Retailing Retailing encompasses the business activities involved in
Retailing
Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.
Issues in Retailing How can we best serve our customers while earning a fair profit? How can we stand out in a highly competitive environment where consumers have too many choices? How can we grow our business, while retaining a core of loyal customers?
The Philosophy Retailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.
Table 1. 1 The 10 Largest Retailers in the U. S. , 2001 Rank Company $ Sales # of stores # of employees 1 Wal-Mart 219, 812 4, 414 1, 383, 000 2 Home Depot 53, 553 1, 348 256, 300 3 Kroger 50, 098 3, 534 288, 000 4 Sears 41, 078 2, 960 310, 000 5 Target 39, 362 1, 381 223, 500 6 Albertson’s 37, 931 2, 400 220, 000 7 Kmart 37, 028 2, 150 240, 525 8 Costco 34, 797 369 64, 500 9 Safeway 34, 301 1, 773 193, 000 10 J. C. Penney 32, 004 3, 770 270, 000 (million)
A Typical Channel of Distribution Manufacturer Retailer Wholesaler Final Consumer
The Retailer’s Role in the Sorting Process
Distribution Types • Exclusive: suppliers make agreements with one or few retailers that designate the latter as the only ones in a specified geographic area to carry certain brands or products • Intensive: suppliers sell through as many retailers as possible • Selective: suppliers sell through a moderate number of retailers
In this class: ØBusiness to Consumer. ØCustomer vs Consumer ØGoods vs Services vs Ideas
Consumer Goods 1. Convenience • Little effort/immediate use 2. Shopping o Bought after comparison o Less often than convenience 3. Specialty o Unique Items o. Time/Money/Effort
v. Competitive Prices v. Value-Added v. Expert associates, Credit, Gift Wrapping, Delivery, v. Unique Store Experience v. Shopping Experience v. Color, furniture, music, lighting v. Standard of Living v. Retail helps in TWO ways: Supply & Influence v. Technology helps v. Make consumers aware of new products (Promotion)
Economic Benefits of Retail q. Anyone is allowed to open a business q. Can buy/sell what they want q. Supply/Demand q. Compete in the Marketplace q(all companies) Treated equally, and protect by law q. Own property without government intervention q. Enter into contracts with whatever companies q. Employment q. Taxes
Social Benefits of Retail q. Philanthropy q. Environment
Functional Areas of Retail 1. Merchandising o 2. 3. 4. 5. 6. Product & Product Line decisions Operations o Day-to-Day activities necessary (efficiency) o Schedule, maintenance, inventory, warehousing, security… Promotions o Communication Finance o Controlling & Managing Money Human Resources o Managing Employees Information Technology o All forms of technology.
5 Different Utilities 1. Form 2. Place 3. Time 4. Possession 5. Information
Shopping Centers q. Shopping Malls q. Anchors Stores q. Strip Malls q. Sidewalks q. Town Centers q. Around a main center of town or square
Central Business Districts q. CBD q. Central locations q. Cluster of Businesses
Traditional Retailers q. Specialty Stores q. Manufacture Retail Stores q. Boutiques q. Supermarkets q. Drugstores q. Kiosks q. Department Stores q. Convenience Stores
Discounts Retailers q. Supercenters q. Hypermarket q. Warehouse Clubs q. Off-Price Retailers q. Big Lots, T. J. Maxx q. Factory Outlets q. Excess or unsold q. Big Box Stores q. Best Buy, Home Depot q. Dollar Stores
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