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.