Perkuliahan Asinkronus: Strategi Pemilihan Lokasi pada Bisnis Ritel

Summary

This lecture focuses on the strategic decision-making process in choosing retail business locations. Retailers face two primary choices: selecting new locations with minimal competition or opening near competitors. The lecture covers key factors affecting location decisions such as economic scale, demographics, lifestyle, business climate, and competition. It also explores three types of trading areas—primary, secondary, and fringe—along with macro and micro attraction factors. Additionally, the impact of high vs. low competition areas is discussed, emphasizing the trade-offs of customer access, promotion costs, and market monopolization. The content is designed for students to apply these insights to real-world retail location strategies.

Takeaways

• 😀 Retail location selection is a strategic decision that should not be made haphazardly. Retailers must evaluate various factors before choosing a location.
• 😀 There are two primary choices when selecting a retail location: opening a new store with minimal competition or opening near competitors to benefit from shared traffic.
• 😀 Retail areas are categorized into three zones: Primary Trading Area (closest to the store), Secondary Trading Area (further but still reachable), and Fringe Trading Area (the furthest and hardest to reach).
• 😀 Retailers can attract customers in the Fringe Trading Area through demonstrations or showcases, aiming to increase customer interest and sales.
• 😀 Demand for a retail location is influenced by five factors: economies of scale, demographics, lifestyle, business climate, and competition.
• 😀 Economies of scale benefit retailers with multiple branches in the same area by covering underperforming stores with better-performing ones.
• 😀 Demographics and lifestyle play a crucial role in location strategy. Retailers need to align their offerings with the target area's age, gender, education, income, and occupation profiles.
• 😀 Business climate refers to external factors like government regulations, partnerships, and market conditions that can impact retail location choices.
• 😀 Competition can be direct (similar businesses) or indirect (different types of businesses), and it affects how retailers position themselves in a market.
• 😀 The attractiveness of a location can be assessed through macro factors (e.g., geographical barriers) and micro factors (e.g., visibility, traffic flow, and parking availability).
• 😀 High competition areas generate more foot traffic and can lead to stronger associations between businesses, but they often result in price wars and higher rental costs.
• 😀 Low competition areas offer monopoly opportunities for retailers, but they require greater investment in promotions and customer education to build awareness and sales.

Q & A

What is the significance of location selection in retail business?

Location selection in retail business is a strategic decision that directly impacts the success of the business. A retailer must carefully consider the location to either develop a new business or expand in a competitive area. The choice between a location with no competitors or one near competitors requires thorough evaluation of business conditions and the retail entity itself.

What are the three types of trading areas in retail?

The three types of trading areas in retail are Primary Trading Area, Secondary Trading Area, and Fringe Trading Area. The Primary Trading Area is where the store has the closest proximity to customers. The Secondary Trading Area is a bit farther but still accessible, and the Fringe Trading Area is the farthest, often requiring efforts like demonstrations to engage potential customers.

What factors influence the demand for a trading area?

Five main factors influence the demand for a trading area: economy of scale, demographics, lifestyle, business climate, and competition. These factors impact store performance and customer reach, with considerations such as regional demographics, the style of living, and the level of business competition being crucial in deciding on the right trading area.

How does economy of scale affect retail location selection?

Economy of scale affects retail location selection by enabling retailers to open multiple branches in the same area. This allows the performance of underperforming stores to be covered by other branches, as seen in the example of Home Depot in the USA, which successfully utilized this strategy to manage store performance.

What role do demographics play in selecting a retail location?

Demographics play a critical role in selecting a retail location as they define the target customer group based on factors such as age, gender, education, and lifestyle. The retailer must adjust product offerings, store layout, and pricing according to the preferences and behaviors of the local population, which vary between rural and urban areas.

What are macro and micro factors that attract a retail location?

Macro factors that attract a retail location include natural barriers (e.g., mountains) and man-made barriers (e.g., railway tracks), while micro factors include visibility distance and the availability of parking. Both types of factors affect a customer's ability to access and shop at the retail store.

How does traffic flow impact retail location selection?

Traffic flow significantly impacts retail location selection as stores located along busy streets with high foot or vehicle traffic are more likely to attract customers. A location along a popular route or near public spaces can increase the store's visibility and customer flow.

What are the advantages and disadvantages of high competition in retail locations?

High competition in retail locations can lead to increased customer traffic, as well as collaboration between retailers, such as sharing supplies. However, it also leads to intense price wars, which can affect profit margins, and requires continuous innovation to stay competitive. Moreover, high competition often leads to higher rental costs.

What is the benefit of having low competition in a retail location?

Low competition in a retail location allows for a monopoly over the market, making it easier for a retailer to dominate local commerce. However, the retailer may need to invest heavily in promotion to raise awareness, and may also experience slower information exchange and lack of collaboration with other businesses.

What is the role of parking in retail location selection?

Parking is crucial in retail location selection, as adequate and accessible parking can increase a store's attractiveness. If a store offers sufficient parking space, it becomes easier for customers to visit, improving the overall customer experience and potentially boosting sales.