Retail Location Activity Reflection
Several key factors go into making a successful and profitable business, one of those factors is location. Location, location, location is one of the key things you always hear people say when it comes to determining where to leave. This mantra also applies to businesses.
When retailers are looking for the perfect spot for a business they should first look at what market segments they will be going after. “It is crucial for retailers to identify the market segments they aim for and to understand the needs of customers in the segments” . Once retailers understand their market segments then they can get into the more generic details of the actual location like finding a spot easily accessible to the public, or a location that has good traffic flow allowing customers to access the business in all types of traffic conditions, etc.
When looking at long term profit retailers should look at four key factors: “the economic conditions, competition, the strategic fit of the area’s population with the retailer’s target market, and the cost of operating stores”. Retailers want to look at areas with good economic conditions. They want to enter areas that are showing growth in population and employment, and that are showing constant growth in these areas. Retailers would not want to enter an area that already has competition, and no longer growing in employment and population for economic condition because the demand for their merchandise will already be covered by the competition. Unless, they are able to enter this area and offer their merchandise at a better quality or price to persuade customers to their business over the competition. Strategic fit, another key factor in determining long term profits, retailers want to ensure the location they are going to be entering fits their target market or market segments. You would not want to enter a location where the population is more college based age groups with a retail store selling home medical equipment. Retailer should also weigh the cost of the location. Some areas within the country and even within cities cost more depending on their locations. The financial piece of the business must be assed to ensure the business can afford the costs like rent or advertising before selecting a location.
It is always best to do research before making any business decisions. Without proper data and planning a business could flop due to not understanding the area they are going into. A good source of this data is the U.S. Census Bureau. The U.S. Census Bureau has population information, demographic information, income information, etc. Here retailers can view necessary information to help determine how successful their business can be and if they are choosing the correct location.
By retailers being strategic about their placement of retail locations they can ensure consumers are coming to them over the competition. If retailers lock in the best locations before the competition can they are able to capitalize on consumer traffic while also pushing the competition into the second best spot.
The area I live in is a college town area, Athens, Ga. All the business around this area cater to the college life style allowing them to capitalize on the college students who live there for most of the year if not the whole year. There are several coffee shops in the down town area, several clothing stores, etc. All that draw attention to the college market segment.
I do feel that the audit statements did fit each of the categories well, but feel that some of the statements like a deli or furniture store could fit multiple categories depending on if it was a higher end furniture store, and with the different types of food delis serve allows them to cater to other demographics.
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