Channel participants: Retailers

1
Channel participantsRetailers

• Module 2b
• Chapter 3

2
Module Overview what to know

• What is retailing?
• Retailing functions
• History of retailing
• Retail classifications
• Retailing in Australia
• Trends in retailing
• Retail marketing decisions
• Selecting a retailing site

3
Module objectives

• Understand the nature of retailing
• The role it plays in giving consumers access to
  products
  
• How retailers are classified and
• Clearly determine what a retailer is and
  understand the main functions of retailers
  
• Understand the marketing decisions that need to
  be made by retailers
  
• Cover some important trends in retailing

4
What is retailing?

• business firms engaged primarily in selling
  merchandise for personal or household consumption
  and rendering services incidental to the sale of
  goods (Rosenbloom 1999, p. 55).

5
Which of these are retailers?

• Hairdresser
• Banks
• Cafés
• Travel agent
• Taxi
• Watch seller
• Watch repairer

• Supermarkets
• Clothing specialist
• Department stores
• Electric goods stores
• Electricians
• Electricity provider
• Bakery

business firms engaged primarily in selling
merchandise for personal or household consumption
and rendering services incidental to the sale of
goods (Rosenbloom 1999, p. 55). ..hmmmmmm!
6
Some other definitions

• ABS
• Berman (1996) and Cox Brittain (2002)
• involved in the sale of goods and services to
  consumers for personal, family or household use
  
• Dunne, Lusche Griffith (2002)
• consists of the final activity and steps needed
  to place a product in the hands of the consumer
  or to provide services to the consumer
  

7
Now, which of these are retailers?

• Supermarkets
• Clothing specialist
• Department stores
• Electric goods stores
• Electricians
• Electricity provider
• Bakery

• Hairdresser
• Banks
• Cafés
• Travel agent
• Taxi
• Watch seller
• Watch repairer

DID YOUR LIST CHANGE?
8
Classifications of Retailers

• Your text covers a number of ways to classify
  retailers. In groups, how would you classify the
  following retailers?

• Spend less shoes
• Wal-mart
• Daimaru
• Coles
• Lowes
• Cubby house toys
• Subway
• Starbucks
• Gothic Hair

• Digicall
• Just Jeans
• Silly sollys
• Rivers
• Bunnings
• Stefans
• Country road
• Dymocks
• Amcal

• Athletes foot
• Australia Post
• Healthy life
• Lifeline
• Toys R Us
• Video-ezy
• NB style
• The hat shop
• Golders

9
Wheel of retailing

• Name a retailer who entered the market as per the
  wheel of retailing theory and followed the phases
  described
  
• Name a retailer who started at the high end of
  the wheel, then followed the phases in reverse
  
• Name a retailer (mature) who didnt do anything
  like the wheel of retailing
  
• Should retailers resist the changes as described
  in this theory?
  
• How could a retailer resist such a change?

10
Trends in Retailing

• Shorter retail life-cycles
• New retailing formats emerging to supersede some
  of the older formats
  
• What stage are these outlets in?
• The Book café
• Bunnings
• IKEA
• The Disney Store
• Daimaru
• Coles
• Amcal pharmacies
• Delta music
• Victorias Secret

11
Other Findings and Trends

• Consumers seeking entertainment through Hedonic
  consumption
  
• New niche markets such as the aged, alternatives
  and elitist lifestyles
  
• Pressure on more forms of convenience
• Consolidating of big brands
• Consumer empowerment creating demand revolution
• dual virtual and physical stores

12
Future Retailing Challenges

• Changing consumer profiles and behaviours
• Shopping Centres
• Impact of the Internet
• Relationship retailing
• Institutional evolution

13
1. Changing consumer profiles and behaviours

• Price driven, respond to catalogues, haggle over
  price, wait for discounts
  
• 54 dont have time to do things need or want to
  do
  
• 40 working longer hours - Stressed
• Prefer 1 stop shopping, closer to home,
  preference to time saving solutions
  
• Focus on paying off debts, cutting down on
  expenses, cautious about financial position

14

• Increase in complaining behaviour
• Service has emerged as a key issue
• Loyalty programs have little effect - 26
• Boom in travel, wine, household services, health
  products, lingerie, insurance gambling
  industries (over 15 billion)

• Move towards freshly prepared meals
• Hygiene, taste and food quality important
  selection criteria

15
2. Shopping Centre Trends

• rapidly increasing number of shopping centres
• focus on expansions and refurbishment's
  resulting in repositioning
  
• Two significant and pollarised trends
• many customers are abandoning regional shopping
  centres - big crowds, longer distances to walk,
  parking
  
• Others patronising only shopping centres for one
  stop shopping
  
• small community shopping centres using innovative
  shopper loyalty programs
  
• Major shopping centres are lacking relevance and
  excitement (same shops in all centres)

16
Marketing of Shopping Centres

• branding and differentiation is the key
• key factors - signage, ease of parking, right
  tenancy mix, variety (boredom beating)
  
• more than shopping - entertainment and leisure
  facilities, food halls, community and social
  attraction, recreational attraction

17
New store and shopping centre formats

• Focus on satisfying leisure and lifestyles
• Shopping centres will become community hubs
• Need to satisfy the FREE and NOW consumer
• Focus on PLAY

18
3. What makes e-retailing different?

• Traditional retailing - physical, attractive
  presentation, store design layout, efficient
  stock control
  
• Shopping malls of 1970s 1980s defined how we
  shopped, spent our time and shaped suburban
  layouts
  
• Shopping considered to be a social experience
  form of entertainment
  
• Will Internet shopping fundamentally alter retail
  management practice ?

19
Internet retailing

• The Internet is claimed to be faster, cheaper and
  better
  
• Web retailers have significantly less costs than
  a traditional store front retailer
  
• Major benefit - information - easily accessible
  comprehensive
  
• Comparison shopping made much easier

20
4. Relationship Retailing

• Customer relationships
• customer base
• loyalty programs
• defection rates
• Channel relationships
• value delivery systems
• category management
• effective channel relationships

21
5. Institutional Evolution

• Mergers
• Diversification
• Downsizing
• Cost containment and driving value

22
So, In the 21st Century we will see more of

• Direct marketing
• dual distribution channels
• emerging trends and changing lifestyles
• Direct selling
• call centres / home and office sales/delivery
• Non-Traditional
• Internet and www
• video catalogues and kiosks
• Polarisation of trends
• As one trend emerges, the opposite will also work

23
How can traditional retailers survive ?

• Presence of real goods people to provide
  service
  
• Retailing must meet the social and hedonic needs
• Destination shopping through feel, smell and
  atmosphere
  
• Exciting products, mass customise, value added
• Retailers need to integrate offline and online
  activities whilst customising the offer
  
• Which retailers will survive, which will fail ?

24
Retail Marketing Decisions 1

• Assume the following
• You own Betros Brothers (small supermarket type
  store on Ruthven St) or a convenience store
  
• Sunday trading has just been approved to start in
  3 months time
  
• What do you do?

25
Retail Marketing Decisions 2

• Assume the following
• You own a music (CD/ record) store in Toowoomba
• You have a good range and specialise in
  alternative
  
• Sanity, HMV and In2music all have expanded their
  stores
  
• You cannot compete on price
• What do you do?

26
Retail Marketing Decisions 3

• Assume the following
• You own a small book shop
• A massive category killer has just opened a store
  near you
  
• You cant compete on price plus they have
  excellent coffee (sound familiar?)
  
• What do you do?

27
Why is an understanding of retailing important?

• Do the retailing trends, challenges and issues
  have implications for wholesalers?
  
• Consider this for retail decision 2
• Do the retailing trends, challenges and issues
  have implications for manufacturers?

28
Summary

• What is retailing?
• Retailing functions
• History of retailing
• Retail classifications
• Retailing in Australia
• Trends in retailing
• Retail marketing decisions
• Selecting a retailing site

29
Tutorial Program

• Case 2 Sears, Roebuck and Company
• Activity 2.7
• Activity 2.8

Next Week

• Identify the company for assignment 2
• Possible Monday tute time change
• Possible module change for next lecture