1. Chapter 1 Key Terms Brick-and-mortar Closeout stores Commercial cue
Comparison shopper
Convenience stores
Corporate chain
Demographics
Department stores
Direct selling
Discount stores
Distribution channel
Diverse shopper
E-commerce
Follower
Franchises
Gross Domestic Product
Impulse buyer
Independent establishment
Innovative customer
Manufacturer
Multichannel
Off-price retailers
Omni channel
Outlet stores
Physical cue
Recreational shopper
Retailer
Retailing
Social Cue
Specialty stores
Stimulus
Supercenters
Supermarkets
Target market
Wholesale clubs
wholesaler

2. Retail Industry Overview
Chapter 1

3. Defining Retail
Chapter 1.1

4. What is Retailing?
Retail is defined as a business that sells products and/or services to customers.
Customers go to retailers to purchase everything from clothes and food, to hair care services or a bus ticket.
Consumers acquire products in stores, online, or even door-to-door.
No matter what format it takes, retailing is the method by which consumers acquire products and services.

5. The Distribution Channel
Retailers sell products and services to consumers.
In order to provide these products, retailers are a link in the channel of distribution, which enables products flow from the manufacturer to the customer or end user.

6. Manufacturer
Produces the product
Wholesaler
Buys large quantities of products directly from the manufacturer, breaks the into smaller units, and sells the smaller units to retailers
Retailer
Receives, stores, displays, and sells the products to customers

7. The retailer receives, stores, displays and sells the products to customers.
Selects
Based on the needs of its particular community, store, or location
Keeps
Products in good condition, displays the merchandise
Shows
Customers how to use the goods
Provides
Added services such as wrapping, delivery, installation, credit, and guarantees

8. Channels of Distribution may vary depending on the types pf products carried in the store.
Large department stores may send their buyers directly to manufacturers to procure goods
Walmart has firms that manufactures goods especially for their stores (generic).
Thus, the function of the retailer is to provide its customers with the merchandise they want- when, where, and how they want it.

9. Exercise 1: How Many Retailers Can You Name?
On a sheet of loose leaf.
Take three minutes and list as many retailers as you can think of. (Minimum of 10)
Now group those retailers into categories on the types of products they sell.
How many categories did you come up with.

10. Diversity of the Industry
Retail comes in a variety of formats.
Question: Where do you shop? In store, online, or via mobile device?

11. Convenience Stores
True to their name, these stores aim to provide their customers a convenient shopping experience.
These general merchandise stores are easy accessible and small in size, with quick shopping and easy checkout.
Examples
QuickTrip, 7-Eleven, Kangaroo, On the Run

12. Department Stores These are classified as general merchandisers.
They offer good services and a broad variety and assortment of products of mid-to-high quality.
Examples
Macy’s, Nordstrom, Bloomindales, Sears, Kohl’s

13. Direct Selling
With direct selling, salespeople contact directly in a convenient location, often at a customers home.
Demonstrates products benefits, take orders, and deliver the products or perform the services
Examples
Amway, Mary Kay, Avon, Pampered Chef

14. Discount Stores
These retailers offer a broad variety of merchandise, limited service, and low prices.
Examples
Target, Walmart

15. Off-price Retailers
These retailers offer brand-name merchandise at a discount.
The merchandise typically consists of excess inventory, closeouts, and irregulars.
Many of these types of retailers have been slower to develop a strong online presence due to the inconsistent nature of their inventory.
Off-price retailers fall into two categories:

16. Closeout Stores Outlet Stores
These stores offer an assortment of brand-name merchandise at a significant discount off the manufacturer's price.
They buy from manufacturers and retailers at toughly ¼ the original prices (Marshalls, T.J. Maxx)
Outlet Stores
Outlets are off-price stores owned by the manufacturer or retailer (Nike Outlet, Nordstrom Rack)

17. Pure Play
These retailers started online and continue to do all of their business that way.
Examples
Amazon, eBay, Zappos

18. Specialty Stores
This segment focuses on deep, but narrow assortments with a high level of customer services. Though they are evolving to encompass many aspects of convenience stores, pharmacies fall into the specialty store category.
Examples
Walgreens, Sephora, Ethan Allen

19. Supercenters
These stores typically combine a supermarket and a department store, resulting in a gigantic retail facility that carries an enormous range of products, from apparel to groceries to automotive supplies, all under one roof.
Examples
Super Target, Walmart Supercenter, Fred Meyer

20. Supermarket
These stores sell a wide variety of goods including food, alcohol, and medicine.
Examples
Kroger, Publix, Albertson’s

21. Thrift Stores
These stores sell secondhand clothes and other household goods, typically to raise funds for a charitable institution.
The good are normally donated by individuals and businesses rather than purchased from a wholesaler or manufacturer.
Examples
Goodwill, Salvation Army, Savers

22. Wholesale Clubs
Some wholesalers started selling products directly to consumers.
This places them in the unique role of both wholesaler and retailer.
Examples
BJ’s, Costco, Sam’s Club

23. Activity 2: How Many Retailers Can You Name? (Part II)
Look back at your list of categories from Activity I. Was there one type of retailer that you focused on more than others? Were there any that you missed altogether? Now that you have the definitions of retail formats, as well as examples, try the exercise again.
Take two minutes and list as many retailers as you can. Try to make sure that you include at least one retailer from each category.

24. Type of Ownership Independent Establishment
Typically a single store or a small, regional chain.
These retailers are often able to tailor their offerings to meet demand of the local consumers.
95% of retail companies have just one location

25. Corporate Chains Franchises
A company that operates multiple stores under common ownership and usually has centralized decision-making.
These companies are generally more capable of negotiating lower prices from wholesalers and manufacturers given their size
Franchises
The license granted to another party to market a company’s goods or services in a particular territory (KFC, Pizza Hut, Midas, 7-Eleven)

26. Retail Channels
It is important to understand the variety of shopping options modern customers have.
Whether they’re shopping in the store or online, customers will find themselves in need of help.
Customer service and sales jobs are evolving to meet those needs.

27. Brick-and-Mortar
The presence of a physical storefront and face-to-face customer experience
E-Commerce
Buying and selling through the internet via an electronic device such as computer, smart phone, or tablet
Multichannel
Offering customer transactions through multiple connected channels, including some of all of the following: brick-and-mortar stores, online store sites, mobile apps, and telephone.

28. Omnichannel
Similar to multichannel retailing, with the focus on creating a seamless consumer experience through any and all shopping channels: mobile, tablet, computer, brick-and-mortar stores, television, radio, direct mail, and catalog

29. E-Commerce
In the mid-90’s, if you were shopping online (preferably using a dial-up modem), you would have found just a few places to make up a transaction.
Online-only shops, such as Amazon, eBay, or books.com, dominated the World Wide Web.
Despite the Dot-Com bubble burst, US retail e-commerce sales continued upward, increasing from $15 Billion in 1999 to $27 Billion in sales in 2000.
By 2002, retail e-commerce sales were still on the rise- up to $44 Billion.

30. Today in the US, e-commerce is a $260 Billion industry.
As more retailers open online, e-commerce will only continue to account for a larger share of total revenue sales.
In fact, total online retail sales in 2017 are predicted to reach $370 Billion- up from $262 Billion in 2013.

31. Understand the Customer
Chapter 1.2

32. An entry-level position as a customer service associate will be where you start your career, but it might not be where you end up.
Retailers value and reward sales associates who provide excellent customer service.
The sales associate is the frontline representative of any retail business.
In this role, you will greet customers when they walk into the door, listen to their needs, present products to them, and ultimately ring up the sale and package their products for the trip out of the store.

33. In your role, you will accomplish much more than persuasive advertising, colorful packaging, or any other marketing technique can do- you will help the customers understand the products in your store and find out how the products can solve their problems or satisfy their needs.

34. No Two Customers are Alike
The reason there are so many different kinds of retail formats is that there are different kinds of retail costumers.
Understanding the various types of customers will allow you to personalize your service, which will lead to a better customer experience.

35. You probably know people who could represent each of the types of customers.
Start with yourself.
Here are a few questions to ask yourself to determine what kind of customer you are:
What kind of merchandise do you generally buy?
Do you shop for fun or only when you need something?
Do you prefer to shop alone or with friends or your spouse?
Do you research you purchase options ahead of time?
Do you follow retailers on social media?

36. Are you loyal to any brands or stores?
Are you the first to purchase new technology?
Has a television or radio ad ever influenced you to make an impulse purchase?
What role do sales promotions, coupons, and discounts play in your shopping decisions?

37. Types of Customers Innovative Customer
Always wanting to be the 1st to buy things
Comparison Shopper
Comparing prices through advertising or going from store to store
Impulse Buyer
A person who will make a quick purchase decision

38. Follower
A customer who will wait to see what the trend is
Diverse Shopper
The hardest to predict or understand. They shop in many different places and is not influenced by any one retail element
Recreational Shopper
Shopping for fun

39. Activity 3-What Kind of Customer are You?
Based on the definitions that we have gone through, what kind of customer are you? Are you a mix of more than one type?
Why is it important to understand the different types of customers?

40. Consumer Behavior: Why People Buy
A retailers ability to sell products and service to customers depends largely on understanding their needs, habits, and purchase behavior.
Select a specific target market, the need, desire, and ability to buy the product.
Demographics
Household size, income, education, occupation, and place of residence

41. Cues to Purchase Social Cue- “lets try it out”
Commercial Cue- the commercial is on your mind to try it out
Physical Cue- “I’ve been working for hours and I’m hungry”
After exposure to cue, the individual might be motivated to purchase

42. Five-Stage Decision-Making
Need Recognition
Information Search
Evaluation Alternatives
Purchase
Post-Purchase Evaluation

43. Need Recognition Information search
The customer’s recognition that some product of service may solve an identified problem or fulfill an identified need.
Example: fix an existing product or buy a new one
Information search
Determining which goods or services will help solve the identified problem and comparing the available alternatives.
Example: where to buy the product from

44. Evaluation of alternative
Having enough information to select from alternatives, the customer will mentally rank the alternatives based on established criteria and decide which product to buy.
Example: which one to get A or B
Purchase
Based on the choice of the best alternative, the customer now decides where to buy the selected product.
Such criteria as location, store image, customer service and pricing will figure into the decision.

45. Post purchase evaluation
After completing the purchase, the customer will review how they felt about the process.
If they were happy with the product and the retail experience, they are more likely to repeat the purchase behavior.
If not, the next time they need to make a purchase, they are likely to purchase from somewhere else.

46. Exercise 4: Customer Decision Making
Go to page 17 in your book.
Describe how the consumer decision process would operate for these goods and services.
Complete on a loose-leaf sheet of paper.

47. Retail Impacts Communities
Products and services directly affect the quality of consumers lifestyles.
It gives customers options, diversity, and instant relief.
When people start to purchase retail, the businesses have money to reinvest in the community
Sponsorships for youth teams, monetary and product donations, etc.

48. Case Study: Perishable Donations Partnership
Since 1998, Lynn Marmer has worked to raise the standard of giving among grocery retailers.
In 2008, she developed the Perishable Donations Partnership, which empowers associates to identify meat, produce, dairy, and bakery items that can no longer be sold, but remain safe, fresh, and nutritious complements to dry goods donations to food banks.

49. Thanks to her vision and leadership, this program has donated more than 195 million meals to community food banks since its inception, as well as having kept more than 100,000 tons of food waste out of landfills.
Last year alone, Kroger donated more than 50 million pounds of healthy, perishable food to Feeding America food banks through this program.
Mermer said, “with 1 in 6 Americans unsure of where the next meal will come from, Kroger’s #1 priority is to support organizations that bring food and hope to our neighbors in need.”

50. Recognize the Economics of Retail
Chapter 1.3

51. Importance of the Retail Industry in the US
As one of America’s largest industry sectors and largest private-sector employer, retail drives virtually every facet of our economy and supports tens of millions of jobs.
Retail is the leading indicator on a host of economic, measures, from job growth and consumer spending to sales and inventory.
Retailers- large and small- support 1 out of every 4 American jobs.
Retailers are our country’s small business- the heart around which communities are built, grow, and prosper.

52. Retail is one of the largest industries in the US
Retailers, large and small, support one out of four American jobs
Retail generates around $2.58B, or 1/6 of the total US GDP
GDP is the monetary value of all finished goods and services produced within a country annually.
Retail supports at least one in every five jobs in all 50 states