ee A 4 . 9 jo? Ww VW, : f Retailing ManagementConcerns of Retailers Retailers are faced with many issues as they attempt to be successful. 1.Customer satisfaction Retailers know that satisfied customers are loyal customers. 2. Ability to Acquire the Right Products A customer will only be satisfied if they can purchase the right products to satisfy their needs.Product Presentation el Once obtained products must be presented or merchandised ‘to customers in a way that generates interest. Lc a Traffic Building Building “traffic” is accomplished with a variety of promotional techniques such as advertising, including local newspapers or Internet, and specialized promotional activities, such as coupons. Layout CA] Layout: For store-based retailers a store's physical layout is an important component in creating a retail experience that will attract cc A] customers. The physical layout is more than just deciding in what part of the store to locate products. Location Where to physically locate a retail store may help or hinder store traffic Understanding the trade-off between costs and benefits of locations is an important retail decision.Keeping Pace With Technology <> Technology has invaded all areas of retailing including customer knowledge (e.g, customer relationship management software), (bs ai product movement (e.g,, use of RFID tags for trackins purchase (e.g, scanners, kiosks, self-serve checkot technologies (e.g, online shopping carts, purchase recommendations) and many more. Ways to categorize retailers There are many ways retailers can be categorized depending on the characteristics being evaluated. For our purposes we will separate retail based on six factors directly related to major marketing decisions: 1), point-of- web Target Markets served Product Offerings Pricing Structure Promotional Emphasis Ditribution Method Service Level and one operational Factor ‘OwnershipTARGET MARKETS SERVED Once obtained products must be presented or merchandised to customers in a way that generates interest. ©. MWA * MassMarket - Mass market retailers appeal to the largest market priced products that have low profit margin (ie., price minus cost). * Specialty Market Ce! Retailers categorized as servicing the specialty market are likely to target buyers looking for products having certain features that go Sal beyond mass marketed products. * Exclusive Market Appealing to this market means appealing to discriminating customers who are often willing to pay a premium for features found in very few products and for highly personalized services.« PRODUCTS CARRIED Under this classification retailers are divided based on the width and depth of the products they carry. * General Merchandisers These retailers carry a wide range of product categories though the number of different items within a particular product line is generally limited. * Multiple Lines Specialty Merchandisers Retailers classified in this category stock a limited number of product lines but within the categories they handle they often offer a greater selection than offered by general merchandisers. * Single Line Specialty Merchandisers some retailers limit their offerings to just one product lines, and sometimes only one product.Retailers can be classified based on their general pricing strategy. DISCOUNT PRICING Discount retailers are best known for selling low priced products that have a lot of profit margin PRICING STRATEGY COMPETITIVE PRICING Full Price Pricing The objective of some retailers is Retailers targeting exclusive not to compete on the price but markets find such markets are far alternatively not to be seen as less price sensitive than mass or charging the highest price. specialty markets.PROMOTIONAL FOCUS Cee eee ene tne ag eeranae NY o err eee tain methods more than Geena Cree ucla itso) icctapt Advertising Many retailers find traditional mass promotional methods of advertising such as newspaper or television, to continue to be their best means for creating + scustomer interest. ee Personal Selling Retailers selling expensive or high-end product find a considerable amount of their promotional effort is spent in person to person contact with customers. Direct Mail A particular form of advertising that many retailers use for the bulk of their promotion is direct mail advertising through post mail.DISTRIBUTION METHOD Retailers sell in many different formats with sure requiring consumers visit a physical location while others sell to customers in a virtual space. | should be acted that many retailers are not, tied to a single distribution method but operate using multi methods.Store-based sellers by far the predominant method consumers use to obtain products is to acquire these by physically visiting an outlets (aka brick-and-mortar). Stand alone These are retail outlet that do not have other retail outlets connected. Strip- shopping center A retail arrangement with two or more outlets physically connected or that share physical resources (e.g share parking lot). @ is om © Shopping area A local centre of retail operations containing many retail outlets that may or may not be physically connected but are in close proximity to each other such as a city shopping district Regional shopping mall Consists of a large self-contained shopping area with many connected outlets. Service level Retailers attract customers not only with desirable products and affordable prices, but also by offering services that enhance the the purchase experience.There are at least three levels of retail services: Self-service This service level allows consumers to perform must or all the services associated with retail purchasing, Assorted - service The majority of retailers offer some level of service to consumer. Service include handling the point-of-purchase, transaction , product selection assistance and delivery. Full-service The full service retailer attempts to handle nearly all aspects of the purchase to the point where all the consumer does is select the item they wish to purchase.OWNERSHIP STRUCTURE rele US eat 14 This Classification covers large retailers predominantly operating in the non-store retail arena much as online . catalog, and venting Cente rors us Under this ownership structure an individual 0 corporate entity owns and operates one or a very small number of outlets. Genes A retail chain consist of multiple retail outlets owned and operated by a single entity all performing similar retail activities. {oeRETAIL FORMATS: PART 1 Now that we have presented ways in which retailers can be classified in these MOM AND POP aS Ty Ouchi In many cases these Corea] re TOR ie eels elu Neueell aractiad Peet y three format; ge Sy DISCOUNTERS Meee ad Pegs ely ne Spee Raine) discount pricing. WAREHOUSE STORES Stem Creer So Pee ese un ena Percerioutelias CicocitsRetailers such as lands end and LL Bean Possibly the most publicized retail have built their business by having model to evolve in the last 50 years customer Place orders after seeing is the retainer that principally sells products that appear in mailed Catalog. via internet. Retail format; Part 2 Catalog Retailer E-Tailer ai Franchise A franchise is a form of contractual \ channel in which one party, the franchisor controls the business activities to another party _ the franchisee under the arrangements an eligible franchisee agree to pay for the right to use the franchisors business. Convenience Store ‘As the name implies these general merchandise retailers cater to the offering customer an easy purchase experience. Ven Within this category are automated method for allowing consumers to make purchases and quickly acquire products.RETAIL SUMMARY CHART Below we summarize each retail format by using the seven categorization characteristics, the characteristics identified for each format should be viewed as the "most likely "case for the format and are not necessarily representative of all retailers that fall into this format.Total Retail Trade Structure <> Some appreciation of the magnitude of the total Retail trade structure and changes therein may be gained from a Cc “1 consideration of the dollar and physical volume of sales of all retail establishment. Volume Sales Over some three decades covered by the census bureau of business data in total sales of retail establishment fluctuated greatly with business condition. <> Classification Of Retail Stores L a] The same term ,retail store ,is used to refer to the vast RH. Macy and Company department store in new York city and to the smallest cigar and newsstand operated in the lobby of a public Building.E al Ownership Classes <@ Analysis of retail stores in terms in ownership Classes has long been there great interest because this approach involves numerous competitive and other implications Single-unit independent stores Over a long period of years ,the independent retailers who cE al operates a single store has dominated the retailing structure. <@> Chain or Multiunit Retailer The major competitors and of the independent is the chain, multiunit or chain stores comprise about 10 percent alcohol of all retai establishment counted in the census of business.Manufacturer -Owned Stores C1 <@> In certain lines of trade and chain retailer compete with manufacturer who have integrated their operation forward in the distribution channel by the use of their own retail outlets. Farmer -Owned Stores Another ownership class consist of farmers,some of whom maintain roadside establishment enumerated or leased facilities in public retail Cc 1 market. <@> Government -Owned Stores in a socialist commonwealth the government would own and operate business organization for the benefits of the state.Consumer Cooperative A consumer cooperative is a marketing organization owned and operated for the mutual benefits of consumer-owner who have voluntarily associated themselves for the purpose, such an organization is attempt to substitute joint or cooperative efforts of consumer for those of private enterprise.EXTENT AND NATURE OF THE LINE OF GOODS HANDLED 3 broad classes: General Merchandise Single-Line Stores Stores aneiee ouch en atenalval ‘An extensive variety of one line of Variety of goods that they merchandise that is related in sale Pannict be ciacsiiad Inte of use is the basis for classification some kind of business asa single-line store. groupings designated by the name of a principal type of commodity. SPECIALT Specialty Stores This term refers to stores which handle an extremely limited variety of goods. This term specialty’ when used to designated a store implies limited variety of goods.KIND OF BUSINESS GROUPINGS Single-lune and specialty Stores are not separately classified in Census tabulations, and it would probably be impossible to provide quantitative information about each of these two classes. With the Exception of the general merchandise group, all stores included in this table may be considered as single line or specialty.vw Classification of stores according to location indicates the extent to CLASSIFICATION BY LOCATION which retail trade is concentrated or dispersed, and it is indicative of consumer buying habits. Stores are found in: @ Rural buying centers @ small cities or towns @ Urban areas in a wide variety of specific types of locations. @ Sales volume is greater in the largest areas than would be expected on the basis of population, because of a tendency of major shopping goods stores to draw trade beyond the boundaries of the metropolitan area.Consumer Service Establishments C1 <@> Any broad examination of the retailing structure must include some consideration of the hundreds of thousands of service establishments that market primarily to the ultimate consumer. Other Classifications <> Additional classifications in connection with analyses of small and co} large-scale retailers, department stores, chain stores and voluntary chains, supermarkets, planned shopping centers, discount houses, mail order companies, house-to-house selling organizations, and vending machine operations.THE RETAIL PARTICIPANT GROUPS INA RETAILER'S ENVIRONMENT Staff ‘The majority of interactions between staff and customers have unti recently required at least & ‘one physical exchange of communication in the presence of both parties Shareholders Persons owning shares in a retailer require information on the operation and strategy of, the organization to be able to monitor the investments. Suppliers, Partners and Dealers Operation of retail activities is not done in isolation, Retailers require business suppliers and stakeholders to provide merchandise Suppliers Community Composed not only of Current and prospective shoppers but also individuals and groups that will exert infiuence upon others who will in turn determine the operating environment of the retailer. S88 @CATEGORIZING E-RETAILING BUSINESS MODELS For the e-retailer to integrate the needs of the five retail participant groups. adapt to the merchandise mix offered and still meet the business objectives, the e-retailer may select from a variety of business models,DISTRIBUTION CHANNELS The logistics for the retailer and prospective customer to establish contact and achieve an exchange for merchandise for payment have not always required a physical store. Virtual Retailer The introduction of commerce on the World Wide Web gave rise to the development of a new retailing form, the pure Web-based retailer, also known as a ‘virtual retailer’ or ‘pureplay e-retailer. CA! eo Bricks and Mortal Retailer A significant difference between the virtual retailer and the bricks and CL < mortar retailer is the ability of the prospective bricks and mortar retail <> customer to physically inspect store merchandise before making a purchase c “] and exiting the store. Direct Retailers Have utilized a variety of distribution methods to provide a retail space for the customer. Categorising Hybrid Retailers Marketers today are not restricted to just bricks and mortar, direct and virtual categories or retailing.3 Hybrid forms of Retailing pe eS TE te uC Catalogue Retailer Ger aceon BO eee eee ta Eire fener nee Gan ROSE Sar eae Internet has provided a logical Sree el) Petia) Cerone Rac a toto testtietec toto et asa tateecne) emetic cree eat eaneste Pee ad without replacing or alienating J inciudo re eesti parece iadREVENUE STREAMS Customer-centered e-retailing business models are often categorized by the revenue stream achieved by the online retailer.4 Revenue Business Models Advert ing-based e-retailing The retailer generates revenues by selling advertising space on their website. As one of the original revenue models of the Internet, portals such as Yahoo! Merchandise Sales e-retailing ‘As with the traditional bricks and mortar retailer, this revenue business model produces revenue from the sale of the Retailer's merchandise over the Web, e.g, Sanity (www.sanity,com.au) selling recorded music. 6¢@ e@ Transaction fee e-retailing Similar to the concept of brokerage, retailers may charge a third party for the marketing of merchandise to the retailer's customers. Subscription e-retailing ‘An adaption of direct marketing, the subscription-based e retailing revenue model allows consumers to access merchandise facilities, usually in a igital form, and through a subscription, e.g. the New York Times (nytimes.com) for Web-based archival news stories.ASSESSMENT OF THE FIT BETWEEN ORGANIZATIONAL OBJECTIVES AND THE BUSINESS MODELS In sleeting the business model suited to a retail operation, the retailer will initially assess their marketing and sales objectives for the three principal retail channels: bricks and mortar, direct Retailers and virtual retailers.1. Scoring the Retailer's objectives for Customers The potential for a retail channel to meet the individual objectives for customers is assessed on a scale of | to 5. A retail channel with little potential to meet an objective scores | increasing to 5 for a retail channel with a high potential to meet the customer objectives. Globalisation created by the Internet means that many retail names formerly restricted to domestic markets have become internationally recognized brands. Direct retailers have utilized the well-established international postal and courier systems for decades. Ma2. Scoring the Retailer's Objectives for Staff The potential for a retail channel to meet the Retailer's objectives for staff is assessed on a scale of 1 to 5. A retail channel with little potential scores 1, increasing to 5 for a retail channel with a high potential to meet the individual staff objectives. Staff must be prepared to provide the finest service possible within th constraints and advantages of that channel.3. Scoring the Retailer's Objectives for Shareholders The potential for a retail channel to meet the Retailer's objectives for shareholder is assessed on a scale of 1 to 5. A retail channel with little potential scores 1 increasing to 5 for a retail channel with a high potential to meet the individual shareholder objectives. Not all shareholders will be retail customers and therefore exposed to the marketing communications provided by both bricks and mortar and direct retailers.4. Scoring the Retailer's for Suppliers, Partners and Dealers The potential for a retail channel to meet the retailer's objectives for suppliers, partners and dealers is assessed on a scale of 1 to 5. A retail channel with little potential scores 1, increasing to 5 for a retail channel with a high potential to meet the individual supplier, partner and dealer objectives. Synchronizing data records between the retailer and their suppliers, partners and dealers is essential to avoid such errors as: @ Missed or duplication of orders @ Misdirected correspondence to personnel or addresses that have changed 4llill @ Non-compliance with legislation (e.g. government reporting schedules) @ Missed targets (e.g. end of month summaries or sale dates).5. Scoring the Retailer's Objectives for the Community The potential for a retail channel to meet the stated retailer's objectives for the community is assessed on a scale of Ito 5. A retail channel with the little potential scores |, increasing to 5 for a retail channel with a high potential to meet the individual community objectives. In communication to community, the virtual retailers have an interactive advantage over the other two retail channels. Helping to communicate these messages through the website and achieving a score of 15/15, the retailer may include any of these online facilities: @ Hyperlinks to relevant websites @ Live footage (webcam streaming video) @ Storage of printable documents (e.g. Adobe Acrobat formt) @ Interactive games @ E-mail exchangesThank You