Presentation on theme: "15 Retailing Dr. Close. Role of Retailing Retailing: sale of products to final customers (personal or family use) Employs 15 million people in the U.S."— Presentation transcript:
15 Retailing Dr. Close
Role of Retailing Retailing: sale of products to final customers (personal or family use) Employs 15 million people in the U.S. Accounts for $4 trillion to the U.S. economy –Customer contact – vital customer data here –Wheel of retailing: Enter as low margin, low price (e.g., Izod) Evolve higher price and service (supermarkets; electronics) Can you think of any other products or services that evolved from shabby to sheek?
Retail Strategy Retailing is top heavy: top 5% have 53% of sales Wal-Mart has 5% of all retail sales Retailing is risky: ¾ fail within a year! Non-financial risks: give up your evenings and weekends (especially during holidays) –http://www.landsend.comhttp://www.landsend.com Lands End: Successful Aspects?
Franchising as a Retail Strategy Granting business rights to franchisee, who pays for the right to use the brand name, product, or methods Examples of retail franchisers:
Classification of Retail by 1.Ownership (indy, franchise chain) 2.Service level (Nordstrom vs. Wal-mart) 3.Assortment (CVS vs. Smiths) 4.Price (Tiffany vs. jewelry kiosk)
Specialty Stores A type of retailer Conventional: know examples of… –Traditional: general store: anything sold in volume (why gone?) –Focus develops: Single line: one type (hardware, sporting goods, and what else??)
Specialty Stores, cont. Category killers/specialists (modern form of single line) –Specialized mass; all in line (Toys R Us; Circuit City; Home Depot) –kill type of merchandise
Department Stores Limited line: part of type; slow movers –Specialty shop: hi end, hi service, expanded assortment –Department store: each department has a limited line; decline since 50s; shopping products –High costs and competition
Discount Stores Scrambled merchandise: anything sells in volume (supermarkets, Rx) Mass merchandising concept: –Low price and turnover to spur sales volume through bigger markets
Discount Stores, cont. Discount full-line mass merchandisers (Reg. Wal-Mart & K-Mart) –What? Large, self service stores focusing on Soft goods (housewares, fabrics, apparel) & Staples (smooth demand, health and beauty) Low price, low service, high turnover
Discount Stores, cont. Off-price retailers (Marshalls, Ross, TJ Maxx) Supercenters (Super Wal-Mart, Super Target, Big K) –All routine needs at low price –Mass merchandise + groceries
Supermarkets –Large, self-service retailer with grocery specialty –Self-scanning trend: what is your take? –Competition: fierce, 1% profit on many items
Warehouse Clubs Warehouse club / wholesale club (Sams, Costco) –No frills, members only (why?) –Bulk purchases: price competition, homogeneous shopping goods
Convenience Stores Convenience products Often with gas stations –Convenience stores: fill-in your regular shopping Competition (fast food also) 24/7 is more important We pay for the convenience
Non-Store Retailing Vending: hi costs; hi prices (flat sales) Vending is a $40 billion U.S. market Cashless vending=wave of future Direct Marketing (Mail, Catalog, Telemarketing) E-tailing (TV shopping, online) M-commerce: buy from mobile devices (e.g., cell phones)
eTailing and DTC eTail= electronic retail DTC= Direct to consumer Shrinking use of wholesalers? (bypassing wholesalers more and more) eBay: hybrid etailer/online auction site Even sells services online (examples of services on ebay?)
eTail More innovative e-tail sites Mondera Nike ID Zappos
E-cart abandonment When you put an item in your online cart, and do not complete the purchase during that Internet session. A common practice Why do we do this?
E-cart abandonment Top reasons for e-cart abandonment:Top reasons for e-cart abandonment: Research/organization useResearch/organization use Privacy/security issuesPrivacy/security issues Frustration of the length of the checkout processFrustration of the length of the checkout process Total cost (including shipping, handling, and/or tax if applicable)Total cost (including shipping, handling, and/or tax if applicable) Desire to wait for a sale price (online or offline)Desire to wait for a sale price (online or offline) E-shopping for mere entertainment (versus a true intention to buy)E-shopping for mere entertainment (versus a true intention to buy)
Summary Role of retailing Retail strategy Retail Marketing Mix Types of retailers Non-store retail E-tail Any questions??