Jonathan Reynolds

By Jonathan Reynolds

Retail location: art or science?

In 1974, Dr David Thorpe, then based at the Manchester Business School before his move to become Head of Research at the John Lewis Partnership, wrote about the central importance of what he called the ‘external’ areas from which retail firms might be expected to benefit in undertaking research, which included site selection. He remarked:

“For many retailers, research is something they undertake because they have a vague feeling they ought to do so, rather than because they anticipate any concrete benefits.” (Thorpe, 1974, p 21)

Where are we now? A full thirty-six years after David Thorpe’s comments, we’ve been collaborating with Steve Wood at the University of Surrey to look at the current state of store location analysis within UK retail firms. The whole project, funded by the Nuffield Foundation, looks at three main themes:

  1. To what extent are store forecasting and site assessment techniques used across UK retailing?
  2. How is knowledge and experience used within the forecast process itself?
  3. To what extent are store location analysts’ knowledge and experience used elsewhere within the business?

For the study, we surveyed over 102 businesses, of whom over 40% responded, and interviewed 30 analysts and consultants.

So what does this research tell us? Certainly, that retail site research – for all its increased reliance on technology and forecasting systems – is still more than just pressing buttons. The site visit continues to be seen as a critical contributor to forecast accuracy. Indeed, location planning now relies upon a judicious mixture of codified and tacit- or experience-based knowledge; a balance which is tough to achieve in practice. However, because many teams are small, there is a significant pressure to perform which often results in a lack of time to achieve the required in depth analysis. In some cases, teams are so small that there must be concern not just about capability but also about business continuity:

“I am a ‘one man band’, so all knowledge & experience resides with one person” (Location analyst)

Whatever the size of the team, it represents a sunk cost for the business which it would be foolish to neglect. This places an emphasis not just on excellent analyst mentoring and training (when to adjust models; how to accommodate the role of experience) and discussion and dissemination within analyst teams concerning new knowledge and findings, but also to establish and maintain the legitimacy of location planning within the organization more broadly.

“Location Planning is…can be seen as a sort of back-room, boffin type thing that doesn’t really understand the real world of retail and isn’t out there on the coalface, so it can have pejorative associations because …it appears to be a long way from the customer and the product, whilst, in actual fact, in reality, Location Planning should be the closest thing to the customer and understanding product performance”. (Location planning consultant)

But it is nevertheless encouraging that some specialist location planning teams are now more of an established feature of modern retailing, just in the way that David Thorpe and other early proponents had anticipated.

We’re trying out some new forms of presenting material online. So you can look at a dynamic presentation of the main findings in the embedded Prezi presentation below, or a more conventional SlideShare presentation.

OXIRM runs a 3-day Retail Location Analysis workshop in Oxford in April each year. For details of the 2011 programme, click here.

UK Retail Location Planning

View more presentations from Jonathan Reynolds.
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