A Model For Predicting Suitable Location For Retail Business In The County Of Nairobi

Abstract

Discussion on retail business location reads like a well-trodden path, but disruption in the sector brought about by passage of time and technology means that it would be an expensive and time-consuming affair to err in retail business location. Selection of a retail business‟s location thus cannot be underscored. Dynamics of rising cost of doing business and the need to tap into a new or existing market by a retail business seeking to expand, needs to be treaded on with caution and proper research analysis is paramount. Until recently, many malls and large business infrastructure premises keep coming up and a right selection should be taken to ensure a good return on investment (ROI), as the retailing store will be locked to that location for a long period. This thesis was based on retail stores as a case. A sample of stores throughout Nairobi was subjected to in-depth analysis using variables such as regions population size and type, available infrastructure, foot traffic, and demographics using available data from the various retail stores in the County of Nairobi, and the Kenya National Bureau of Statistics (KNBS) seeking to establish patterns that justify or otherwise their current physical locations to guide future store location selection with the assistance of the Geographic Information System (GIS). The data was subjected to statistical analytical processes and visualization through regression techniques. The design methodology adopted in this study was design science in an attempt to explain the factors that lead retail business to choose specific localities when setting up shop. The use of raster data and spatial images from the geographical information system brought out a clear picture of the different appropriate locations of setting up retail business with the result being ascertained through a data mining process of the transaction data and other variables key to the development of the model. This data has been consistently captured over a defined period, thus testing the applicability of the model to be developed for determining the most appropriate location for retail business. Findings of this study would undoubtabley assist in making sound retail business location decisions. It will illustrate the role that statistical analysis, data mining, and GIS plays in determining not only a retailer‟s location but any business seeking to set up.