Retailing Final stop on the distribution path The process by which products are sold to consumers for personal use Retailers add value with image, inventory, service quality, location, and pricing policies

The Wheel of Retailing New types of retailers find it easiest to enter the market by offering goods at lower prices than competitors; after they gain a foothold, they gradually trade up, improving facilities and increasing the quality and assortment of merchandise, and offering special amenities; upscaling increases costs causing prices to rise; higher prices open the door for a new entrant charging lower prices

Wheel of Retailing

Wheel of Retailing

Retail Life Cycle Retailers are also products because they provide benefits and must offer a competitive advantage to survive Introduction: new retailer takes a unique approach to doing business Growth: retailer catches on with shoppers, sales and profits rise, others start to copy it so retailer expands offerings Maturity: many have copied it and an entire industry has formed, profits decline Decline: retail format becomes obsolete

What’s in Store for the Future Demographics Globalization Technology

Major Demographic Factors Convenience Catering to specific age groups Recognizing ethnic diversity

Meeting Multiple Needs

Retailers Go Global

Classifying Retailers All retailers are classified by the NAICS codes Some lines still blurred scrambled merchandising - strategy of carrying a combination of food and nonfood items

Classifying Retailers by Service Self-service Limited-service Full-service

Limited-Service Retailer

Self-Service Retailer

Limited-Service Retailer

Full-Service Retailer

Classifying by Merchandise Selection Merchandise breadth is the number of different product lines available Narrow versus broad assortments Merchandise depth is the variety of choices available for each specific product Shallow versus deep assortments

Merchandise Selection

Store Types Convenience stores Supermarkets Specialty stores Department stores Hypermarket stores Discount stores General merchandise discount stores Off-price retailers Warehouse clubs Factory outlet stores

Convenience Stores

Warehouse Clubs

Nonstore Retailing Any method a firm uses to complete an exchange that does not require a customer visit to a store Direct selling Automatic vending

Direct Selling Direct selling occurs when a salesperson presents a product to one individual or a small group, takes orders, and delivers the merchandise Door-to-Door Sales Parties and Networks party plan systems multilevel pyramid schemes

Party Plan System

Multi-level Networks Amway uses direct selling through multi-level networks to expand globally

Automatic Vending Appealing for selling convenience goods because of small space required, and minimal personnel to maintain and operate

Vending Machines

Levi Strauss Vending Machine Levi Strauss sells jeans in vending machines to French consumers

Virtual Models Online

E-Commerce and the Customer Benefits Shop 24/7 Less travel More choices More information Price competition Fast delivery Limitations Lack of security Fraud Can’t touch items Hard to distinguish color/texture online Expensive to return

Comparison Web sites

E-Commerce and the Marketer Benefits The World is your marketplace Decreases costs Very specialized businesses possible Real-time pricing Tracking of consumer behavior Limitations Lack of security Must maintain site Price competition Conflicts with conventional retailers Legal issues not resolved

The Problem of Identity Theft

Store Positioning Strategy Atmospherics Store Image

REI Enhances Store Image

Mapping Store Personality

Store Design: Setting the Stage Store layout and traffic flow Fixture type and merchandise density The sound of music Color and lighting The Actors: Store Personnel Pricing policy

Building the Theater: Store Location Types of locations Site selection Location planners evaluate trade area and conduct site evaluation traffic flow, number of parking spaces available, ease of delivery access, visibility from street, local zoning laws, population characteristics, community life cycle, mobility, degree of competition

Grid Layout

Types of Store Locations

Site Selection Reflect growth strategy Convenient to customers in trade area Population characteristics Degree of competition Target market location