Chapter 13: Retailing

Retailing  retailing involves the sale of products and services to end consumers for their personal non-business use  not all sales by retailers are retail sales. why?  similarly, not all retailing is done by retailers  most of the retailers of Canada are very small  there is considerable concentration in retailing, accounted for by the large chains  many small retailers join contractual vertical marketing systems to increase their competitiveness

Figure 13-1 Total Retail Trade in Canada, Selected Years

Physical Facilities of Retailers  most retailers operate from stores, although more now engage in nonstore retailing  those that operate stores must consider where to locate their stores, how to design them, and what physical layout to use  much retailing in Canada is concentrated in shopping centres which range in size from small neighbourhood convenience centres to very large regional centres

Forms of Retailing  most retailers are independents  corporate chains are centrally owned and managed which means that individual stores have relatively little autonomy  chains can generally offer their customers lower prices because of a lower cost structure  they spread their risk and exposure over a larger number of stores; they can experiment and gain economies of scale in advertising  however, they tend to be quite standardized

Franchising and Other VMS  retail co-operatives and voluntary chains offer retailers increased buying power and the benefits of management and marketing support  product and trade name franchising allows a retailer to use the franchisor’s trade name for promotional purposes; focus is on what is sold  in business format franchising, a firm with a track record sells the right to operate identical businesses; focus is on how the business is run

Major Types of Retailers  department stores offer a wide variety of mechandise and services and don’t compete on the basis of price; they are facing intense competition and high operating costs  discount houses are large-scale chain retailers that offer a wide range of products but less depth; they offer low prices and fewer services and have succeeded in keeping costs low through use of technology

Limited-line Retailers  limited-line retailers offer customers less selection, but great depth within their lines  specialty stores carry a very narrow product line, usually specializing in a single category  off-price retailers offer a deep assortment in a narrow line, low prices, and few services; these include factory outlets  category-killer stores offer a very wide variety and low prices; dominate the category

Other Forms of Retailing  many of the established retailers are moving toward new forms of distribution, including telephone and Internet shopping  supermarket retailing has extended with the opening of superstores and combination stores  convenience stores are open 24 hours  warehouse club chains have made a major entry into Canada in recent years; they offer a wide breadth of products, but little depth

Nonstore Retailing  there has been considerable growth in nonstore retailing with advancing technology and changing consumer shopping preferences  direct selling avoids using intermediaries  telemarketing uses sales people on the phone to sell products and services  direct marketing uses catalogues, direct mail, television shopping, and the Internet  many products and services are now sold through vending machines

Online Retailing  more and more companies are selling directly to consumers over the Internet  those that operate only online have struggled to become profitable; those that also have a physical stores are more likely successful  shopping-cart abandonment is high; challenge to turn browsers into buyers

Retailing Management  in a competitive market, positioning of retailers is a challenge  in many retail operations, managing through seasonal and fashion cycles is necessary  through technology, retailers will have access to considerable volumes of information; improved productivity will be one result  retailers will place greater emphasis on convenience, customer service, and customer retention

Figure 13-2 Fashion-Adoption Processes