UNIT C

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UNIT C THE BUSINESS OF FASHION
3.03 Identify the types of fashion retailers.
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Main types of retailers Retailers can be
classified into 1 of 2 categories, based on the
merchandise the store carries.

1. General merchandisers
2. Specialized merchandisers

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General merchandisers

• Carry market many types of goods in several
  price ranges
• May be a rural general store or a huge mass
  merchandiser

Sears Product Mix Appliances Fashion Tools Automo
tive Tires Beauty Health Baby Books
Jewelry Fitness Sports Lawn Garden Outdoor
Living
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Specialized merchandisers

• Narrower lines of related merchandise
• Target a more distinct group of customers
• Market certain categories of goods to particular
  age groups, sizes, and consumer tastes and
  preferences
• Examples Victorias Secret, Footlocker, Lane
  Bryant

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Even though retailers can be categorized as
either general or specialized merchandisers, they
can be further classified by specific types
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Department store retailing

• Large-scale mass merchandisers
• Usually carry a wide range of sizes
• Carry household goods
• Departmentalized by category/sizes of goods
  being sold
• Each department may have separate salespeople and
  payment areas.
• Generally known for high quality, fashion, and
  customer service
• Usually offer credit and return or exchange
  privileges
• Examples

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Department store retailing (cont.)

• Offer numerous customer services such as gift
  wrap, layaway, and restaurant(s)
• Sell to many income levels, but generally target
  middle to upper income customers
• High operating expenses due to number of
  employees and customer services
• Advertise heavily
• Large buying and sales volume

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Types of department stores

1. Branch stores
2. Flagship stores
3. Junior department stores
4. Chain stores

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Branch stores

• Small retail stores owned and operated by a
  parent store.

• May be located in suburbs or other urban areas
• Receive merchandise and operation instructions
  from the original store (or flagship store)

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Flagship stores

• Parent or main stores originally located in a
  central business district (New York City is the
  home office for all the Macys branch stores
  throughout the country).

• Responsible for merchandising and promotion for
  entire operation
• Can make merchandise available to branch stores
  on short notice
• Some flagship stores have closed and moved
  administrative offices to other locations.

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Junior department stores
Small department stores with limited assortments
of apparel, housewares, gifts, and household
textiles.

• Moderately priced merchandise
• Small, locally owned
• Low sales volume makes it difficult for these
  stores to compete.

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Chain stores
A group of stores (usually 12 or more) owned,
managed, merchandised, and controlled by a
central office.

• All stores carry similar goods at similar prices.
• Prices in chain stores are often lower than
  department stores.
• Private label merchandise (Example Kenmore for
  Sears)
• Decisions made at central headquarters
• Merchandise can be produced to the chains
  specifications
• Chains can be general or specialized
• May serve as anchor stores
• Anchor stores The attractions that draw
  customers to shopping centers and malls.

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Discount store retailing
Discount stores Mass merchandisers that sell at
lower-than-average prices.

• Located in large, no-frills facilities in high
  traffic areas
• Offer minimal customer services
• Merchandise is paid for at checkout counters
  located near store exits.

• High sales volume, shown strongest growth in
  market share
• Fashion followers
• Many retailers are making an effort to offer more
  current fashions.
• Most discounters are chains.

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Discount store retailing (cont.)

• Extended operating hours
• Many imports from low-wage countries
• Appeal to customers with modest clothing budgets

• Other Types of Discount Stores
• Off-price discounters
• Factory outlets

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Off-price discounters
Retailers that sell brand name or designer
merchandise at lower-than-normal prices.

• High fashion goods at moderate prices
• Changing and unstable collection of merchandise
• Buy merchandise at below-wholesale prices
• Labels may be cut out to protect merchandise sold
  in upscale shops

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Off-price discounters (cont.)

• Do not place advance orders
• Make low-cost special purchases during the season
  when other stores are planning for the next
  season
• Stock consists of production overruns,
  end-of-season goods, closeouts, and irregulars.

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Factory outlets

• Discount stores that are manufacturer owned and
  operated

• Sell only merchandise produced by the company
• Products sold include overruns, canceled orders,
  and discontinued items.
• May be located in factory malls

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Wholesale Warehouse Clubs

• Specialize in bulk sales of a limited selection
  of nationally branded staple merchandise
• Offer almost no services, no shopping bags, no
  home delivery, limited payment options
• Most charge an annual membership fee
• Merchandise is bought with volume discount and
  stacked high in packing cartons
• Almost no advertising or promotion is done

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Hypermarkets

• Huge supercenters
• Function as a combination grocery and discount
  store
• Target time-stressed consumers who want to do all
  of their shopping in 1 place
• The concept, which started in Europe, also
  features a very high volume of sales at low prices

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Specialty store retailing
Specialty stores Retailers that sell limited
classifications of merchandise. Ex maternity
shops, shoe stores, bridal boutiques, childrens
apparel, accessory shops

• Many specialty stores are now franchise stores or
  national chains with well-known retail names.
• Boutiques

• Low sales volume
• High prices
• Offer unusual merchandise, more personalized
  service, convenience, and ambience
• Known for a certain level of design or quality of
  merchandise

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Franchise stores
Retail establishments in which a firm or an
individual buys the right to use a famous or
established name or trademark in a specified
trading area.
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Franchise stores (cont.)

• Often located in exclusive shopping areas of
  major cities or boutique areas within large
  department stores
• The designer or manufacturer does not have direct
  ownership of the franchise and does not help run
  the business. They only supply goods to the
  retailer.

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Boutiques
Small, stand-alone shops or areas within larger
stores that sell unusual, limited quantity
apparel, accessories, or decorative items.
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Boutiques (cont.)

• High level of customer service
• Fashion-forward merchandise
• Target special-interest customers
• Unique images
• New, artistic, and handmade items

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Nonstore retailing

• Selling without a conventional store facility.

• Mail-order retailing
• Telecommunication retailing
• In-home selling

Nonstore retailing developed for the convenience
of the consumer.
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Mail-order retailing
Selling merchandise through catalogs distributed
to customers.

• Customers select items by looking at pictures and
  reading product descriptions.
• An alternative for customers who prefer to shop
  from the comfort of their home or cannot go out
  to shop
• Orders are placed by mail, toll-free calls,
  computer.

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Mail-order retailing (cont.)

• Merchandise is usually paid for by credit card
  and shipped directly to consumer.
• Extended order-taking hours
• May offer a full line of items or specialize in a
  single line of merchandise
• Many retail department stores and chains offer
  catalog shopping.
• Many mail-order houses also have retail stores.
• Customers usually pay high shipping and handling
  fees.

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Telecommunication retailing
Selling merchandise using communication devices.

1. Television retailing
2. Computer (Internet) retailing

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Television retailing

• Television channels are used to show and describe
  merchandise.
• Many celebrities sell signature lines of
  merchandise.
• Consumers can control what they view.
• Orders are placed by telephone or online at the
  company website.
• Used to introduce and test the market for new
  products
• Reaches a national audience

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Computer (Internet) retailing

• Electronic retailing or e-tailing
• Combines computer and telephone technologies with
  marketing and merchandising
• Shoppers view merchandise on computer monitors
  and order through a modem connection.
• Allows customers to view electronic catalogs
• Allows for comparison shopping

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In-home selling

• Selling outside of a retail store
• Used to sell cosmetics, jewelry, clothing lines,
  and other merchandise through selling parties or
  door-to-door sales
• Merchandise is often high quality and unusual in
  design.
• Prices may be high.