14 Retailing Copyright 2017 Cengage Learning All Rights

14 Retailing Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

LEARNING OUTCOMES 1. Explain the importance of the retailer within the channel and the U. S. economy 2. List and understand the different types of retailers 3. Explain why nonstore retailing is on the rise and list the advantages of its different forms 4. Discuss the different retail operations models and understand why they vary in strategy and format Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 2

LEARNING OUTCOMES (continued) 5. Explain how retail marketing strategies are developed and executed 6. Discuss how services retailing differs from goods retailing 7. Understand how retailers address product/service failures and discuss the opportunities that service failures provide 8. Summarize current trends related to customer data, analytics, and technology Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 3

LO 1 Retailing • All activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use • Retailer: Channel intermediary that sells mainly to consumers • Retail industry in America • Comprises mostly small businesses • Dominated by a small number of large companies Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 4

LO 2 Classification of Retail Operations • Based on: • • Type of ownership Level of service Product assortment Price Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 5

LO 2 Exhibit 14. 1 Types of Stores and Their Characteristics Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 6

LO 2 Types of In-Store Retailers Operations Department stores Specialty stores Supermarkets Drugstores Convenience stores Discount stores Restaurants Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 7

LO 2 Categories of Discount Stores • Full-line discountstores • Supercenters • Specialty discount stores • Category killer • Warehouse club • Off-price retailers • Factory outlets • Used goods retailers Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 8

LO 3 Nonstore Retailing • Enables shopping without visiting a physical store location • Forms • • Automatic vending Direct retailing Direct marketing Online retailing (e-tailing) Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 9

LO 4 Retail Operations Models • Tradeoffs inherent to restrictive operating models have led to the emergence of hybrid retail operating models and online-only retailers • Online-only retailers have low operating costs Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 10

LO 5 Retail Marketing Strategy • Developed based on the goals established by stakeholders and the overall strategic plans developed by company leadership • Strategic tasks that precede tactical decisions • Defining and selecting a target market • Developing the retailing mix Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 11

LO 5 Exhibit 14. 2 Retailing Mix Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 12

LO 6 Retailing Decisions for Services • Service industries are customer oriented, and service quality is a priority • Service distribution focuses on: - Minimizing wait times - Managing service capacity - Improving service delivery - Establishing channel-wide network coherence Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 13

LO 7 Service Recovery • Best retailers have plans in place to recover and benefit from lapses in service • Actions that might be taken - Notifying customers in advance of stockouts - Implementing liberal return policies - Issuing product recalls in conjunction with promotional offers Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 14

LO 8 Emerging Technologies Used by Retailers • • Big data analytics Beacon Facial recognition and biometric sensors Shopper marketing Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 15

LO 8 Developments in Retail Management • Showrooming and data analytics have led to the development of virtual reality apps and retail channel omnification • Click-and-collect enables customers to buy something online and then pick up the merchandise from a physical store • Robots are replacing or augmenting retail employees Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 16

KEY TERMS • • • Retailing Retailer Independent retailer Chain store Franchisor Franchisee Gross margin Department store Specialty store Supermarkets Drugstore • • • Convenient store Discount store Full-line discount store Supercenter Specialty discount store Category killer Warehouse club Off-price retailer Factory outlet Used goods retailer Restaurant Nonstore retailing Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 17

KEY TERMS Automatic vending Self-service technologies Direct retailing Direct marketing Telemarketing Direct mail Microtargeting Shop-at-home television networks • Online retailing • Floor stock • Back stock • • Retailing mix Brand cannibalization Destination store Atmosphere Layout Big data analytics Beacon Shopper marketing Shopper analytics Retail channel omnification • Click-and-collect • • • Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 18

SUMMARY • Retail establishments are classified according to the type of ownership, level of service, product assortment, and price • Each operating model can be summarized as a set of guiding principles • Strategic retailing goals focus on increasing sales, reducing costs of goods sold, and improving financial ratios • Service recovery is handled proactively by stores to maximize the customer experience Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 19

Copyright © 2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG 11 | CH 14 20