Académique Documents
Professionnel Documents
Culture Documents
To define retailing, consider it from different perspectives, demonstrate its impact, and
note its special characteristics
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.
Issue 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 so many
choices?
How can we grow our business while retaining a core of loyal customers?
High unemployment, low consumer confidence, high saving rates have reduced consumer
spending. At the same time retail competition has increased through increase format
blurring (sales of cameras at office supply stores, carpeting and major appliances at home
improvement centres).
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.
An Ideal Candidate for a Retailing Career
Must be people person (more important than technical knowledges as technical skills can
be taught more easily than people skills).
Must be flexible
Must have analytical skills
Must have stamina
Should be decisive
A Typical Channel of Distribution
Manufacturers → Wholesalers Retailers Final Consumers
The Retailer’s Role in the Sorting Process
Multi-Channel Retailing
Retailers sell to consumers through multiple retail format: Web sites and physical stores.
To introduce the concept of strategic planning and apply it
Special Characteristics Affecting Retailers
Small average sale, impulse purchase and popularity of stores
Retail Strategy is an overall plan for guiding a retail firm to influence firm’s business activities
and to influence firm’s respond to market forces
6 Step in Strategy Planning
1. Define the type of business (corporate mission)
2. Set long-run and short-run objectives
3. Determine the customer market
4. Devise an overall, long-run plan
5. Implement an integrated strategy
6. Evaluate and correct (fine-tune)
Applying the Retailing Concept
Customer orientation, Goal orientation, Coordinate effort, Value-driven Retailing concept
Retail Strategy
To show why the retailing concept is the foundation of a successful business, with an
emphasis on the total retail experience, customer service, and relationship retailing
Customer Service
Activities undertaken by a retailer in conjunction with the basic goods and services it sells. This
includes: Store hours, Parking, Shopper-friendliness, Credit acceptance, Salespeople.
A Customer Respect Checklists:
Do we trust our customers?
Do we stand behind what we sell?
Is keeping commitments to customers important to our company?
Do we value customer time?
Do we communicate with customers respectfully?
Do we treat all customers with respect?
Do we thank customers for their business?
Do we respect employees?
Types of Loyalty Programs
1. Additional discounts at register - Not a real loyalty program
2. 1 free with every “n” items purchased - Easily copied, no customer database
3. Rebates based on cumulative purchases - Customer maintains records
4. Targeted offerings and mailing based on purchase history - Tesco example “Market
research staff know more about my customers than board chairperson”
To indicate the focus and format of the text
To examine the differences in relationship building between goods and services retailers
• What customer services are expected and what customer services are augmented for a
particular retailer?
• What level of customer service is proper to complement a firm’s image?
• Should there be a choice of customer services?
• Should customer services be free?
• How can a retailer measure the benefits of providing customer services against their costs?
• How can customer services be terminated?
Typical Customer Services Miscellaneous Customer Services
• Credit • Bridal registry
• Delivery • Interior designers
• Alterations/ Installations • Personal shoppers
• Packaging/gift wrapping • Ticket outlets
• Complaints/Returns handling • Parking
• Gift certificates • Water fountains
• Trade-ins • Pay phones
• Trial purchases • Baby strollers
• Special sales • Restrooms
• Extended store hours • Restaurants
• Mail/phone orders • Babysitting
• Fitting rooms
• Beauty salons
• Fur storage
• Shopping bags
• Information
Service Retailing
1. Rented goods services– leased cars, hotel rooms, carpet cleaning equipment
2. Owned goods services– plumbing, appliance repair,
3. Non-goods services– haircut, professional services (physician, lawyer)
4 Characteristics of Services Retailing
Intangibility Inseparability Perishability Variability
No patent Consumer may Services cannot be Standardization and
protection be involved in inventoried quality control hard to
possible service Lost revenues from achieve
Difficult to production unsold services are lost Customers may
display/ Centralized forever perceive variability
communicate mass Effects of seasonality even when it does not
service benefits production can be severe actually occur
Quality judgment difficult Planning employee Need to
is subjective Consumer schedules can be industrialize/mechanize
Some services loyalty may rest complex /service blueprint
involve with employees Need to balance supply services to factor out
performances/ and demand (yield variability
experiences management pricing)
Retail Strategy
Mix is firm’s particular combination of store location, operating procedures, good/service offered,
pricing tactics, store atmosphere, customer services and promotion methods.
Earning destination retailer status. Include trade joe’s, IKEA, microcenter, fortunoff outdoor store,
j7r music world b&h, photo video. Some combination of price-oriented and cost efficient,
innovative or exclusive merchandise and superior customer service. Wide or deep merchandise
strategy.
The Wheel of Retailing
Low-end strategy: low prices, limited facilities and services, price-sensitive customers.
Medium Strategy: moderate prices, improved facilities, broad base of value- and service-
conscious consumers.
High-end strategy: high price, excellence facilities ans services, upscale consumers.
Don’t lose sight of prime customer’s pricing awareness
Beware of dangers in upgrading target market
Don’t create opening for new cost-conscious retailer to arise
Use unbundled pricing to separately charge for select service such as delivery, installation
etc.
Low High
Low retail location – side street High rental shopping center/center business
distinct location
No service/ service charged at additional fee Elaborate service available included in price
(service may be limited to credit and returns) as: credit, delivery, alterations, decoration, gift
wrapping, layaway
Spartan fixtures and displays Elaborate fixture and displays
Simple retail personnel organization Elaborate retail personnel organization
Price emphasis in promotion No price emphasis in promotion
Self-service or high sales per store personnel Product demonstrated, low sales per store
ratio personnel ratio
Crowded store interior Spacing store interior
Most merchandise visible Most merchandise in back room
Traditional Non-traditional
Presences Limited geographical presence National presence
within city or specific region
Service High involvement with consumer Low involvement with consumer on shop
Low expectation about service floor.
standard High expectation.
Delivery No strict norm for delivery.
Volume Usually sell/buy consistent Sell/buy higher volumes throughout the
volume with increase during year due to promotions and regular
season/festivals expansions.
Margin Demand high margin while Demand high margin also fixed % of
retention low retention.
Promotion Seasonal Monthly/daily promotion on product.
Relationships Sale personnel relationship with Professional and legal relationships with
owner companies