Chapter 2 Types of Retailers

Variety and Assortment Variety is the number of merchandise categories a retailer offers. (“Breadth of merchandise”) Assortment is the number of different items in a merchandise category (“Depth of Merchandise”)

SKU Each different item of merchandise is called an SKU (stockkeeping unit)

Services Offered by Retailers displaying merchandise accepting credit cards parking convenient hours home delivery gift wrap selection assistance warranties

Food Retailers Conventional Supermarket Limited Assortment Supermarket Supercenter Warehouse Club Convenience Store

Conventional Supermarket a self-service food store offering groceries, meat and produce with limited sale of non-food items about 30,000 SKUs

Limited-Assortment Supermarkets Only about 1250 SKUs Only 1-2 brands and sizes 40-60% lower prices

Supercenters a supermarket combined with a full-line discount store 100,000-150,000 SKUs

Warehouse Clubs offer a limited and irregular assortment of food and general merchandise with little service at low prices

Convenience Stores provide a limited variety and assortment of merchandise 2000-3000 SKUs

General Merchandise Retailers Department Stores Full-Line Discount Stores Specialty Stores Drugstores Category Specialists (and Category Killers) Extreme Value Retailers Off-Price Retailers (Outlet Stores/Factory Outlets) El

Department Stores Retailers that carry a broad variety and deep assortment offer customer service organize their stores into distinct departments

Full-Line Discount Stores retailers that offer a broad variety of merchandise, limited service and low prices

Specialty Stores concentrate on a limited number of complementary merchandise categories provide a high level of service in relatively small stores deep but narrow assortments and sales associate expertise

Drugstore specialty stores that concentrate on health and personal grooming merchandise

Category Specialists big box discount stores that offer a narrow but deep assortment of merchandise can be ‘category killers’

Extreme Value retailers small, full-line discount stores (Dollar Tree)

Off-Price Retailers an inconsistent assortment of brand name merchandise at low prices close outs/irregulars outlets stores/factory outlets

Non-store Retailing Electronic Retailing Catalog Retailing Direct mail Retailers Direct Selling Television Home Shopping Vending Machine Retailing

Electronic Retailing Electronic Retailing (online) is a retailing format in which the retailers communicate with customers and offer products and services for sale over the internet.

Catalogue Retailing the retail offering is communicated to a customer through a catalogue

Direct-Mail Retailers communicate to customers using letters and brochures

Direct selling Independent salespeople contact customers directly in a convenient location, demonstrate merchandise benefits, take orders, deliver the merchandise or perform the service Party-plan system - salespeople encourage customers to act as hosts and invite friends and coworkers Multilevel network - people serve as master distributers, recruiting other people to become distributers of their network

Television Home Shopping a retail format in which customers watch a television program that demonstrates merchandise and place orders - usually by telephone 3 Types - dedicated cable channels, infomercials and direct response advertising

Vending machine retailing merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card

Service Retailers Firms that primarily sell services rather than merchandise. Services are generally intangible Services have simultaneous production and consumption (service providers create and deliver the service as the consumer is using/consuming it) Services are perishable or time-sensitive Services can be inconsistent

Types of Ownership Independent, Single-Store Establishments Corporate Retail Chains Franchises