Ideal Store Locations for Indian Retailers – An Empirical Study

Abstract

Majority of brick-and-mortar retailers in India assume that; (a) stores in locations where there is higher consumer walk-ins/traffic generate higher revenue and profit, (b) consumers spend is higher in premium locations, (c) it is easier to attract consumers if the store is located in malls, (d) stores in premium locations helps in building premium perceptions about the retail brand in consumers and competitors mind, (e) it is difficult to attract and acquire consumers for high street stores, (f) institutional stores are not long-term and most importantly, (g) magnitude of revenue that would be generated by a store is important while considering a location. Such assumptions and misconceptions have resulted in increasing challenges with respect to maintaining consistent growth and sustainable store profits. Brick-and-mortar retailers need to understand the importance of store location in relation to retailer’s overall brand image, target consumer group and its implications on the overall store profitability and consumer perceptions rather applying standard thumb rules, assumptions and misconceptions followed by competitors or even short-term lucrative deals offered by site owners/managers. In this research, we have analysed twelve months actual sales data across high street stores, mall stores and institutional stores of a select retailer and drawn insights to recommend brick-and-mortar retailers the right strategy of store locations choice and store locations mix to gain long-term strategic and competitive advantage.