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Chapter 6

Retail Locations

Lecturer: Dr. Nguyen Hang Giang Anh

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Learning Objectives

❖ Describe the types of retail locations available to

retailers
❖ Review the types of unplanned locations
❖ Analyze the characteristics of the different types of
shopping centers
❖ Discuss non-traditional retail locations
❖ Match the locations to the retailer’s strategy
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What is one of the Most Important Things in Retailing?

Location! Location! Location!

Eddie Tan/Life File/Getty Images

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Why is Store Location Important for a Retailer?

❖ Customer Accessibility: Location is the

main consideration in customer’s store
choice.

❖ Competitive Advantage: Location can

help to develop sustainable competitive
advantage – Competitors can not copy

❖ Investment Risks: Selecting a location

requires substantial investment
 Buying property or Long-term lease?
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Main content

1. Types of Retail Locations

▪ Unplanned locations
▪ Planned locations
▪ Nontraditional locations

2. Location and Retail Strategy

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1.
TYPE OF RETAIL
LOCATIONS
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Two basic types of Location

UNPLANNED LOCATIONS PLANNED LOCATIONS

• No centralized management; • Centralized management by a

retailers operate independently shopping center developer.

• Greater control over store • Enforced policies on store hours,

operations and hours. signage, and operations.

• Typically lower occupancy • Higher occupancy costs due to

costs, but variable management fees and common area
maintenance expenses. maintenance
• Diverse types of stores without • More cohesive shopping experience
a cohesive strategy. with complementary stores.

• Inconsistent shopping • Generally more organized and

environment for customer appealing due to shared amenities.
experience.
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Decision factors for selecting location

❖ Evaluating a series of trade-offs between

▪ Size of the trade area (potential customers)
▪ Occupancy cost (rent, maintenance, energy cost)
▪ Customer traffic (pedestrian and vehicle traffic)
▪ Restrictions placed on store operations
▪ Customer convenience
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Unplanned Locations

❖ Freestanding Sites

❖ Urban Locations
▪ Central Business District (CBD)

▪ Inner City

▪ Gentrified Residential Areas (GRA)

❖ Main Street
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Freestanding Sites (1/2)
Individual, isolated store unconnected to other retailers
but may be near them.
❖ Advantages:
▪ Convenient access and parking
▪ High visibility from traffic
▪ Modest occupancy costs
▪ Few restrictions on operations
❖ Disadvantages:
▪ Little pedestrian traffic
▪ higher occupancy costs than shopping centers
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Freestanding Sites (2/2)

❖ Trends: Retailers like drugstore, fast-food chains, are

moving to freestanding sites for better accessibility and
services like drive-through windows.
❖ Example:
 Fast-Food Chains: McDonald, KFC
 Coffee Shops: Highland Coffee, Starbucks
 Convenience Stores: Circle K, Mini-marts
 Electronics stores: FPT, thegioididong
 Drugstore Chains: Long Chau, Pharmacy
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Urban Locations – CBD (1/2)
Urban consumers place more importance on reducing their
shopping time rather than finding a broad and deep assortment
 convenience-focused merchandise
❖Advantages
▪ Draws many customers into areas during business hours
▪ Enhances brand image due to the location.
▪ Well-connected by public transport.
❖Disadvantages
▪ Parking is poor
▪ Elevated rental and operational expenses.
▪ Vehicular traffic is limited due to congestion in cities
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Urban Locations – CBD (2/2)
In Vietnam, CBD is characterized by a concentration of
commercial activities, office buildings, retail shops, and services
❖ District 1 is the heart of HCMC's CBD
 Bitexco Financial Tower: An iconic skyscraper housing offices,
restaurants
 Saigon Centre: A large shopping mall with a mix of international and
local brands, located near the Ben Thanh Market.
❖ Hoan Kiem District serves as Hanoi's CBD
 Hoan Kiem Lake: A central landmark surrounded by shops, cafes,
and cultural attractions.
 Trang Tien Plaza: A high-end shopping mall featuring luxury brands,
positioned near the famous Opera House.
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Urban Locations - Inner City (1/2)

Low-income residential area within a large city

❖ Advantages
▪ Rich cultural history and vibrant communities.
▪ More affordable rental costs for businesses.
▪ Strong ties to local customers foster loyalty.
❖ Disadvantages
▪ Issues like crime and inadequate infrastructure.
▪ Access to essential services may be lacking.
▪ Lower spending power among residents.in cities
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Urban Locations - Inner City (2/2)
In Vietnam, inner city areas refer to parts of major cities that may
have experienced urban decay but are also undergoing revitalization.
❖ Districts 4 and 5 are notable inner-city areas
 Urban Decay: Features older buildings and infrastructure, facing
economic challenges.
 Cultural Diversity: Cholon (Chinatown) highlights a rich cultural
heritage with shops, temples, and traditional markets.
 Revitalization Efforts: Ongoing projects aim to improve
infrastructure, public spaces, and attract businesses.
❖ The Old Quarter is a significant inner-city area
 Historic Charm: Known for narrow streets and historic architecture,
drawing locals and tourists.
 Gentrification: New investments in hospitality and retail aim to
enhance tourism while preserving historical elements.
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Urban Locations – GRA (1/2)

Gentrification the renewal and rebuilding of offices,

housing and retailers in deteriorating areas.
❖ Advantages
▪ Improved infrastructure and services attract new residents
and businesses
▪ New businesses enrich the local scene with variety.
▪ Strong ties to local customers foster loyalty.
❖ Disadvantages
▪ Long-term residents may be forced out due to rising costs
▪ Unique neighborhood identities may diminish.
▪ Gentrification can deepen economic divides. 4-16
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Urban Locations – GRA (2/2)
In Vietnam, Gentrified areas are characterized by revitalization
and an influx of new residents and businesses, leading to changes
in the local demographic and economy.
❖ Thu Duc City is a GRA in HCMC
 The area has seen significant investments in infrastructure,
including new roads, parks, and public facilities, aimed at
improving living conditions and attracting residents.
 Gentrification process, blending modernization with its existing
urban fabric, and reflecting broader trends in urbanization.
❖ Tay Ho (West Lake) is a GRA in Ha Noi
 Popular with affluent locals and expats, this area features
upscale restaurants, cafes, and new residential developments.
The lakeside setting adds to its appeal.

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Main Street Locations

Traditional downtown shopping area in small towns and

secondary shopping areas in large cities.

❖ Share characteristics of locations in GRA, but

occupancy costs are lower.

❖ Example: Nguyen Hue walking street - HCMC

▪ A vibrant pedestrian-friendly area in the heart of the city,
known for its shops, cafes, and cultural events.

▪ It attracts both locals and tourists and is part of ongoing

urban revitalization efforts.
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Planned Locations

❖ Shopping centers are planned and managed

collections of retail stores designed to attract
consumers by offering a variety of stores in one location.
❖ Developers select complementary retailers to
enhance the shopping experience and use lease
agreements including shared maintenance costs and
operational restrictions.
❖ Shopping centers rely on one or two major retailers,
referred to as anchors ( Macy’s, Walmart, or Kroger) to
attract significant number of consumers.
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Types of Planned Locations

❖ Convenience, Neighborhood, and Community

Centers
❖ Power Centers
❖ Malls
❖ Lifestyle Centers
❖ Outlet Centers
❖ Theme/Festival Centers
❖ Mixed-Use Developments (MXDs)
❖ Larger, Multiformat Developments (Omni centers)
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Convenience, Neighborhood, and Community Centers

Typically include small retailers and are often

anchored by a supermarket

❖ Advantages: Lower occupancy costs.

❖ Disadvantages: Minimal smaller specialty stores.

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Power Centers

Primarily consist of big-box retailers (e.g., Lotte

Mart, AEON, Big C)

❖ Advantages: Convenient locations and lower

occupancy costs.
❖ Disadvantages: Limited trade area and lack of
entertainment options.

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Malls

Enclosed shopping areas with a large number of

stores

❖ Advantages: Attract a wide range of consumers and

provide a sheltered shopping environment.

❖ Disadvantages: Higher occupancy costs and

competition among similar retailers.

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Lifestyle Centers

Open-air centers that feature specialty stores,

restaurants, and entertainment

❖ Advantages: Attractive outdoor environment and

lower costs than malls.

❖ Disadvantages: Less retail space, which can limit

customer traffic.

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Outlet Centers

Focus on discount stores for manufacturers’ and

retailers’ products.

❖ Advantages: Offer lower prices and often include

entertainment facilities.

❖ Disadvantages: Typically located in remote areas,

reducing accessibility.

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Theme/Festival Centers

Designed around a specific theme with unique

architecture and merchandise

❖ Advantages: Draw tourists and locals alike.

❖ Disadvantages: May be viewed as tourist traps over

time.

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Mixed-Use Developments (MXDs)

❖ Combine several different uses

into one complex, including
residential, commercial, and
recreational spaces.
❖ Advantages: pedestrian-oriented
 facilitate a live-work-play
environment
▪ MXDs are popular with retailers 
because they bring additional
shoppers to their stores.

❖ Disadvantages: Complexity in
management and higher initial
investment.
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Larger, Multiformat Developments

❖ Combines elements of malls, lifestyle centers, and power

centers.
❖ Referred to as omnicenters  has no official name.
❖ Advantages: Meet diverse shopping needs in one location.
Attract time-scarce consumers.
❖ Disadvantages: May require substantial investment and
careful planning.

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Non-Traditional Locations

❖ Pop-up stores and Other temporary locations

❖ Stores-within-a-store
❖ Merchandise Kiosks

Homework: Differtiate the three types

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2.
LOCATION AND
RETAIL STRATEGY
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Matching Location to Retail Strategy

❖ Selection of a location type  reinforce the retailer’s

strategy
❖ The choice of retail location  align with consumer
shopping behavior.
❖ By understanding the differences between types of
shopping behavior  retailers can choose locations
that enhance their strategies and meet consumer
needs effectively.
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Three types of Shopping Behavior
❖ Convenience shopping: Retailers like gas stations
and convenience stores focus on accessibility, locating
near high-traffic areas to minimize effort for quick
purchases.
❖ Comparison shopping: Retailers such as furniture
stores and department stores cluster together in
shopping rows or malls, allowing customers to easily
compare options.
❖ Specialty shopping: Unique retailers, like luxury
brands, often set up in upscale locations, attracting
dedicated customers willing to travel for specific
products.
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Factors Influencing Location Decisions

❖ Shopping behavior: Understanding consumer

preferences helps determine location type.
❖ Density of target market: Locations should have a
sufficient population of the target market;
❖ Uniqueness of offerings: Retailers with distinctive
products can afford less convenient locations, as
their unique offerings attract dedicated
customers.