Academic journal article Journal of Emerging Trends in Economics and Management Sciences

The Role of Store Location in Influencing Customers' Store Choice

Academic journal article Journal of Emerging Trends in Economics and Management Sciences

The Role of Store Location in Influencing Customers' Store Choice

Article excerpt

Abstract

The study investigated the role of store location in influencing customers' store choice. Two outlets that belong to the same supermarket chain were studied. These outlets shared similar management and marketing strategies. A descriptive survey of customers and management was done through the use of questionnaires, interviews and observations as research instruments. It was noted that outlets with better parking space attracted high income earners, whilst proximity to other complimentary outlets increased pedestrian store traffic. Out of ten factors that may influence store choice, seven factors were considered by customers to be pertinent. Of the seven factors, four were store location features, namely travelling time, location convenience, proximity to complimentary outlets and store visibility. This study is very critical to retailing strategists and marketers since location require consideration prior to trading, any error in this regard will now be cast in concrete and it will be expensive to alleviate.

Keywords: all pay auctions, supply uncertainty, discriminatory auctions, experimental economics,

INTRODUCTION

With retailing picking up and consumers becoming choosy, it becomes vital for retailers to look out for new avenues and opportunities to boost sales revenues. Intense competition in the market has forced retailers to reconsider their strategies. Retail and service centres are often the final selling points in a physical distribution network. They include facilities like departmental stores, supermarkets, hypermarkets and many more. Location analysis for these points is highly sensitive to revenue and accessibility factors rather than cost factors.

The location of a retail store plays a very important role in its success; it is an integral and crucial part of the retail strategy as the location of the store conveys a lot about its image. It also influences the merchandising mix and layout of the store. Once setup, a retailer can change its merchandise mix, adjust prices, improve communication or services but it is very difficult to change the location. The research explored how location influence store choice in the retail sector.

LITERATURE REVIEW

Store Location Defined

Mendes and Themindo (2004) define store location as the physical space occupied by a shop, they further attribute that, it is the catchment area of a shop which experiences intense economic and commercial activities. Store location incorporates trade area analysis and retail site analysis. A trade area as defined by Levy, Weitz and Beitelspacher (2012) is a contiguous geographic area that accounts for the majority of a store's sales and customers. The trading area analysis usually provides the basis for delineating both the trading area of a new store and that of an existing store. This is usually done by evaluating the demographic characteristics of the area. Many retailers use the geographic information systems (GIS) software to determine their trading areas. On the other hand, retail site analysis is the next step in evaluating alternative specific store sites which can be an isolated store, unplanned business district and the planned business district coupled with site characteristics such as traffic flow, visibility and terms of occupancy just to name a few.

Importance of Store Location to a Retailer

The importance of store location to a retailer should not be underestimated. Why is store location such an important decision for a retailer? First, location is typically one of the most influential considerations in a customer's store choice decisions. For instance, a working couple can easily decide to shop at the shop nearest to their bus terminus on their way from work. Most consumers similarly shop at the supermarket closest to them.

Second, location decisions have strategic importance because they can be used to develop a sustainable competitive advantage. If a retailer has the best location, that is, the location that is most attractive to its customers, competitors are relegated to occupying the second-best location. …

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