Retailing

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Retailing

• Final stop on the distribution path
• The process by which products are sold to
  consumers for personal use
• Retailers add value with image, inventory,
  service quality, location, and pricing policies

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The Wheel of Retailing

• New types of retailers find it easiest to enter
  the market by offering goods at lower prices than
  competitors after they gain a foothold, they
  gradually trade up, improving facilities and
  increasing the quality and assortment of
  merchandise, and offering special amenities
  upscaling increases costs causing prices to rise
  higher prices open the door for a new entrant
  charging lower prices

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Wheel of Retailing
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Wheel of Retailing
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Retail Life Cycle

• Retailers are also products because they provide
  benefits and must offer a competitive advantage
  to survive
• Introduction new retailer takes a unique
  approach to doing business
• Growth retailer catches on with shoppers, sales
  and profits rise, others start to copy it so
  retailer expands offerings
• Maturity many have copied it and an entire
  industry has formed, profits decline
• Decline retail format becomes obsolete

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Whats in Store for the Future
Demographics
Globalization
Technology
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Major Demographic Factors
Convenience
Catering to specific age groups
Recognizing ethnic diversity
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Meeting Multiple Needs
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Retailers Go Global
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Classifying Retailers

• All retailers are classified by the NAICS codes
• Some lines still blurred
• scrambled merchandising - strategy of carrying a
  combination of food and nonfood items

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Classifying Retailers by Service
Self-service
Limited-service
Full-service
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Limited-Service Retailer
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Self-Service Retailer
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Limited-Service Retailer
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Full-Service Retailer
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Classifying by Merchandise Selection

• Merchandise breadth is the number of different
  product lines available
• Narrow versus broad assortments
• Merchandise depth is the variety of choices
  available for each specific product
• Shallow versus deep assortments

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Merchandise Selection
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Store Types

• Convenience stores
• Supermarkets
• Specialty stores
• Department stores
• Hypermarket stores

• Discount stores
• General merchandise discount stores
• Off-price retailers
• Warehouse clubs
• Factory outlet stores

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Convenience Stores
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Warehouse Clubs
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Nonstore Retailing

• Any method a firm uses to complete an exchange
  that does not require a customer visit to a store
• Direct selling
• Automatic vending

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Direct Selling

• Direct selling occurs when a salesperson presents
  a product to one individual or a small group,
  takes orders, and delivers the merchandise
• Door-to-Door Sales
• Parties and Networks
• party plan systems
• multilevel pyramid schemes

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Party Plan System
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Multi-level Networks
Amway uses direct selling through multi-level
networks to expand globally
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Automatic Vending

• Appealing for selling convenience goods because
  of small space required, and minimal personnel to
  maintain and operate

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Vending Machines
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Levi Strauss Vending Machine
Levi Strauss sells jeans in vending machines to
French consumers
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Virtual Models Online
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E-Commerce and the Customer

• Benefits
• Shop 24/7
• Less travel
• More choices
• More information
• Price competition
• Fast delivery

• Limitations
• Lack of security
• Fraud
• Cant touch items
• Hard to distinguish color/texture online
• Expensive to return

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Comparison Web sites
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E-Commerce and the Marketer

• Benefits
• The World is your marketplace
• Decreases costs
• Very specialized businesses possible
• Real-time pricing
• Tracking of consumer behavior

• Limitations
• Lack of security
• Must maintain site
• Price competition
• Conflicts with conventional retailers
• Legal issues not resolved

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The Problem of Identity Theft
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Store Positioning Strategy
Store Image
Atmospherics
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REI Enhances Store Image
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Mapping Store Personality
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Store Design Setting the Stage

• Store layout and traffic flow
• Fixture type and merchandise density
• The sound of music
• Color and lighting
• The Actors Store Personnel
• Pricing policy

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Building the Theater Store Location

• Types of locations
• Site selection
• Location planners evaluate trade area and conduct
  site evaluation
• traffic flow, number of parking spaces available,
  ease of delivery access, visibility from street,
  local zoning laws, population characteristics,
  community life cycle, mobility, degree of
  competition

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Grid Layout
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Types of Store Locations
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Site Selection

• Reflect growth strategy
• Convenient to customers in trade area
• Population characteristics
• Degree of competition
• Target market location