Principles of Marketing - UNBSJ BA 2303 Principles of Marketing - UNBSJ Retailing Instructor – Terry Conrod

Learning Objectives BA 2303 Explain the alternative ways to classify retail outlets. Describe the many methods of non-store retailing. Classify retailers in terms of the retail positioning matrix. Develop retailing mix strategies over the life cycle of a retail store. Identify the challenges Canadian retailers face as they pursue sustainable growth.

THE VALUE AND SCOPE OF RETAILING BA 2303 THE VALUE AND SCOPE OF RETAILING Classifying Retail Outlets Form of ownership Level of service Merchandise line 3

THE VALUE OF RETAILING Form of Ownership BA 2303 Independent Retailer Corporate Chain Contractual System 4

The top five franchises in North America BA 2303 The top five franchises in North America 5

THE VALUE OF RETAILING Level of Service BA 2303 Self-Service Limited Service Full-Service 6

THE VALUE OF RETAILING Merchandise Line BA 2303 Depth of Line Breadth of Line Scrambled merchandising Hypermarket Intertype competition 7

Breadth versus depth of merchandise lines BA 2303 Breadth versus depth of merchandise lines 8

BA 2303 Concept Check Centralized decision making and purchasing are an advantage of __________________ ownership. corporate chain 9

What are some examples of new forms of self-service retailers? BA 2303 Concept Check What are some examples of new forms of self-service retailers? Answer: Some new forms of self-service retailers include airlines’ use of self-service kiosks to check in and print boarding passes. Home building supply operations also use this approach. 10

BA 2303 Concept Check Would a shop for big men’s clothes carrying pants in sizes 40 to 60 have a broad or deep product line? Answer: A shop for big men's clothes would have a deep product line because they carry a considerable assortment (or depth) of a related line of items. 11

Forms of non-store retailing BA 2303 Forms of non-store retailing 12

NON-STORE RETAILING BA 2303 Automatic Vending Direct Mail and Catalogues Television Home Shopping Online Retailing Telemarketing Direct Selling 13

Concept Check specialty BA 2303 Concept Check Successful catalogue retailers often send ________ catalogues to _____ markets identified in their databases. specialty niche 14

BA 2303 Concept Check How are retailers increasing consumer interest and involvement in online retailing? Answer: Retailers are increasing consumer interest and involvement in online retailing in several ways. Consumers can: (1) Pay dues to become a member of an online discount service, (2) Use a shopping "bot", (3) Go directly to online malls or online shopping directories, or (4) Go to a specific online retailer's individual site 15

Where are direct selling retail sales growing? Why? BA 2303 Concept Check Where are direct selling retail sales growing? Why? Answer: Direct selling retail sales is growing in countries outside North America. It will continue to grow in markets where door-to-door convenience is important and personalized service is needed. 16

RETAILING STRATEGY Positioning a Retail Store BA 2303 Retail Positioning Matrix Keys to Positioning 17

Retail positioning matrix BA 2303 Retail positioning matrix 18 © 2008 McGraw-Hill Ryerson Ltd. All rights reserved.

Elements of a retailing strategy BA 2303 Elements of a retailing strategy 19

RETAILING STRATEGY Retailing Mix BA 2303 Retail Pricing Store Location Shrinkage Off-price retailing Store Location Central business district Regional shopping centres Community shopping centre Strip location Power centre 20

RETAILING STRATEGY Retailing Mix (cont.) BA 2303 Retail Communication Merchandise Category management 21

What are the two dimensions of the retail positioning matrix? BA 2303 Concept Check What are the two dimensions of the retail positioning matrix? Answer: The two dimensions of the retail positioning matrix are: (1) breadth of product line and (2) value added 22

How does original markup differ from maintained markup? BA 2303 Concept Check How does original markup differ from maintained markup? Answer: Original markup is the difference between retailer cost and initial selling price. Maintained markup is the difference between the final selling price and retailer cost; also called gross margin. 23

A huge shopping strip with multiple anchor stores is a ______ centre. BA 2303 Concept Check A huge shopping strip with multiple anchor stores is a ______ centre. power 24

© 2008 McGraw-Hill Ryerson Ltd. All rights reserved. BA 2303 The Wheel of Retailing 25 © 2008 McGraw-Hill Ryerson Ltd. All rights reserved.

© 2008 McGraw-Hill Ryerson Ltd. All rights reserved. BA 2303 The retail life cycle 26 © 2008 McGraw-Hill Ryerson Ltd. All rights reserved.

CHALLENGES CANADIAN RETAILERS FACE AS THEY PURSUE SUSTAINABLE GROWTH BA 2303 CHALLENGES CANADIAN RETAILERS FACE AS THEY PURSUE SUSTAINABLE GROWTH Use of Integrated Multichannel Retailing Embracing Technology and Using it Wisely Better Understanding of the Complex Canadian Shopper Demonstrating Corporate Social Responsibility and Going Green Providing a Satisfying Customer Experience Effective Use of Human Capital 27

Usually, such firms enter as low-status, low-margin operations. BA 2303 Concept Check According to the wheel of retailing, when a new retail form appears, how would you characterize its image? Answer: Usually, such firms enter as low-status, low-margin operations. 28

BA 2303 Concept Check Market share is usually fought out before the ________ stage of the retail life cycle. maturity 29

Concept Check What is a smart card? Answer: BA 2303 Concept Check What is a smart card? Answer: Smart cards look like credit cards but store information on computer chips instead of magnetic strips. 30

BA 2303 Retailing All activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use.

BA 2303 Form of Ownership Distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet.

BA 2303 Level of Service The degree of service provided to the customer by self-, limited-, and full-service retailers.

BA 2303 Merchandise Line How many different lines a merchant carries and in what assortment.

BA 2303 Depth of Product Line The store carries a large assortment of each item.

Breadth of Product Line BA 2303 Breadth of Product Line The variety of different items a store carries.

Scrambled Merchandising BA 2303 Scrambled Merchandising Offering several unrelated product lines in a single retail store.

BA 2303 Hypermarket A large store (over 200,000 sq. ft.) offering a mix of 40% food products and 60% general merchandise.

Intertype Competition BA 2303 Intertype Competition Competition between very dissimilar types of retail competitors.

BA 2303 Telemarketing Using the telephone to interact with and sell directly to customers.

Retail Positioning Matrix BA 2303 Retail Positioning Matrix Positions retail outlets on two dimensions: breadth of product line and value added.

BA 2303 Retailing Mix In retailing strategy, the (1) goods and services, (2) physical distribution, and (3) communications tactics chose by a store.

BA 2303 Shrinkage Breakage and theft of merchandise by customers and employees.

BA 2303 Off-Price Retailing Selling brand-name merchandise at lower than regular prices.

Central Business District BA 2303 BA 2303 Central Business District The oldest retail setting, the community’s downtown area.

Regional Shopping Centres BA 2303 Regional Shopping Centres Consists of 50 to 150 stores that typically attract customers who live within a 5- to 10- mile range, often containing two or three anchor stores.

Community Shopping Centre BA 2303 Community Shopping Centre A retail location that typically has one primary store (usually a department store branch) and 20 to 40 smaller outlets, serving a population of consumers who are within a 10- to 20- minute drive.

BA 2303 Strip Location A cluster of stores serving people who live within a 5- to 10- minute drive.

BA 2303 Power Centre A huge shopping strip with multiple anchor (or national stores), a convenient location, and a supermarket.

BA 2303 Retail Life Cycle The process of growth and decline that retail outlets, like products, experience.

BA 2303 Wheel of Retailing A concept that describes how new retail outlets enter the market as low-status, low-margin stores, and gradually add embellishments that raise their prices, and status. They now face a new low-status, low- margin operator and the cycle starts to repeat itself.

BA 2303 Category Management An approach that assigns a manager with the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category.

BA 2303 Lifestyle Centre An open-air cluster of specialty retailers, along with theatres, restaurants, fountains, play areas, and green spaces.

Integrated Multichannel Retailing BA 2303 Integrated Multichannel Retailing Utilizing a seamless combination of traditional store formats and nonstore formats, such as catalogues, television, electronic kiosks, and online retailing.