1 Retailing All the activities directly related to the sale of goods and services to the ultimate consumer for personal, non- business use.

2 The Role of Retailing U.S. retailers employ more than 15 million people Retailers account for 10.8 percent of U.S. employment Retailing accounts for 10 percent of U.S. businesses Most retailers are quite small The industry is dominated by a few giant organizations, such as Walmart

Assort- ment Price Gross Margin Broad Narrow Broad Med-Narrow Medium Med-Broad Broad Med-Narrow Narrow Mod-High Moderate Mod High Moderate Mod Low Mod Lo-low Low-very low Low Low-High Mod High High Low Mod High Low Mod Low Low Low-High Type of Retailer Specialty Store Supermarket Convenience Store Drugstore Full-line Discounter Specialty Discounter Warehouse Clubs Off-price Retailer Restaurant Service Level Mod Hi-High High Low Low-Mod Mod-Low Low Low-High Department Store Broad Medium Mod-High Moderate Mod High Low Supermarket Drugstore Mod Hi-High Low Low-Mod Department Store Types of Stores and Their Characteristics

Major Types of Nonstore Retail Operations 4 Automatic Vending Entails the use of machines to offer goods for sale—for example, the soft drink, candy, or snack vending machines found in college cafeterias and office buildings. Self-service technologies comprise a form of automatic vending where services are the primary focus. Direct Retailing Direct retailing representatives sell products door-to-door, in offices, or at in-home sales parties.

Major Types of Nonstore Retail Operations 5 Direct Marketing Includes techniques used to elicit purchases from consumers’ homes, offices, and other convenient locations. Telemarketing, direct mail, and shop- at-home television networks are forms of direct marketing. Online Retailing Online retailing allows customers to shop over the Internet.

6 Defining a Target Market Step 1: Segment the Market Step 1: Segment the Market Demographics Geographics Psychographics

7 Choosing the Retailing Mix Step 2: Choose the Retailing Mix Step 2: Choose the Retailing Mix Product Promotion Place Price Presentation Personnel

8 Choosing the Retailing Mix Product Offering The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix. Developing a product offering is essentially a question of the width and depth of the product assortment. – Width refers to the assortment of products offered – Depth refers to the number of different brands offered within each assortment.

9 Retail Promotion Strategy The goal of retail promotion strategy is to position the store in consumers’ minds. Ads, special events, promotions, even grand openings are an orchestrated blend of advertising. Retailers’ advertising is carried out mostly at the local level Provides store information, such as location, merchandise, hours, prices, and sales National retail advertising focuses on image.

10 Place The axiom “location, location, location” has long emphasized the importance of place to the retail mix. Large commitment of resources that reduces future flexibility, and the location will affect the store’s future growth and profitability. Factors to consider in site selection: Area’s economic growth potential Amount of competition Geography

The Proper Location Land costs Zoning Regulations Public Transportation Lifestyle Center 11 Socioeconomic characteristics Traffic flows Choosing a Specific Site Choosing the Type of Site Freestanding Store Shopping Center

12 Retail Prices Quality Image High Price Low Price Good Value Single Price Point

13 Presentation of the Retail Store Employee type and density Employee type and density An employee’s general characteristics such as friendly and knowledgeable, and the number of employees in the selling space. Merchandise type and density Merchandise type and density The type of merchandise carried (best brands) and how it is displayed (neat uncluttered, crowded). Fixture type and density Fixture type and density Elegant, trendy, uncluttered. Fixtures should be consistent with the general atmosphere.

14 Presentation of the Retail Store Sound Odors Visual factors Sound can be pleasant or unpleasant for a customer. Smell can either stimulate or detract from sales. Colors can create a mood or focus attention.

15 Personnel Suggestion Selling Trading Up Two Common Selling Techniques

Channel and Retailing Decisions for Services All retailers inevitably disappoint a subset of their customers. The best retailers have plans in place to recover from lapses in service. Actions that might be taken include: Notifying customers in advance of stockouts Implementing liberal return policies Issuing product recalls in conjunction with promotional offers © 2016 Cengage Learning. All Rights Reserved. 16

Future Developments in Retail Management Retail Channel Omnification The reduction of multiple retail channel systems into a single, unified system for the purpose of creating efficiencies or saving costs. Click-and-Collect The practice of buying something online and then traveling to a physical store location to take delivery of the merchandise. 17

Explain the importance of the retailer within the channel and the U.S. economy List and understand the different types of retailers Explain why nonstore retailing is on the rise and list the advantages of its different forms LEARNING OUTCOMES

Discuss the different retail operations models and understand why they vary in strategy and format Explain how retail marketing strategies are developed and executed Discuss how services retailing differs from goods retailing 19 LEARNING OUTCOMES

Understand how retailers address product/service failures and discuss the opportunities that service failures provide Summarize current trends related to customer data, analytics, and technology Define the key terms listed in chapter prep 20 LEARNING OUTCOMES