BUS 425 RETAIL DISTRIBUTION MANAGEMENT FINAL REVIEW Retail

BUS 425 – RETAIL DISTRIBUTION MANAGEMENT FINAL REVIEW

Retail Management Decision Process The World of Retailing 1. Intro 2. Types of Retailers 3. Multichannel Retailing 4. Customer Buying Behavior Retailing Strategy 5. Retail Marketing 6. Financial Strategy 7. Retail Locations 8. Site Location Merchandise Management 1. Planning Merch. Assortments 2. Buying Systems 3. Buying Merchandise 4. Pricing 5. Retail Communications 9. Org. Structure and HR Mgmt. 10. Info Sys. & Supply Chain Mgmt 11. Customer Relationship Mgmt. Store Management 1. Managing the Store 2. Store Layout, Design, & Visual Merchandise 3. Customer Service

CHAPTER 1 INTRODUCTION TO RETAILING

What is Retailing? • Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use. A retailer is a business that sells products and/or services to consumers for personal or family use. James Darell/Getty Images

The Distribution Channel: Consumer Retailer Forward Integration Vertical Integration Wholesaler Manufacturer Backward Integration

CHAPTER 2 TYPES OF RETAILERS

Retail Strategy Decision Areas (Retail Mix) Customer Service Communications Mix Location Retail Strategy Store Design & Display Merchandise Assortments Pricing

A Critical Decision VARIETY ASSORTMENT PRICING SERVICES

Types of Food Retailers Conventional Supermarket Limited Assortment Supermarket Supercenter Warehouse Club Convenience Store

Safeway

Costco

Types of General Merchandise Retailers Department Stores Specialty Stores Category Specialists Home Improvement Centers Discount Stores Drugstores Off-Price retailers Extreme Value Retailers

Macy’s

Best Buy

CHAPTER 3 MULTICHANNEL RETAILING

“Tri-Channel” Retailing Catalog Internet Physical Store Steve Cole/Getty Images Digital Vision / Getty Images The Mc. Graw-Hill Companies, Inc. /Andrew Resek, photographer

Store Channel Browsing Touching & Feeling Products Personal Service Cash Payment Entertainment and Social Experience Immediate Gratification Risk Reduction

Catalog Channel Convenience Safety Quality of Visual Presentation

Internet Channel Deeper Assortments Broader Selection More Information to Evaluate Merchandise Personalization More info to retailer

Ann Taylor

Starbucks Brand Image Integrated Shopping Experience Merchandise Assortment Pricing

Stages in the Buying Process

CHAPTER 4 CUSTOMER BUYING BEHAVIOR

Stages in the Buying Process

Stages in the Buying Process

Getting into the Consideration Set Increase Performance Beliefs of Your Store Decrease Performance Beliefs About Competitor Increase Importance Weight of Attributes on which You Have an Advantage Add a New Benefit on which You Excel

Types of Buying Decisions Extended Problem Solving Limited Problem Solving Habitual Decision Making

CHAPTER 5 RETAIL MARKET STRATEGY

Retail Market Strategy Target market Format of the retailer (Retail Mix) Competitive Advantage

Competitive Advantage Customer loyalty Location Human Resources Management Distribution and Info. Systems Unique Merchandise Vendor relations Customer Service

Growth Strategies Market Penetration Market Expansion Retail Format Development Diversification

Chapter 6 FINANCIAL STRATEGY

Strategic Profit Model measurements Input Measures Output Measures Productivity

Strategic Profit Model

Chapter 8 RETAIL SITE LOCATION

Why is location important? The prime consideration in consumer choice Creates sustainable competitive advantage Creates potential long-term financial risk

Location Factors or “trade-offs” Size of Trade Area Occupancy Costs Pedestrian and Vehicle Traffic Restrictions on operations Convenience

Evaluating Locations Economic Conditions Competition Strategic Fit Operating Costs

Type of Locations

Chapter 9 HUMAN RESOURCES

The Downward Spiral FINANCIAL PERFORMANCE ISSUES • Low profits • High Costs EMPLOYEE RESPONSE • Decreased motivation and effort • Poor customer service • Lower job satisfaction • Greater turnover RETAILER RESPONSE • Layoffs • Freeze hiring and promotions • Reduced training • Salary freeze • Greater use of part-time employees and more outsourcing

Organizational Groupings Strategic Management Merchandise Management Store Management Administrative Management

Org. Structure – Single-Store Retailer

Org. Structure – National Chain Merchandise Operations Administration

Chapter 16 RETAIL COMMUNICATIONS MIX

BRAND = CUSTOMER EXPERIENCE

BRAND EQUITY Value of the brand Loyalty Lower marketing costs Increase margins Leverage brands

BUILDING BRAND EQUITY Awareness Associations (Personality) Reinforce Extend

Building Brand Awareness Top-of-mind Memorable names Number of stores Visual images Sponsorship

Creating Brand Associations Merchandise Category Price/quality Specific attribute or benefit Lifestyle or activity = BRAND IMAGE

Reinforcing the Brand Integrated Marketing Communications Merchandise Store Design Web site Customer Service An integrated experience

METHODS OF COMMUNICATION PAID UNPAID IMPERSONAL Advertising Sales promotions Store atmosphere Web site Personal Selling E-mail Web site (personalized) Publicity Word of mouth

Strengths & Weaknesses PAID UNPAID IMPERSONAL High Control Lower Flexibility Low Credibility HIGHEST COST High Control Highly Flexible Low Credibility High Cost Little Control Little Flexibility High Credibility Low Cost Little Control Little Flexibility High Credibility LOWEST Cost

Chapter 11 CUSTOMER RELATIONSHIP MANAGEMENT

Customer Relationship Management It costs 3 to 6 times more to sell products and services to NEW customers as it does to sell to existing customer GOAL = increase “share of wallet”

Customer Relationship Management Strategies Programs Systems Focus is on identifying and building loyalty with a retailer’s most valued customers

Loyalty Emotional connection Based on personal attention Exclusive or individually tailored offers or merchandise

CRM Process LEARN Collect customer data Analyze Customer Data ACTION Develop CRM program Implement CRM program Getty Images

Collecting Customer Data Transactions Customer contacts Customer preferences Descriptive information Responses to marketing CUSTOMER DATABASE

Customer Pyramid

Customer Retention Frequent shopper program Special customer services Personalization Community

CHAPTER 18 STORE LAYOUT, DESIGN & VISUAL MERCHANDISING

STORE DESIGN OBJECTIVES Store Design & Retail Strategy Influence Customer Buying Behavior Flexibility Cost Legal Considerations

W Hotels

STORE DESIGN - Layouts Grid Racetrack Freeform

STORE DESIGN – Signage & Graphics Location Category signage Promotional signage Point of sale Lifestyle images

WEB SITE DESIGN Follows the company brand Goal oriented Knows who you are and what you’ll like Anticipates your needs Makes you feel like a “platinum” customer Or provides you a path to becoming one Integrates seamlessly with the physical store

CHAPTER 19 CUSTOMER SERVICE

Customer Service - Approaches Customized Standardized Both are expensive, but…

The “Gaps” Model Customer Expectations Management Perceptions ACTUAL SERVICE Standards Customer’s Perceptions Retailer Communications Knowledge Gap Standards Gap Delivery Gap Communications Gap