Retailing

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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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