THE NATURE OF RETAILING Presented by J.Manyeruke

Outline the significance of retailers in the distribution channel By the end of the presentation you should be able to: define retailing. Outline the significance of retailers in the distribution channel Justify the relevance of Retailers in the Economy. Illustrate retail challenge.

DEFINITIONS RETAILING is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. (Levy and Weitz, 2009) RETAILER is a business which sells goods and services to consumers for their personal or family use. A retailer is the final business in a Distribution Channel that links manufacturers to consumers.

Manufacturers make products and sell them to retailers or Wholesalers Manufacturers make products and sell them to retailers or Wholesalers . Wholesalers buy products from manufacturers & resell these products to retailers while retailers resell them to consumers. Manufacturer Wholesaler Retailer Final Consumer

Functions performed by Retailers 1.PROVIDING AN ASSORTMENT OF GOODS AND SERVICES (closing the assortment gap) To maximise efficiency , many manufacturers would like make one basic type of item & sell the entire inventory to as few buyers as possible, yet many final consumers want to choose from a variety of goods & services & purchase a limited quantity. Retailers collect an assortment of goods & services from various sources , buy them in large quantities & offer to sell them in small quantities to consumers. This is the sorting process’ As a result , each manufacturer or wholesaler become more efficient , and final consumers are pleased with the selection available to them. This enables buyers to do one stop shopping & also exercise choice from a variety of goods available.

The retailer’s role in the sorting process Retail Outlet will have Manufacturer Brand A brand A Wholesaler X Brand B brand B Brand C brand C Wholesaler Y Brand D brand D Brand E Brand E Wholesaler Z Brand F Brand F

2.Bulk Breaking ( Closing the quantity gap) To reduce transportation costs, manufacturers & wholesalers typically ship cases of goods to retailers. Retailers then offer the products in small quantities tailored to individual consumers’ & household consumption patterns. This is called breaking bulk.

3.Inventory Holding ( Closing the storage gap) - Retailers keep inventory so that products will be available when consumers want them, & thus consumers can keep as much smaller inventory of products at home because they know the retailers will have the products available when they need more. By maintaining an inventory , retailers provide a benefit to consumers by reducing the cost of storing products. Consumers can thus use their monies for Investment purposes instead of holding inventory.

4. Providing Services Retailers provide services that make it easier for customers to buy and use products. They offer credit to consumers. Also, they provide additional information about products to consumers. Retailers provide customer services such as gift wrapping, delivery, & installation.

5.Retailers also assist small wholesalers & manufacturers Retailers assist small wholesalers and manufacturers by: transporting merchandise storing marking advertising Pre-paying for merchandise

6. Communication (Closing the communication gap) Retailers also have a function of communication both with their manufactures & wholesalers . Communication with customers is enhanced via advertisements , salespeople & store displays, where consumers are informed about the availability and characteristics of goods & services , store hours , sales & so on. Manufacturers , Wholesalers & others are informed about: a) sales forecasts b) delivery delays to retailers c) Customer complaints

d) Defective items e) Inventory turnover ( By style, colour , size) Many goods & services have been modified due to feedback to suppliers

Economic significance of Retailers Employment-A substantial population of any country is employed in the retail industry. Retailing raises the standards of living of people through the sorting process. The sorting process increases variety so that consumers can enjoy from a wider choice of products.

Retail activities contributes to Gross Domestic Product Retail activities contributes to Gross Domestic Product. Gross domestic product is the total market value of all goods and services produced in a country in a given year. They contribute to Government revenue by paying taxes. Such taxes include Value Added taxes, Pay As You Earn (PAYE),& Corporate tax. Government Revenue is important for Economic Development.

Retailers help in the regeneration of towns , districts & regions.

THE PROBLEM OF RETAILING Must balance ability of the firm’s merchandising programs to meet the needs of targeted consumers With ability of the firm’s administrative plans to meet the retailer’s need to operate effectively and efficiently

THE RETAIL CHALLENGE IS TO OFFER THE RIGHT MERCHANDISING BLEND the right product in the right quantities in the right place at the right time at the right price by the right appeal with the right service

QUOTE FROM SAM WALTON FOUNDER OF WALMART “For my whole retail career, I have stuck to one guiding principle…give your customers what they want, and customers want everything: a wide assortment of good quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience. You love it when you visit a store that somehow exceeds your expectations, and you hate it when a store inconveniences you, or gives you a hard time, or just pretends you’re invisible.”

MAY GOD BLESS YOU ALL