Question

Topic: Strategy

How To Decide If A Particular Shopping Mall Is The Best Option Available For Locating An Outlet?

Posted by Anonymous on 8/17/2004 at 1:50 PM ET 250 Points
We have been assigned a project to advise a client on whether a particular shopping mall is good as a location for their outlet. This shopping mall will be the biggest mall in the world and is slated to open in 2006. This shopping mall will have an entertainment zone, lots of outlets across brand categories, anchor stores like hypermarkets, multiplex theatres etc. In the first year itself, the mall management expects more than 35 million visitors. Moreover the mall is being backed by the Government too! Is there any case studies we can look into? Can someone pls. help and guide me? The outlet belongs to a well known Group and will sell TVs/ mobile phones/ music systems etc.
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  • Posted by Mushfique Manzoor on 8/18/2004 at 4:36 AM Accepted
    Hi ajay

    Since consumers dont buy electronics goods impulsively, except for oil sheikhs ;). so i think you can have a look into the following

    - the traffic profile. surely your client has different customer groups for his portfolio of products(TV, Mobile set, Music System etc). In case of electronics any one customer group (for Mobile Set) inevitably overlaps, to some extent, other customer group of another product (i.e. Music/Home Theatre System). So look closely at the traffic profile, and how many customer groups are being covered by the traffic of 35 million people. From what you have said seems that most of your customers groups will be covered by traffic.
    - The location of the shopping mall. being the biggest in the world it will definitely be in the people's mind for some time (i.e. 1 year). What will happen after that? will the traffic fall down? or go up?
    - Also the Location of your shop within that mall (largest in the world). If the shop is visible to outsiders of the mall (like passersby, drive-by people) then your traffic to shop will increase as people will recall when they decide to buy any electronics item.
    - if the shop is located in deep-inside the mall (negotiating long alley) then the traffic to shop drops. A prominent pseudo-alone showroom look, preferrebly in Ground or 1st Floor increases the visibilty of the shop. higher floor location impedes visibility from outside (both from car/walking)
    - as more traffic comes to your shop the probability of successful sales increases(considering the non-impulse-buying nature of your products).
    - If the traffic is expected to fall down, which segment of consumers?? since electronics (even mobile sets) are not impulse buying items, monitor the traffic for movement in your groups. if goes up, thats good news!

    Once you have done these then get into cost benefit analysis as said by JBtron. You gotta calculate your expected revenue (successful sales converted from expected traffic) and your cost of acquiring the shop space, overhead costs. I agree with JBTron of being conservative regarding sales volume and value. If the net numbers are positive for the initial years and after plummeting-traffic years(worst scenario), then you go for it.

    Hope this helps. If you provide more info and if anything new comes up, will get back .

    cheers!
    Mushfique
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