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The Beginnings From the earliest times, people have spent their days providing for their most basic needs. Shelter Food Clothing The earliest form of retailing was trading. 1 What’s Changing Today in Retailing and E-Commerce? Dr. KS Too many stores aging population Fickle Consumers new household forms Difficult Economy gender roles Need to meet consumer needs through service mobility of households Need clear definitions of electronic banking consumers location of stores Streamlining inventory - RFID two career couples Shopping is boring, time more spending by children and consuming, poor service teens The right mix of bricks and mortar poverty of time with e-commerce Multi-channel retailing What Is Retailing? Retailing involves the retailing the selling of selling of products. products to the customer products goods and services that have Products include goods monetary value and services. goods tangible items that are made, manufactured, or grown 3 What Is Retailing? Services are often services intangible things that people do for intangible. us that make us feel better or enhance our lives The retailing process ends retail customer purchaser of goods and with the retail customer. services from retailers 4 Retailers Offer Variety Retailing makes a vast variety of goods and services available to consumers. Products such as sweaters are available from many retailers in a variety of colors, types, and styles. 5 Retailing Is Global Technology has made retailing more of a global activity than ever before. Many large companies have retail outlets in other countries. Some companies sell their products globally via the Web. 6 Retailing Is High Tech Retailers use: the Internet to sell goods and services, provide information, and advertise. video technology to train employees. computers to track inventory, orders, sales data, customer demographics, and customer buying habits. 7 Retailers Are Everywhere Your Your Your Your Your transportation computer clothing CDs bed to school Goods and Services Available Through Retailing Your Your Your Your textbooks and television toothbrush breakfast school programs supplies 8 Nature of Retailing manufacturer business that makes or produces Products move from the a good for sale manufacturer through channel of distribution channels of distribution. path merchandise takes from where it is made to the consumer Channels of distribution direct channel path that leads directly from can be direct and indirect manufacturer to consumer channels of distribution. indirect channel path that follows more than one step 9 Nature of Retailing A product moves from the wholesaler one who manufacturer to a buys large quantities of product and then resells wholesaler, to the retailer, it in smaller quantities to and to the consumer. retailers Another type of channel of producer channel manufacturer also owns distribution is the producer its retail stores; product channel of distribution. goes from manufacturer to retail store to customer 10 Functions within marketing channel Dr. KS Collection of assortments Sorting, storing Breaking bulk Information Adding Value Customer service Place convenience Time convenience Pricing convenience Benefits of Retailing Variety Convenience Payment options Locations Competitive pricing Employment Community Involvement Economy Jobs 12 What Retailers Do Store Advertise and Buy Determine Goods Promote Merchandise Selling Price Purchased Products Hire and Display Manage Retailers Merchandise Employees Provide Manage Service Sell Goods or Customer Risk Products Services Service 13 Career Areas of Retailing Marketing and Advertising Store Operations Loss Prevention Store Management Finance Human Resources IT and E-commerce Sales Distribution, Logistics, and Supply-Chain Management Merchandise Planning and Buying Entrepreneurship 14 Retailing: Makes goods and services available to the customer. Retailers are categorized so we can better understand the scope of the retail industry, and all the parts that make up the whole industry. Sort by the type of products sold NAICS CODES North American Industry Classification System – Categorizes all industries in US, Canada, and Mexico – Allows nations to compare statistics for it’s own country with other countries. – Each industry is clearly defined Why do we classify retailers? 1. Establishment of benchmarks for setting objectives 2. Establishment of benchmarks for evaluation of progress 3. Establishment of benchmarks for troubleshooting 4. Establishment of benchmarks for development of solutions Dr. KS Classification Types Each grouping has its own reasons for analysis Ownership: responsibilities, standardization across outlets Store type: relationship of merchandise mix to customer expectations Services vs goods: intangible vs. tangible Non-store: methods for building relationships Retail Industry 1. Motor Vehicle and Parts Dealers 2. Furniture and Home Furnishings Stores 3. Electronics and Appliance Stores 4. Building Material and Garden Equipment and Supplies Dealers 5. Food and Beverage Stores 6. Health and Personal Care Stores 7. Gasoline Stations 8. Clothing and Clothing Accessories Stores 9. Sporting Goods, Hobby, Book, and Music Stores 10. General Merchandise Stores 11. Miscellaneous Stores 12. Non-Retail Stores 1. Motor Vehicle and Parts Dealers Sell motor vehicles from a fixed location (showroom or open lot) New and Used dealers, recreational vehicles, motorcycle, boat, aircraft, golf cart, snowmobile, and utility trailers Ex: Ford, Toyota, Chevrolet Flexible Prices, bargaining / Saturn (Fixed $) Auto parts: NAPA Auto Parts, Just Tires 2. Furniture and Home Furnishings Stores Mattress and bed store (Mattress Giant, Sealy's) Office Outfitters Lamps, kitchenware. Floor Coverings (sell and install vinyl, hardwood, rugs, carpets) Window Treatments (Blinds, shades, curtains) Bath Shops (Bed Bath and Beyond, Lechters) Custom Pix Frames; Linens 3. Electronics and Appliance Stores stoves, fridges, TV’s, Computers Repair Services Vacuums, sewing machines, toasters Computer Centers (cables, surge protectors, hardware) Camera (Ritz Camera, Camera Repair) Phones (Video Cameras, pagers, stereos, phones) 4. Building Material and Garden Equipment and Supplies Dealers Construction of a home/office building Lumber Yards, Hardware Stores, Paint and Wall paper stores, cabinet stores, fencing, garage doors, plumbing, window stores Home Depot and Lowes Franks Nursery and John Deere 5. Food and Beverage Stores Special Equipment (Refrigerated cases, display cases Grocery Stores, Supermarket Chains, Conveniences Stores, Deli, 7-11 Warehouse Clubs – Wal-Mart, Target (newer trend) 6. Health and Personal Care Stores Pharmacies and Drugstores CVS, Beauty Supply Stores, Sally Beauty Supply, Optical Stores (Lens Crafters) Health Food Stores (GNC) 7. Gasoline Stations Retail automotive fuels and oils Specialized equipment Service or Auto repair stations Convenience Stores 8. Clothing and Accessories Stores Men's, Women’s, Children Specialization: Bridal Wear, Western Wear, Fur or Leather Clothing, Work Uniforms Eye Glasses - Optical Accessories: Hats, Costume Jewelry, Belts Luggage or Leather Goods (Wilson's) *Women purchase $70 billion in apparel and accessories/year 53% of purchases are made at dept. stores 9. Sporting Goods, Hobby, Book, and Music Bike Shops, Camping Gear, Exercise, Fitness Specialty Sports Footwear; Fitness Stores Popshops at Health Clubs Craft Stores, Game Stores, Toy Stores Musical Instruments, Sheet music, specializing in pianos Books: newsstands, magazines, record stores, Barnes and Noble, Tower Records 10. General Merchandise Retailers Discount Stores Specialty Stores (ex: drugstores) Category Specialists Department Stores Dollar Stores 11. Miscellaneous Store Retailers Products with unique characteristics Florists Used-merchandise stores (flea markets, secondhand stores, thrift stores, rare book stores) Pet Stores Souvenir shops; greeting cards, holiday decoration Art galleries, candle shops, auction houses 12. Non-Store Retail Sell merchandise from a non-fixed location Infomercials Catalogs Door-To-Door In-Home Demonstrations Vending Machines Online TYPES OF STORES AND OWNERSHIP 1) Independent Store: privately owned, one location, no agreements with franchises 2) Chain Stores: at least 2 locations; (local, regional, national, international); owned by one owner or company; decisions by owner affect all – Example WAWA! 3) Store Groups: owned by large corporations; operate independently of one another – do not share mgt. decision making like retail chain. – EX: Federated now Macy*s Inc. owns Chains Pro's: Con's: Multiple outlets under Inflexibility common ownership High investments Efficiencies Uniformity but . . . Bargaining power Reduced control Working through volume purchases Greater customer exposure GAP INC. Store Groups Gap Banana Republic Old Navy Piperlime (footwear) Dick’s Owns Golf Gallery 77 Store across the US.
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