Describe the Considerations for Choosing a Retail Site

Question

Examlex · Accepted Answer

The Answer is With a retail business, an entrepreneur is dealing directly with the consumer; and if the entrepreneur intends to have a physical, offline location, one of the first considerations is locating near consumers who have disposable income. Because a retail business is unlikely to survive if not enough consumers have easy access to the business, it is imperative to locate where there are suitable concentrations of consumers. Understanding a trade area is one way to calculate the potential demand from consumers. The trade area is the region from which you expect to draw customers. The type of business will largely determine the size of the trade area. Once the trade area is established, the competition can also be identified. One way to do this is to drive or walk through the area (assuming it is not too large) and identify competing businesses. Their approximate size and number should be noted. The entrepreneur should gauge how busy each competitor appears to be at various times of the day by observing their parking lots or actually entering the business. If competitors are located in shopping malls or strip/convenience centers, the entrepreneur should look for clusters of stores that are similar to his or her business and that have low vacancy rates. Often, locating near a competitor is a wise choice because it encourages comparison shopping. The character of the area should also be observed. The character of the area will have an important impact on the business.

Describe the Considerations for Choosing a Retail Site

Definitions: