5th Edition

Introduction to the World of Retailing Chapter 1 Introduction to the World of Retailing McGraw-Hill/Irwin Levy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

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.

Examples of Retailers Retailers: -Sears, Holiday Inn, McDonalds, Amazon.com, Jiffy Lube, AMC Theaters, American Eagle Outfitter, FAO Schwartz, Kroger Firms that are retailers and wholesalers that sell to other business as well as consumers: -Office Depot, The Home Depot, United Airlines, Bank of America, Sams Clubs

How Retailers Add Value Breaking Bulk -Buy it in quantities customers want Holding Inventory -Buy it at a convenient place when you want it Providing Assortment -Buy other products at the same time Offering Services -See it before you buy, get credit, layaway

How Retailers Add Value The value of the product and service increases as the retailer performs functions. Doll can be bought on credit or put on layaway Doll is featured on floor display Doll is offered in convenient locations in quantities of one Doll is developed in several styles Doll is developed at manufacturer

Manufacturer’s Perspective The Four P’s of Marketing Retailers are part of the distribution channel Retailers are part of the distribution channel Product Price Distribution Promotion

Distribution Channel

Retailers are a Business Like Manufacturers Finance Accounting Marketing Operations Human Resources MIS

Decision Variables for Retailers Customer Service Retail Strategy Store Design and Display Merchandise Assortment Pricing Location Communication Mix

Economic Significance of Retailing Over $2.5 trillion in annual U.S. sales -greater than medical care, housing, recreation combine Employs 17% of population -about the same as manufacturing and growing Management training opportunities Entrepreneurial opportunities

Nature of Retail Industry is Changing To Today’s Retailer Mom and Pop Store

Retailing is a High Tech Industry - Selling Merchandise over the Internet - Using Internet to manage supply chains - Analyze POS data to tailor assortments to stores - Computer systems for merchandise planning

Globalization of Retailing Source Merchandise From Around the World Wal-Mart Operates in U.S., China, Mexico, UK, Germany Carrefour has Stores in 25 Countries

Retail Environment Differs Across the Globe US Japan Concentration High Medium Store Size Big Small Role of Low High Wholesaling Efficiency High Low

JC Penney’s Strategic Evolution Main Street private label soft goods retailer Changes in environment -- increased disposable income, growth of suburbs, interstate highway program Emulate Sears in enclosed suburban malls Focus on soft goods -- drop automotive, sporting goods, hardware Develop catalog, develop electronic retailing Future (?)

Sears’ Strategic Evolution Large number of merchandise categories -- appliances, hardware, apparel Malls evolved into places for buying soft goods, hard goods sold at category killers The Softer Side of Sears Refocused on value -- Testing carts in stores Acquired Lands’ End Reviewed training program for new managers

Whole Foods Implementation Strategy - organic and natural foods supermarket chain Assortment beyond organic/natural foods Private labels - Whole Food™, 360 Day Value™ Love, trust, and employee empowerment Equality in compensation

Hot Topic’s Retail Mix Retail Strategy Customer Service Location Store Design And Display Merchandise Assortment Communication Mix Pricing

Hot Topic’s Retail Mix Location Strategy Enclosed malls Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design

Many Different Hot Band T-shirts and Accessories Hot Topic’s Retail Mix Assortment Strategy Location Pricing Communication Mix Store Design and Display Customer Service Many Different Hot Band T-shirts and Accessories

Store Design and Display Hot Topic’s Retail Mix Location Communication Mix Store Design and Display Customer Service Merchandise Assortment Pricing Strategy Modest with Sales

Hot Topic’s Retail Mix Communication Mix TV and Magazine Ads Store Design And Display Customer Service Location Merchandise Assortment Pricing Communication Mix TV and Magazine Ads

Heavy Metal, Gothic Look Hot Topic’s Retail Mix Store Design and Display Customer Service Location Merchandise Assortments Pricing Communication Mix Heavy Metal, Gothic Look

Hot Topic’s Retail Mix Customer Service Modest Location Merchandise Assortment Pricing Communication Mix Store Design and Display

Macy’s Retail Mix Retail Strategy Customer Service Location Store Design And Display Merchandise Assortment Pricing Communication Mix

Macy’s Retail Mix Location Strategy Enclosed Malls Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design

Many Items in Apparel and Soft Home Macy’s Retail Mix Assortment Strategy Location Pricing Communication Mix Store Design and Display Customer Service Many Items in Apparel and Soft Home

Moderate with Frequent Sales Macy’s Retail Mix Location Communication Mix Store Design and Display Customer Service Merchandise Assortment Pricing Strategy Moderate with Frequent Sales

TV, Newspaper Ads and Special Events Macy’s Retail Mix Store Design And Display Merchandise Assortment Pricing Customer Service Location Communication Mix TV, Newspaper Ads and Special Events

Merchandise Assortments Macy’s Retail Mix Store Design and Display Customer Service Location Merchandise Assortments Pricing Communication Mix Ring with Displays

Macy’s Retail Mix Customer Service Modest Location Merchandise Assortment Pricing Communication Mix Store Design and Display

Store Design And Display Merchandise Assortment Wal-Mart’s Retail Mix Customer Service Location Retail Strategy Store Design And Display Merchandise Assortment Communication Mix Pricing

Merchandise Assortment Wal-Mart’s Retail Mix Location Strategy Free-standing Stores Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design

Store Design and Display Wal-Mart’s Retail Mix Assortment Strategy Customer Service Location Large Number of Categories Few Items in Each Category Store Design and Display Communication Mix Pricing

Store Design and Display Wal-Mart’s Retail Mix Location Communication Mix Store Design and Display Customer Service Merchandise Assortment Pricing Strategy Low, EDLP

TV and Newspaper Insert Ads Wal-Mart’s Retail Mix Location Pricing Store Design and Display Customer Service Merchandise Assortment Communication Mix TV and Newspaper Insert Ads

Basic, Special Displays for Products Wal-Mart’s Retail Mix Store Design and Display Customer Service Location Merchandise Assortments Pricing Communication Mix Basic, Special Displays for Products

Merchandise Assortment Wal-Mart’s Retail Mix Customer Service Limited Location Merchandise Assortment Pricing Communication Mix Store Design and Display

Career Opportunities in Retailing Start Your Own Business List of Retail Entrepreneurs on Forbes 400 Richest Americans Walton Family (Wal-Mart) Fisher (The Gap) Wexner (Limited) Menard (Menard’s) Marcus, Blank (The Home Depot) Kellogg (Kohl’s) Schulze (Best Buy) Levine (Family Dollar) Gold (99Cent Only)

Misconceptions About Careers in Retailing Don’t need college Low pay Long hours Boring Dead-end job No benefits Everyone is part-time Unstable environment

Why You Should Consider Retailing Entry level management positions -Department manager or assistant buyer/planner -Manage and have P&L responsibility on your first job Starting pay average with great benefits - Some retailers pay graduate school No two days are alike Buying for financially oriented people Management for people people

Types of Jobs in Retailing Most entry level jobs are in store management or buying, but… retailers also have staff specialists: --accounting and finance --real estate --human resource management --supply chain management --advertising --public affairs

Centro de Comercio Detallsita www.gda.itesm.mx/ccd ADMINISTRACIÓN DE MERCANCÍAS / PRECIOS: Aprenderás el manejo de compras, resurtidos e inventarios que realizan las empresas de comercio al detalle. Analizarás la tecnología que está revolucionando el retail y estudiarás la administración y el establecimiento de precios, así como el desarrollo y presentación de líneas de producto, dando especial atención a las relaciones comprador-proveedor.  INTERNSHIP I Y II: Aplicarás tus conocimientos dentro de una empresa detallista. en el verano trabajarás 7hrs. diarias por 5 semanas en una empresa de comercio al detalle, en donde conocerás las diferentes áreas de la empresa y tendrás la oportunidad de resolver algún problema o realizar un proyecto específico.   ADMINISTRACIÓN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizarás los procesos en el manejo y administración de una tienda. Aprenderás temas relacionados con sistemas de información, recursos humanos, imagen y diseño de la tienda (visual merchandising), servicio al cliente y CRM (Customer Relationship Management), entre otros.   ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocerás las estrategias que siguen los principales detallistas y su implicación en las ventas. Comprenderás la metodología para la ubicación de puntos de venta. Aplicarás las estrategias de publicidad y promoción que se utilizan en el comercio detallista. Además, aprenderás la nueva tendencia en el retail de administración por categorías.