker. 
 
Aware of the cut-throat in-store competition among various brands, Baker and his team have also started working on a parallel project — brand New U. The range will consist of numerous FMCG items like shampoos, creams, sanitary napkins, baby products, etc. 
 
Though he plans to combine the Indian science of Ayurveda and western scientific knowledge for the development of these products, Baker will get the formulae developed at labs in the UK, Italy and Thailand. "The difference of price in the New U products compared to leading brands will be between 15 and 25 per cent, with New U of course being cheaper," he reveals. 
 
With planned investments of $22 billion over the next five years, the retail sector is expected to grow 40 per cent to $427 billion by 2011. 
 
Organised retail, which is almost 4 per cent of the whole is in turn pegged to hit $64 billion by 2015. Statistics put Dabur on the frontfoot. Aiming for a 2009-10 break-even and targetting six stores in the NCR region by March 2008, Baker is hopeful of the success of the New U concept. 
 
Dabur's initial investment in New U is to the tune of Rs 140 crore, a figure that will rise when New U will begin its pan-India rollout. "By 2010 we plan to open a total of 160 stores at a rate of two stores a week," says Baker.
 
- Contributed by Ankita Sinha 

Where to find the coolest buys

Last spring, tour operator Cox & Kings organized a two-week itinerary in India for 15 women pals celebrating a 60th birthday. The trip was, according to one in the group, "shopping galore." They bought dhuri rugs in Madurai. They picked up jewelry in Chinai. And then they landed in Kochi (nee Cochin), an historic port city on the Malabar coast that also happens to offer an astounding array of colonial antiques. The women bought brass bowls and bronze statuettes. One, who was remodeling her house, snatched up tropical hardwood doors, gateways, columns, and furniture.

"The tour guide was flabbergasted," said one. "She'd never seen a group buy so much."

Of course, you don't have to travel farther than your local mall or Target Superstore to find global goods. And computer mice handle the traveling for Web shoppers, who are projected to spend $115 billion online this year. But according to the International Trade Administration's Office of Travel and Tourism Industries, Americans traveling overseas take their shopping seriously. Indeed, more than twice as many hit the stores than visit a cultural heritage sight or a museum. These shoppers seem to understand that the mall and the Web are unsatisfying substitutes for not only finding the right item, but finding it in the right place.

"The best purchases have a good story behind them," says Suzy Gershman, author behind the "Born to Shop" guidebook series, "not only about the item itself, but what you went through to get it, how many cups of tea you drank, who you met along the way."

We've rounded up 10 luxury goods (everything from pottery to precious metals) and identified the ideal place in the world to find each—a place with a tradition of expertise, quality, and innovation (not to mention a pretty fun place to do business). To do so, we consulted a range of authorities, including shopping gurus, tour operators, and item-specific experts. Their responses produced a mix of expected and unexpected results. It's no surprise, for example, that Geneva is ground zero for fine watches or that Florence's leather artisans produce handbags as soft as silk. But who knew that Sao Paulo, Brazil has suddenly emerged as a locus of designer clothes? Or that you can pick up an oil reproduction of any masterpiece painting in Saigon?

Yet just because you've found the right place doesn't mean that the challenges are over. You might even feel a little more put out. Consider a bespoke suit from London's Savile Row, whose fastidious tailors have outfitted the likes of Winston Churchill and David Beckham since the 19th century. According to James Sherwood, author of "The London Cut: Savile Row Bespoke Tailoring," each suit consumes an average of 52 man hours and requires you to be measured, fitted, and consulted at least thrice. Tailors in Vietnam, on the other hand, can knock out a custom suit in one working day.

But quality always trumps convenience, avows Sherwood. "Comparing those suits is like comparing an original Raphael Madonna with a chalk drawing on the flagstones outside the Ufizzi Gallery," he sniffs.

A well-stocked district doesn't always guarantee a good deal, either. Silom Row in Bangkok, for example, has been teeming with gems since Thailand began to aggressively buy stones from the mines of Burma, Sri Lanka, and Madagascar, according to Richard W. Wise, a Massachusetts jeweler and author of "Secrets of the Gem Trade." Yet Wise admits that bargains here can be few and far between: "I'd love to say go to Bangkok because the gems are cheaper, but the truth is that there are just more of them."

When it's time to buy, say experts, even the most well-informed buyer doesn't always have an advantage. For example, it certainly pays to know about knot counts and thread materials before haggling with the hundreds of rug sellers among the 4,000-odd stalls of Istanbul's Grand Bazaar. But even John B. Gregorian, who comes from a family of carpet sellers and recently authored "Oriental Rugs of the Silk Route: Culture, Process & Selection," concedes that it isn't always easy to determine a carpet's quality.

"At some point," he says, "you have to treat it like a painting: you buy it because you love it."

And then there's the final challenge, too: getting all that stuff back home. Some of those 60th birthday shoppers paid hundreds of bucks to ship their purchases from India. The more prudent simply stuffed their suitcases to the breaking point. "We all had major overweight on the flight back home," one said. "But it was worth it."
 
- Contributed by Ankita Sinha

Location Management

Written by:Nithin Narayanan

One of the most significant reasons for a retailer is to choose the location of the store. Location management is emerging as one of the most important aspects of retail strategy. In India a good store location will most certainly enable the retailer to have a successful venture even if the other marketing communication channels and activities are mediocre.

The selection of the store location should be supported by in depth research. Store location requires sizable financial resources as it is a long term investment .There are many factors that come into play while choosing a store location. This would generally include size of the population, infrastructure, accessibility, level of competition, income of the residents in and in the surrounding area, legal restriction and other factors.

The other important factor of location is the 'Trading Area'. Trading Area is the area from which the retailer or the retail store manages to attract its customers. Each Trading Area is further divided into three parts namely: Primary, Secondary and Fringe Area. The Primary trading area would generally have 50 to 60 per cent of the store's customers. The secondary area would comprise of 20 to 30 per cent of the customers and the Fringe area would include all the remaining customers.

The size of the trading area is directly related to the size of the store. As the store gets larger the trading area also increases. But this is not always true, as it depends on multitude of factors such as the product, variety offered, marketing and so on.

Colour Dynamics in Retail Environment

Written by: Nithin Narayanan

Colours play a vital role in the shopping ambience that the customer experiences. The very customer who enters a store does not realize that the colour schemes that he/she observes, influences their shopping decision. Many studies have been conducted about the consumer perception of various colour schemes. 
The one common fact that is seen in the findings of these studies is that the emotions that these colours trigger are purely captivated in our subconscious mind and in turn results in influencing our everyday decisions. 
There has been a sort of colour revolution in the past twenty years. One crucial aspect of colour is to get the schemes and the harmony right, from the very start. 
However it must be kept in mind that colour is also a vehicle of expression of cultural attributes.In other words each colour depicts different things in different cultures. For instances in order to create the mood for festivals, the in-store communication uses such colours as-
  • Black and orange for Halloween
  • Red and pink - Valentine's Day
  • Red and green for Christmas.
A lay man would not be aware of the meticulous planning that goes in every aspect of store design and how it communicates aloud to the people who embark on the so called retail therapy on a regular basis. Our try is to make you aware of the little nuances that take place in the market place so that you could notice and admire the creativity that makes business interesting.