1. Retail Trade Frequently Asked Questions By: Qresha Abdul Gaffaar

2. Explain the term ‘e-commerce ’ electronic commerce buying and/or selling using a computer/through the Internet

3. many companies wish to expand their markets without incurring the expenses of additional shop space Explain two reasons why e-commerce is becoming increasingly important. [4] their competitors are offering e-commerce, so they must offer e-commerce to remain competitive

4. Explain two reasons why e-commerce is becoming increasingly important. [4] suitable for a large range of products/services some of the difficulties of using Internet shopping have been overcome - danger of credit card fraud an increasing number of people have access to computers and to the Internet

5. many people have little time to go shopping and prefer to shop on-line Explain two reasons why e-commerce is becoming increasingly important. [4] saves time and money on other forms of advertising

6. to make the chocolates more attractive than other chocolates Explain why attractive packaging is used for the chocolates. [4] chocolates are often given as presents so colour adds to this the brand can be included on the packaging to attract attention

7. so that the packaging attracts attention - may mean more orders Explain why attractive packaging is used for the chocolates. [4] can be used as part of the advertising on the website to encourage impulse buying

8. ( d) Explain how a retailer might make use of computers to run the business. [6] use of computers in documentation process use of Internet banking to run the business' finances use of computer software to manage accounts word processing, advertising, literature,

9. communication with customers - fax, e- mail (d) Explain how a retailer might make use of computers to run the business. [6] communication with other parts of the business - intranet, fax, e-mail communication with suppliers - fax, e- mail

10. database of customers and their details ( d) Explain how a retailer might make use of computers to run the business. [6] stock control in warehouse communication with customers desktop publishing for communication and advertising material

11. buying in bulk - obtain discounts - lower prices to customers (a) What are the advantages of large-scale retailing to Bonusbuy itself? [6] can afford to use regional distribution centres and own transport can use self service - savings on sales staff employment of specialist buyers - quality goods at competitive prices

12. should have quick turnover - beneficial when selling perishables (a) What are the advantages of large-scale retailing to retailers itself? [6] economies of scale - administration/advertising use of technology - bar coding, epos offers wide range of goods

13. (a) What are the advantages of large-scale retailing to Bonusbuy itself? [6] Attracts customers Profit

14. may encourage impulse buying - so greater turnover What are the advantages to the retailer of providing self service to its customers [3] saves on sales staff - stocking shelves, manning tills may encourage more shoppers who want to self select involves less work for retailer than offering personal service

15. enables customers to recognise the products What are the advantages to the retailer of selling its own brands [3] makes the goods offered by the retailer distinctive assists retailers to advertise

16. What are the advantages to the retailer of selling its own brands [3] encourages brand loyalty/goodwill may be able to offer these goods more cheaply than other brands because has placed a bulk order with a particular producer

17. What are the advantages to the retailer of using bar coding on its goods. [3] may speed up individual transactions at the till may reduce human error at the till saves pricing goods individually enables stock control to be computerised

18. What are the advantages to the retailer of using bar coding on its goods. [3] enables the retailer to see which types of goods are selling enables re-ordering to be computerised and so reduces costs to Retailer and so reduces costs to retailer

19. What are the advantages to the retailer of providing after sale service. [3] Creates customer loyalty May increase turnover May need to deliver goods May be selling goods which require maintenance

20. Explain why the retail trade attracts many people wishing to set up small businesses. [4] A small amount of money is needed to start trading e.g. own savings Banks may be willing to lend against collateral such as property It is an attractive job for many people with a wide diversity of opportunities/products/ services that can be sold

21. Explain why the retail trade attracts many people wishing to set up small businesses. [4] It may be possible to take a franchise and so share risk with a larger organisation It may be possible to operate from home using the Internet or have premises close to home Many people enjoy serving customers and offering personal service

22. Explain why the retail trade attracts many people wishing to set up small businesses. [4] Back up from wholesaler Easy to set up

23. Name important factors to consider when deciding on the location of a small retail business. [6] Nearness to customers – customers often buy locally Availability of labour – may need shop assistants Availability of transport – customers to come to the shop, labour Kind of site – close to other shops – on main roads

24. Name important factors to consider when deciding on the location of a small retail business. [6] Ease of obtaining supplies – near main roads, delivery area Close to/away from competition especially large-scale retailers – may have to rely on nearby customers Close to/away from competition especially large-scale retailers – may have to rely on nearby customers

25. Explain why Paradise Supermarkets decided to buy most of its supplies direct from suppliers. can take advantage of economies of scale – bulk buying to obtain discounts can obtain goods to its own specification and so can control the quality may required manufacturers to make goods under its own brand name + e.g.

26. Why many customers prefer to buy from supermarkets. [6] it allows them to do one-stop shopping and to buy large quantities of goods are able to use self service so that they can examine the goods shop at their own pace without pressure from sales staff.

27. wide range of goods at competitive prices the goods are likely to be fresher and also packaged and branded for easy recognition delivery of goods, specialist counters within the store e.g. bakery Why many customers prefer to buy from supermarkets. [6]

28. They value the personal service and the quality of the goods sold prefer to shop daily rather than weekly They may also be allowed informal credit Why many customers prefer to buy from small corner shops. [6] They may also be allowed informal credit

29. purchase cans of baked beans in very large quantities, obtain larger trade discount supermarket may be offering the beans on special offer or as a loss leader no middleman like wholesaler (i) Why is the supermarket able to sell cans of beans more cheaply? [4] Large turnover

30. very convenient to buy in the comfort of their own homes credit card fraud have been reduced (Does the growth of e-commerce present a threat or an opportunity to the shops in the shopping centre? are too busy to have time for shopping and find it convenient to order everything obtain sales by offering online services Opportunities

31. supermarkets allow shoppers to order food and household goods online and offer a delivery service This has greatly added to their turnover (Does the growth of e-commerce present a threat or an opportunity to the shops in the shopping centre? save them costs of expensive rentals and reduce the wage bill Opportunities

32. Threats shops who are reliant on shoppers Others prefer to see the actual goods they wish to buy (Does the growth of e-commerce present a threat or an opportunity to the shops in the shopping centre? buying online is likely to be more expensive

33. Offer products or services that the large-scale retailer does not offer. Try to cut costs – reduce labour. ((b) Mrs Habib, a small-scale retailer, is faced with competition from a large-scale retailer. Suggest two actions she might take. [2] Advertise – introduce special promotions. Convert from personal service to self-service. Look for different/cheaper suppliers. Move to another location

34. Do nothing and wait and see. Use cash and carry. b) Mrs Habib, a small-scale retailer, is faced with competition from a large-scale retailer. Suggest two actions she might take. [2] Join voluntary chain. Give credit (informal credit). Improve variety of goods. Provide after-sales service.

35. Use of bar-coding and scanners – to speed up transactions at the checkout and to aid stock control. Database – stock records. (i) Large-scale retailers computerise many of their operations. Describe two ways in which these retailers make use of computers. [4] Computerised ordering of supplies and the accounts. Electronic point of sale with electronic tills to speed up customer payments.

36. Use of security cameras to try to prevent shoplifting and employee theft. Online ordering by customers with Internet catalogues and home delivery. (i) Large-scale retailers computerise many of their operations. Describe two ways in which these retailers make use of computers. [4] Intranet – computer network within the retail business to aid communication between staff Communication between branches by means of email.

37. Preparation of advertising and promotional materials using desktop publishing. (i) Large-scale retailers computerise many of their operations. Describe two ways in which these retailers make use of computers. [4] Internet – for advertising. Use of credit card machines.

38. Retailer uses bar coding and electronic tills, customers should find that there are fewer mistakes (i) Is computerisation by large-scale retailers likely to benefit their customers? Give reasons for your answer. [6] move through the checkouts more quickly retailer should not run out of supplies. It may offer the customer online shopping and prices may be lower

39. large-scale retailer is able to offer customers more services (i) Is computerisation by large-scale retailers likely to benefit their customers? Give reasons for your answer. [6] (checking their shopping bills, loyalty schemes) and a wider range of goods with better promotions.