THE BUSINESS OF FASHION 3.03 Identify the types of fashion retailers. UNIT C THE BUSINESS OF FASHION 3.03 Identify the types of fashion retailers.

Main types of retailers Retailers can be classified into 1 of 2 categories, based on the merchandise the store carries. General merchandisers Specialized merchandisers

General merchandisers Carry & market many types of goods in several price ranges May be a rural general store or a huge mass merchandiser Sears Product Mix: Appliances Fashion Tools Automotive & Tires Beauty & Health Baby Books Jewelry Fitness & Sports Lawn & Garden Outdoor Living

Specialized merchandisers Narrower lines of related merchandise Target a more distinct group of customers Market certain categories of goods to particular age groups, sizes, and consumer tastes and preferences Examples: Victoria’s Secret, Footlocker, Lane Bryant

Even though retailers can be categorized as either general or specialized merchandisers, they can be further classified by specific types:

Department store retailing Large-scale mass merchandisers Usually carry a wide range of sizes Carry household goods “Departmentalized” by category/sizes of goods being sold Each department may have separate salespeople and payment areas. Generally known for high quality, fashion, and customer service Usually offer credit and return or exchange privileges Examples:

Department store retailing (cont.) Offer numerous customer services such as gift wrap, layaway, and restaurant(s) Sell to many income levels, but generally target middle to upper income customers High operating expenses due to number of employees and customer services Advertise heavily Large buying and sales volume

Types of department stores Branch stores Flagship stores Junior department stores Chain stores

Branch stores Small retail stores owned and operated by a parent store. May be located in suburbs or other urban areas Receive merchandise and operation instructions from the original store (or flagship store)

Flagship stores “Parent” or main stores originally located in a central business district (New York City is the home office for all the Macy’s branch stores throughout the country). Responsible for merchandising and promotion for entire operation Can make merchandise available to branch stores on short notice Some flagship stores have closed and moved administrative offices to other locations.

Junior department stores Small department stores with limited assortments of apparel, housewares, gifts, and household textiles. Moderately priced merchandise Small, locally owned Low sales volume makes it difficult for these stores to compete.

Chain stores A group of stores (usually 12 or more) owned, managed, merchandised, and controlled by a central office. All stores carry similar goods at similar prices. Prices in chain stores are often lower than department stores. Private label merchandise (Example: Kenmore for Sears) Decisions made at central headquarters Merchandise can be produced to the chain’s specifications Chains can be general or specialized May serve as anchor stores Anchor stores: The attractions that draw customers to shopping centers and malls.

Discount store retailing Discount stores: Mass merchandisers that sell at lower-than-average prices. Located in large, no-frills facilities in high traffic areas Offer minimal customer services Merchandise is paid for at checkout counters located near store exits. High sales volume, shown strongest growth in market share Fashion followers Many retailers are making an effort to offer more current fashions. Most discounters are chains.

Discount store retailing (cont.) Extended operating hours Many imports from low-wage countries Appeal to customers with modest clothing budgets Other Types of Discount Stores Off-price discounters Factory outlets

Off-price discounters Retailers that sell brand name or designer merchandise at lower-than-normal prices. High fashion goods at moderate prices Changing and unstable collection of merchandise Buy merchandise at below-wholesale prices Labels may be cut out to protect merchandise sold in upscale shops

Off-price discounters (cont.) Do not place advance orders Make low-cost special purchases during the season when other stores are planning for the next season Stock consists of production overruns, end-of-season goods, closeouts, and irregulars.

Factory outlets Sell only merchandise produced by the company Discount stores that are manufacturer owned and operated Sell only merchandise produced by the company Products sold include overruns, canceled orders, and discontinued items. May be located in factory malls

Wholesale Warehouse Clubs Specialize in bulk sales of a limited selection of nationally branded staple merchandise Offer almost no services, no shopping bags, no home delivery, limited payment options Most charge an annual membership fee Merchandise is bought with volume discount and stacked high in packing cartons Almost no advertising or promotion is done

Hypermarkets Huge “supercenters” Function as a combination grocery and discount store Target time-stressed consumers who want to do all of their shopping in 1 place The concept, which started in Europe, also features a very high volume of sales at low prices

Specialty store retailing Specialty stores: Retailers that sell limited classifications of merchandise. Ex: maternity shops, shoe stores, bridal boutiques, children’s apparel, accessory shops Many specialty stores are now franchise stores or national chains with well-known retail names. Boutiques Low sales volume High prices Offer unusual merchandise, more personalized service, convenience, and ambience Known for a certain level of design or quality of merchandise

Franchise stores Retail establishments in which a firm or an individual buys the right to use a famous or established name or trademark in a specified trading area.

Franchise stores (cont.) Often located in exclusive shopping areas of major cities or boutique areas within large department stores The designer or manufacturer does not have direct ownership of the franchise and does not help run the business. They only supply goods to the retailer.

Boutiques Small, stand-alone shops or areas within larger stores that sell unusual, limited quantity apparel, accessories, or decorative items.

Boutiques (cont.) High level of customer service Fashion-forward merchandise Target special-interest customers Unique images New, artistic, and handmade items

*Nonstore retailing developed for the convenience of Selling without a conventional store facility. Mail-order retailing Telecommunication retailing In-home selling *Nonstore retailing developed for the convenience of the consumer.

Mail-order retailing Selling merchandise through catalogs distributed to customers. Customers select items by looking at pictures and reading product descriptions. An alternative for customers who prefer to shop from the comfort of their home or cannot go out to shop Orders are placed by mail, toll-free calls, computer.

Mail-order retailing (cont.) Merchandise is usually paid for by credit card and shipped directly to consumer. Extended order-taking hours May offer a full line of items or specialize in a single line of merchandise Many retail department stores and chains offer catalog shopping. Many mail-order houses also have retail stores. Customers usually pay high shipping and handling fees.

Telecommunication retailing Selling merchandise using communication devices. Television retailing Computer (Internet) retailing

Television retailing Television channels are used to show and describe merchandise. Many celebrities sell signature lines of merchandise. Consumers can control what they view. Orders are placed by telephone or online at the company website. Used to introduce and test the market for new products Reaches a national audience

Computer (Internet) retailing Electronic retailing or “e-tailing” Combines computer and telephone technologies with marketing and merchandising Shoppers view merchandise on computer monitors and order through a modem connection. Allows customers to view “electronic catalogs” Allows for comparison shopping

In-home selling Selling outside of a retail store Used to sell cosmetics, jewelry, clothing lines, and other merchandise through selling parties or door-to-door sales Merchandise is often high quality and unusual in design. Prices may be high.