Location, Location, Location

There is a science to “Location, Location, Location.” And it is based on three concentric circles from far to near the point of purchase.

Firstly and most obviously you look at the geographical location or catchment area. In examining catchment areas you are looking at catchment area profile (demographics / psychographics), topography and ease of access within the catchment area for shoppers (both resident and visitors) and the competitive environment including existing shopping patterns. In this first “Location Circle” you examine your format variations for fit – hub and spoke, convenience or express, big box, kiosk etc. You are also examining how you can use your sign-posts to maximum effect to get on the map and attract custom.

In the second “Location Circle” you look at the precinct and the company you’ll be keeping. Where in this precinct will be best for the store format you have selected. What sight lines do you require. Who do you want to be located near. What type of traffic flows can you expect. What configuration and functional requirements will make it work for you.

Finally, in the third “Location Circle” you look at the store and how you break up the locational opportunities or real estate within the store to produce the highest productivity. It is often this third “Location Circle” that many retailers under-play and what separates good retailers from great retailers.

Unlike the front loaded activity and cost commitment of the first two “Location Circles”, the locations within the store are not set and forget. They provide tactical and strategic opportunity to highlight promotional merchandise; to demonstrate price/value architecture; to communicate sales enhancing stories; to range tune; to create adjacencies and traffic flows that create better sell through and promote increased basket value and shopping frequency.

As in the first circle, the best real estate is valued the highest and must generate the highest productivity – judged not only on line or category return but by it’s overall impact on sales and profit at a store level and at a customer level.

It often surprises smaller retailers how much effort and time larger retailers put into intra-store location strategy. They constantly tinker with adjacencies, range width, promotion and cross-promotion locations and impulse and basket filling locations.

They are also very clear on the value they place on location at every level and conscious that for each of the three “Location Circles” there is a productivity measure rather than a cost measure that really drives the success of the business.

Location. Location. Location.