2. 1-1

3. McGraw-Hill/Irwin Retailing Management, 6/e Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 1 Introduction to the World of Retailing

4. 1-3 The World of Retailing Introduction to Retailing Types of Retailers Multi-Channel Retailing Customer Buying Behavior

5. 1-4 What is Retailing? Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use. A retailer is a business that sells products and/or services to consumers for personal or family use. James Darell/Getty Images

6. Centro de Comercio Detallsita www.gda.itesm.mx/ccd ADMINISTRACIÓN DE MERCANCÍAS / PRECIOS: Aprenderás el manejo de compras, resurtidos e inventarios que realizan las empresas de comercio al detalle. Analizarás la tecnología que está revolucionando el retail y estudiarás la administración y el establecimiento de precios, así como el desarrollo y presentación de líneas de producto, dando especial atención a las relaciones comprador-proveedor. INTERNSHIP I Y II: Aplicarás tus conocimientos dentro de una empresa detallista. en el verano trabajarás 7hrs. diarias por 5 semanas en una empresa de comercio al detalle, en donde conocerás las diferentes áreas de la empresa y tendrás la oportunidad de resolver algún problema o realizar un proyecto específico. ADMINISTRACIÓN DE LA TIENDA Y SERVICIO AL CLIENTE: Analizarás los procesos en el manejo y administración de una tienda. Aprenderás temas relacionados con sistemas de información, recursos humanos, imagen y diseño de la tienda (visual merchandising), servicio al cliente y CRM (Customer Relationship Management), entre otros. ESTRATEGIA DE COMERCIO DETALLISTA MULTICANAL: Conocerás las estrategias que siguen los principales detallistas y su implicación en las ventas. Comprenderás la metodología para la ubicación de puntos de venta. Aplicarás las estrategias de publicidad y promoción que se utilizan en el comercio detallista. Además, aprenderás la nueva tendencia en el retail de administración por categorías.

7. 1-6 The Distribution Channel

8. 1-7 Examples of Retailers Retailers: Kohl’s, Macy’s, Wendy’s, Amazon.com, Jiffy Lube, AMC Theaters, American Eagle Outfitter, Kroger Firms that are retailers and wholesalers that sell to other business as well as consumers: Office Depot, The Home Depot, United Airlines, Bank of America, Costco The McGraw-Hill Companies, Inc./Andrew Resek, photographer The McGraw-Hill Companies, Inc./John Flournoy, photographer

9. 1-8 Manufacturing, Wholesaling and Retailing Vertical Integration – firm performs more than one set of activities Ex: retailer invests in wholesaling or manufacturing Backward Integration – retailer performs some distribution and manufacturing activities Ex: JCPenney sells Arizona jeans (Private Label) Forward Integration – manufacturers undertake retailing activities Ex: Ralph Lauren operates its own stores

10. 1-9 How Retailers Add Value Break Bulk -Buy it in quantities customers want Hold Inventory -Buy it at a convenient place when you want it Provide Assortment -Buy other products at the same time Offer Services -See it before you buy, get credit, layaway Ryan McVay/Getty Images

11. 1-10 How Retailers Add Value The value of the product and service increases as the retailer performs functions. Bicycle is developed at manufacturer Bicycle is developed in several styles Bicycle is offered in convenient locations in quantities of one Bicycle is featured on floor display Bicycle can be bought on credit or put on layaway

12. 1-11 World’s Largest Retailers

13. 1-12 Social and Economic Significance of Retailing Community Support Over $3.4 trillion in annual U.S. sales greater than medical care, housing, recreation combined Employs 27 million people 21% of non-agricultural US workforce Management training opportunities Entrepreneurial opportunities

14. 1-13 Retailing is Big Part of Economy Services (45.8%) Manufacturing (11.2%) Retail (21.8%) Government (16.6%) Other 5.6%

15. 1-14 Retailers are a Business Like Manufacturers Accounting Marketing Finance Human ResourcesOperations MIS The McGraw-Hill Companies, Inc./Andrew Resek, photographer

16. 1-15 Nature of Retail Industry is Changing Mom and Pop Store To Today’s Retailer

17. 1-16 Retailing is a High Tech Industry Selling Merchandise over the Internet Using Internet to manage supply chains Analyze POS data to tailor assortments to stores Computer systems for merchandise planning Ryan McVay/Getty Images

18. 1-17 Globalization of Retailing Source Merchandise From Around the World Wal-Mart Operates in U.S., China, Mexico, UK, Germany Carrefour has Stores in 25 Countries Don Farrall/Getty Images

19. 1-18 Comparison of Distribution Channels Across the Globe

20. 1-19 Retail Management Decision Process

21. 1-20 JCPenney’s Strategic Evolution Main Street private label soft goods retailer Changes in environment -- increased disposable income, growth of suburbs, interstate highway program Emulate Sears in enclosed suburban malls Focus on soft goods -- drop automotive, sporting goods, hardware Develop catalog, develop electronic retailing Stand alone stores Centralized checkout

22. 1-21 Sears Holdings’ Strategic Evolution Large number of merchandise categories -- appliances, hardware, apparel Malls evolved into places for buying soft goods, hard goods sold at category killers The Softer Side of Sears Refocused on value -- Testing carts in stores Acquired Lands’ End Reviewed training program for new managers New growth with Kmart

23. 1-22 Organic and natural foods supermarket chain Assortment beyond organic/natural foods –Private labels - Whole Food™, 360 Day Value™ –Love, trust, and employee empowerment –Always innovation: Candy Island Lamar Street Greens Fifth Street Seafood In-store Massage Therapist Whole Foods Implementation

24. 1-23 Claire’s Retail Mix Retail Strategy Customer ServiceLocation Merchandise Assortment Pricing Communication Mix Store Design and Display

25. 1-24 Claire’s Retail Mix Enclosed malls Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design Location Strategy

26. 1-25 Claire’s Retail Mix Location Pricing Communication Mix Store Design and Display Customer Service Jewelry, accessories and cosmetics for tweens and teens Assortment Strategy

27. 1-26 Claire’s Retail Mix Location Communication Mix Store Design and Display Customer Service Merchandise Assortment Modest with Sales Pricing Strategy

28. 1-27 Claire’s Retail Mix Communication Mix TV and Magazine Ads Store Design And Display Customer Service Location Merchandise Assortment Pricing

29. 1-28 Claire’s Retail Mix Store Design and Display Bright, fashionable and fun boutique layout Customer ServiceLocation Merchandise Assortments PricingCommunication Mix

30. 1-29 Claire’s Retail Mix Customer Service Modest Location Merchandise Assortment Pricing Communication Mix Store Design and Display

31. 1-30 Macy’s Retail Mix Retail Strategy Customer ServiceLocation Merchandise Assortment Pricing Communication Mix Store Design and Display

32. 1-31 Macy’s Retail Mix Enclosed Malls Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design Location Strategy

33. 1-32 Macy’s Retail Mix Location Pricing Communication Mix Store Design and Display Customer Service Many Items in Apparel and Soft Home Assortment Strategy

34. 1-33 Macy’s Retail Mix Location Communication Mix Store Design and Display Customer Service Merchandise Assortment Moderate with Frequent Sales Pricing Strategy

35. 1-34 Macy’s Retail Mix Communication Mix TV, Newspaper Ads and Special Events Store Design And Display Merchandise Assortment Pricing Customer Service Location

36. 1-35 Macy’s Retail Mix Store Design and Display Racetrack with Displays Customer ServiceLocation Merchandise Assortments PricingCommunication Mix

37. 1-36 Macy’s Retail Mix Customer Service Modest Location Merchandise Assortment Pricing Communication Mix Store Design and Display

38. 1-37 Target’s Retail Mix Retail Strategy Customer ServiceLocation Merchandise Assortment Pricing Communication Mix Store Design and Display

39. 1-38 Target’s Retail Mix Free-standing Stores Customer Service Merchandise Assortment Pricing Communication Mix Store Display And Design Location Strategy

40. 1-39 Target’s Retail Mix Location Pricing Communication Mix Store Design and Display Customer Service Large Number of Categories Private Labels Few Items in Each Category Assortment Strategy

41. 1-40 Target’s Retail Mix Location Communication Mix Store Design and Display Customer Service Merchandise Assortment Low to Modest Pricing Strategy

42. 1-41 Target’s Retail Mix Communication Mix TV and Newspaper Insert Ads Store Design And Display Customer Service Location Merchandise Assortment Pricing

43. 1-42 Target’s Retail Mix Store Design and Display Colorful, wide aisles displays for products with a grid layout Customer ServiceLocation Merchandise Assortments PricingCommunication Mix

44. 1-43 Target’s Retail Mix Customer Service Limited Location Merchandise Assortment Pricing Communication Mix Store Design and Display

45. 1-44 Ethical Situations for a Retail Manager Should a retailer sell merchandise that is suspects was made using child labor? Should it advertise that its prices are lowest in area even though some items are not? Should a buyer accept an expensive gift from a vendor? Should salespeople use high-pressure sales when they know the product is not the best for the customer’s needs? Should a retailer give preference to minorities when making a promotion decision? Should a retailer treat some customers better than others?

46. 1-45 Checklist for Making Ethical Decisions

47. 1-46 You are Faced with an Ethical Decision: What Can You Do? Ignore your personal values and do what your company asks you to do – you will probably feel dissatisfied with your job. Take a stand and tell your employer what you think. Work to change the policies. Refuse to compromise your principles – you could lose your job!

48. 1-47 Career Opportunities in Retailing Start Your Own Business Walton Family (Wal-Mart) Fisher (The Gap) Wexner (limited) Menard (Menard’s) Marcus, Blank (The Home Depot) Kellogg (Kohl’s) Schulze (Best Buy) Levine (Family Dollar) Gold (99Cent Only) List of Retail Entrepreneurs on Forbes 400 Richest Americans

49. 1-48 Misconceptions About Careers in Retailing Don’t need college Low pay Long hours Boring Dead-end job No benefits Everyone is part-time Unstable environment No opportunity for women and minorities The McGraw-Hill Companies, Inc./Andrew Resek, photographer

50. 1-49 Why You Should Consider Retailing Entry level management positions -Department manager or assistant buyer/planner -Manage and have P&L responsibility on your first job Starting pay average with great benefits - Some retailers pay graduate school No two days are alike Buying and planning for financially analytically oriented Management for people-people

51. 1-50 Types of Jobs in Retailing Most entry level jobs are in store management or buying, but there’s… -accounting and finance -real estate -human resource management -supply chain management -advertising -public affairs -information systems -loss prevention -visual merchandising