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Location, location, location


25 Mar 2008

“Location, location, location” – chances are you have heard this term more than a few times. Its origin is in real estate: “The three most important considerations when buying or selling real estate are location, location and location.” It works the same in the retail game – when operating any retail establishment, the right location is paramount to the operator’s success.

But it isn’t only the location of the pharmacy itself that is important. Equally important location decisions are the arrangement of the fixtures and fittings within the shop and the range and location of products on the shelves. It’s a lot to consider, but failure to do so can result in less than spectacular sales, and worse – unhappy customers.

The physical location

Consumer preferences are not always easy to determine, especially regarding product choices. But when it comes to choice of retailer, their likes and dislikes are pretty transparent. Consumers make their shopping preferences known by patronising a retail establishment located in their home community or in close proximity to their work or school. Whilst the choices of where a pharmacy can be located are not limitless, a retailer does have options for how to maximise the store’s location.

For example, examine the area around the store. Do shoppers have easy and convenient entry from the carpark? Is the view of the windows and doors unobstructed? If you have a large and lovely display window but it is hidden under a dark awning, haven’t you squandered an important retailing advantage? If the store’s entryway is difficult to spot or inconvenient to reach, aren’t customers more likely to stay away? Accessibility to the store is the first – and one of the most important – decisions that shoppers make when selecting where they choose to spend money. Mounting competition and increased product choices mean that building and retaining customer loyalty is more difficult than before, but also more rewarding when accomplished.

Many longstanding establishments feel that their physical location is limiting their success. Yet rather than committing to improvements that may make the existing location more attractive to shoppers, they capitulate to the inevitable competitors who stand ready to encroach on their customer base and erode their sales and profits.

When considering opening a new store, relocating or improving an existing structure, do be certain not to overlook these factors:

  • Traffic counts – is the location situated in a well-travelled area? Will the shop have enough passers-by to attract a profitable shopper base?
  • Demographics – do the right kind of shoppers live in the area of the store? Do you know who the ‘right’ shoppers are?
  • Other business owners in the area – have you talked with them? They are likely to have experienced what you want (or do not want) and can tell you a lot about what to do and not do.

Fixtures and fittings

Excitement and interest are key components to the success of any retail display. The merchandise must be interesting and inviting to draw customers into your store. However, the store fixtures contribute as much to the presentation as the merchandise itself. Without proper fixtures that allow the most flexibility for arranging products in a pleasing manner, the store’s ultimate success is on the line. In other words, merchandising conveys information about the store and its owner. This information will compel shoppers to take action – either to linger and shop or to leave at once. What does your merchandising tell shoppers about you?

placement of the fixtures and traffic flow through the pharmacy are two essential building blocks to retail success. How products are presented for sale is as important as the physical location of the store. On one hand, expensive wares would look silly in cheap, shoddy or dirty store display fixtures. An appearance that turns people off the minute they walk into the store isn’t going to help sales and, in fact, it will probably hurt them. On the other hand, display choices should not completely overwhelm the merchandise. Dazzling displays that distract from the sales appeal of the merchandise won’t help business either.

If the physical location of the establishment cannot be altered, the next best area to address is fixtures and fittings. Here are four common goals of making an investment in new fittings:

  • Improvements to the overall store environment;
  • Improvements to the product and services mix;
  • Enhancements to consumer and/or employee behaviour;
  • Enticement to potential customers that the current shop does not attract.

Product assortment

Selection and location of each and every item on the shelf is the final step in helping consumers make a well-informed product decision. Selecting the correct range of products for a shop is as much art as it is science. The science is most often based on past sales data, projected sales of new items and consumer demand. The art comes from solid retail experience – and informed insight into how consumers shop a particular category.

Consumer decision trees can show the order of priorities shoppers use when choosing exactly which product to buy. For example, when it comes to selecting a specific pain relief item, do they first look for a specific brand? Or do they perhaps look for a certain form (e.g. capsule or liquid)? Is it possible they want a particular package size? You must know the relative importance of product attributes when planning shelf assortments and arrangements.

Here are the steps you must take to get the consumer shopping experience right:

  • Be sure you have the right category definition, based on a clear understanding of consumer needs.
  • Identify attributes a consumer might use in making a purchase decision in each category. This can include package type, brand, flavour, size, use occasion and so on.
  • Work with your key suppliers to rank these attributes in order of importance to the consumer.
  • Create a consumer decision tree that shows the ‘branches’ in their order of importance to the consumer.

Using an outside consultant to assist with this process or to validate internally-crafted decisions is a terrific approach. Some pharmaceutical wholesalers do offer customised programmes that address certain ‘space planning’, or category management, aspects of a pharmacy.  Utilising data derived from an epoS system is the most effective way to assess space allocation, product assortment and ranging, and overall sales trends. product on the shelf that is simply not selling or ‘paying for its space’ should be removed to make room for emerging products, stronger performers or to add variety to bestselling brands.

Getting it right at retail

Many factors go into creating a successful shopping experience for your customers. prime among them is addressing the three locations that impact shoppers’ choice of your shop as their preferred retail establishment, the traffic flow once inside the door, and the availability and selection of products that can best meet customer needs. Getting these three factors right at retail can make the difference between success and failure.

Dave Wendland is Vice president of The Hamacher Group Limited, located in Milton Keynes.


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