Suggest that you are the owner of Smith Haven Mall, here is the map of the curre

Question

Suggest that you are the owner of Smith Haven Mall, here is the map of the current Smith Haven Mall. http://www.simon.com/mall/smith-haven-mall/map Please use the theory of retail agglomeration to answer the question. You can choose at least one department, for example, body care stores such as Lush, Bath and Body works, etc., to claim whether or not the locations of those stores make sense to you. If yes, why, if no, why not and can you give a better arrangement? There is no standard answer for this problem. However, if you could really convince yourself that the answer can give the businessmen a better deal, you would like to try to submit this report to the company.

Explanation / Answer

Retail shopping behavior in the United States has changed dramatically over the past century. Prior to the industrial revolution retail purchases were most often made at the shopping center closest to an individual's residence (i.e., the general store).Travel to more distant shopping centers for a lower price or

better selection was prohibitive due to transportation costs. With the popularization of the automobile in the mid-l920s, however, travel costs were reduced and the consumer became more mobile. With the greater use of

the automobile and the use of mass transit systems, central cities became the focal point of many retail purchases, in particular purchases of high-order goods

Retail Location and the Theory of Agglomeration

Due to consumer propensities for comparison shopping and multiple purpose trips, agglomeration economies are realized for retail stores to the point where many types of retail activities cannot survive except in an extremely clustered pattern. The following paragraphs will examine some of the relationships between specific elements of agglomeration theory and the results of this study. The typical cross sectional rent function (Figure 6.1) proposed by Isard, which plots rent against distance from the city center, appeared to be validated by the standardized difference matrices, though the pattern of subordinate peaks seemed to The typical cross sectional rent function (Figure 6.1) proposed by Isard, which plots rent against distance from the city center, appeared to be validated by the standardized difference matrices, though the pattern of subordinate peaks seemed vary with directional orientation; that is, one cross sectional curve may well not represent adequately the rent tendencies in an entire city, useful though it may be as an abstract.

It is important to emphasize at this point the role of time in the deve10pment of agg1omerations. On the one hand, the character of a retai1 cluster changes as each new store is added. More precise1y, the agg1omeration economies that are availab1e for each store type, and the probability that a store of each type will enter the c1uster, change. Thus the direction of deve10pment of a retai1 c1uster and the spatial patterns that resu1t are heavi1y dependent on a temporal sequence of events. On the other hand, changes which occur in the 1arger urban environment affect agglomeration economies and locationa1 probabilities in given retail clusters. Population and income shifts and technological and cultural evo1ution are examp1es of such change. The role of time in retai1 location, especia11y at the sma11 scale of the individua1 c1uster, has received only superficia1 attention in this thesis and has se1dom been dea1t within the existing 1iterature

As a store selling low-value goods deviates farther and farther from a central location, the probability of a consumer's patronizing the store drops off sharply, because the utility of the good can no longer compensate for the travel disutility he must incur. Thus it becomes '-! 118 less probable that the entrepreneur can pay the rent at the more distant location, even though it is lower than the rent at the central location. On the other hand, a store selling high-value goods can move a considerable distance away from the optimal location and still attract customers by virtue of the large utility its good can offer. Therefore a theoretical curve of probability of consumer deviation against distance can be drawn, similar to the curve of rent against distance, and by the above arguments the former- curve should fall off faster than the latter

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