Retailing

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How retailers add values

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1. Provide assortment

2. break bulk

3. hold inventory

4. offer services

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Buy and store merchandise in large quantities from manufacturers and then resell the merchandise to retailers

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Wholesalers

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Firm performs more than one set of activities in the channel

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vertical integrations

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retailer performs some distribution and manufacturing activities

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Backward integration

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Manufacturers undertake retailing activities

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forward integration

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Top five retailers in world

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1. Wal-mart

2. carrafour

3. Tesco

4. Metro

5. Kroger

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the ceopetition between the same type of retailers

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Intratype competition

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When retailers offer merchandise not typically associated with their type of store

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Scrambled merchandising

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competition among retailers that sell similar merchandise using different types fo retail outlets

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Intertype competition

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Elements of the retail mix

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1. Customer service

2. location

3. Store design and display

4. communication mix

5. merchandise management

6. pricing

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set of decisions retailers make to satisfy customer needs and influence their purchase decisions

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retail mix

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function performed by retailers or wholesalers in which they receive large quantities of merchandise and sell them in smaller quantities

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Breaking Bulk

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Classification scheme to collect data on business activitiy in each country

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North American Industry Classification System (NAICS)

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The number of merchandise categories a retailer offers

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Variety

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The number of different items offered in a merchandise category

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Assortment

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Variety is often referred as

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Breadth of merchandise

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Assortment is referred to as

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Depth of merchandise

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Each different item of merchandise is called a

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Stock-keeping unit (SKU)

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Large, self-service retail food store offering groceries, meat, and produce, as well as some nonfood items, such as health and beauty aids and general merchandise

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Conventional Supermarket

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Large, combination food and general merchandise stores

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Hypermarkets

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Compared to Hypermarkets, Supercenters have a greater emhasis on...

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perishables

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retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses

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Warehouse Clubs

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retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinct deparments

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Department Stores

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national brand vendors sell them merchandise that is not available elsewhere

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Exclusive Brands

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items develped and marketed by the retailer, abailable only in its stoers

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private-label brands

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retailers that offer a broad variety of merchandise, limited service, and low prices

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Full-Line discount stores

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big-box stores taht offer a narrow but deep assorment of merchandise

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Category Specialists (ex. Staples)

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concentrate on a limtied number of completmentary merchandise categories and provide a high level of service

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Specialty stores

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specialty stores that concentrate on health and beauty care

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Drugstores

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small disc out stores that offer a braod variety but shallow assortment of household goods, health, and beauty care products

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Extreme-value retailers or dollar stores

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Offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturerer's suggested retail price

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Off-price retailers

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end-of-season merhcandise that will not be used in following seasons

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Closeouts

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merchandise with minor mistakes in construction

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Irregulars

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each day, at the same time, members receive and email that annonces the deals available

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Flash Sales

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Off-price retailers owned by manufacturers or retailers

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Outlet Stores

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off-price retailers owned by manufactureres

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Factory outlets

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Firms that primarily sell services rather than merchandise

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Service Retailers

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Four differences in the nature of the offerings provided by services and merchandise retailers

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1. simultaneous production and consumption

2. Intangibility

3. Perishability

4. Inconsistency of the offering to customers

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the opportunity to complete a transaction

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Channel

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primarily used to communicate information to consumers

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Medium

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using more than one channel to sell and deliver merchandiseand services to consumers

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Multichannel retailing

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Refers to a coordinated multichannel retail offering that provides a seamless customer experience when using all of the reailers shopping channels

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Omniretailing

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89% of U.S. Retail sales by channel

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Store

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nonstore retail channel in which the retail offering is communicated to customers through a catalog mailed to customers

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Catalog Channel

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Benefits of Multichannel Retailing

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1. Increased Assortments

2. Low-cost, consistent execution

3. Current Information

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retail channel in which customers watch a TV advertisment that demonstrates merchandise and then place orders for that merchandise

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Direct-response TV

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Retail channel in which salespeople interact with customers face-to-face

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Direct Selling

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retail channel in which merchandise or services are stored in a machine and dispensed to customers

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Automated Retailing

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Benefits of the store channel

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1. Touching and Feeling

2. Personal Service

3. Risk Reduction

4. Immediate Gratification

5. Entertainment and Social Experience

6. Browsing

7. Cash Payment

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Benefits of Catalogs

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1. Safety

2. convenience

3. ease of use

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Benefits of Internet

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1. Safety

2. Convenience

3. Broad and deep assortments

4. Extensive and timely information

5. Personalization

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Challenges facing multichannel retailers

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1. multichannel supply chains and Information systems

2. Centralized vs. Decentralized multichannel retailing

3. Consisten brand image across channels

4. Merchandise Assortment

5. Pricing

6. Reduction of Channel Migration

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Occurs when a consumer goes into a store to learn about different brands and products and then searches the Internet for the same product at lower prices

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Showrooming

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When customers gather information from one of its channels, then buy from a channel hosted by a competitor

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Channel Migration

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When a manufacturer sells directly to consumers, thus competing directly with its retailers

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Disintermediation