CHAPTER ELEVEN THE IMPORTANCE OF RETAIL Copyright © 2012 John Wiley & Sons, Inc. Photograph Courtesy of SuperStock

Learning Objectives Identify the various motivations for tourist shopping and how they can be met. Describe the role of shopping and retail in a resort operation. Illustrate the impact on sales productivity of: Layout and design Merchandising Customer segments Copyright © 2012 John Wiley & Sons, Inc.

Identify the various motivations for tourist shopping and how they can be met. Shopping Motivations: Nostalgia – souvenirs are reminders of the places people have traveled. Prestige – buying local art allows tourists to show appreciation for local workmanship and add to their personal collections Copyright © 2012 John Wiley & Sons, Inc.

Shopping Motivations (cont.) Functionality – convenience and price of items may vary depending on vacation destination Gifts – tourists buy gifts for family and friends Altruistic reasons – tourists may buy items that benefit people and/or places at the destination Copyright © 2012 John Wiley & Sons, Inc.

Shopping Venues Souvenir Shops – stock items representative of a region Super Markets Clothing Stores Malls – some have become tourist attractions with recreational experiences Shopping festivals Copyright © 2012 John Wiley & Sons, Inc.

Shopping Venues (cont.) Airport Shopping Landside – located before security checkpoints and open to all passengers and visitors Airside – only accessible to ticketed passengers Railway Stations – for short distance commuters Copyright © 2012 John Wiley & Sons, Inc.

Shopping Venues (cont.) Duty-free Shops – 30% of all spending on each trip is done in duty-free shops Craft Villages – produce specific types of handicrafts Museums, heritage sites, wineries and distilleries, special events and theme parks also provide shopping opportunities. Copyright © 2012 John Wiley & Sons, Inc.

Layout and design Merchandising Customer segments All segments are interrelated. Strengthening one area takes pressure off the others and visa versa. Illustrate the impact of sales productivity of: Copyright © 2012 John Wiley & Sons, Inc.

Layout and Design Time How much time people spend in a store is an important factor in determining how much people buy Set up should lead customers from one part of the store to another, a voyage of discovery The more shopper-employee contact, the greater the average sale The longer shoppers wait in line, the lower their impression of overall service Copyright © 2012 John Wiley & Sons, Inc.

Layout and Design Layout Displays should be offset to one side, to be more easily seen from an angle The reliable zone is the placement area where customers are most likely to see the merchandise This area extends from slightly above eye level to the knee level Copyright © 2012 John Wiley & Sons, Inc.

Layout and Design People would rather look at people than objects, so place advertising near employees People travel and react predictably to their surroundings In North America people tend to walk to the right upon entering a store Visitor flow should take customers through souvenir shops Copyright © 2012 John Wiley & Sons, Inc.

Layout and Design There will be more sales if shops are near the exit Keep the transition zone as small as possible Average sale per customer increases as more customers use baskets Copyright © 2012 John Wiley & Sons, Inc.

Merchandising Visible Inviting Accessible The first two items attract shoppers while the third is important for keeping them in the store. Copyright © 2012 John Wiley & Sons, Inc.

Merchandising Retail Competition Resort retailers must compete with major retail stores and chains who are increasingly devoting more space to golf specific clothing Resort shops offer logoed clothing The more expensive an item is, the fewer that should be put out on the floor Copyright © 2012 John Wiley & Sons, Inc.

Merchandising Sales can be stimulated if: The product is the focus The surrounding environment needs to account for the products final use Mini-environments can be created through themes Creative merchandising stimulates all five senses Similar items should be grouped to create ambiance Copyright © 2012 John Wiley & Sons, Inc.

Merchandising Leisure shoppers are more inclined to make impulse purchases Advertising messages must be kept short where people are walking fast Longer messages can be posted at cash registers Copyright © 2012 John Wiley & Sons, Inc.

Merchandising Merchandise Placement Merchandise should be displayed to the right of where customers stand Most popular brand should be dead center Brand the store is trying to build should be placed just to the right Copyright © 2012 John Wiley & Sons, Inc.

Operations Contact initiated by an employee increases likelihood a shopper will buy something The most important factor in determining a shopper’s opinion of the service he receives is waiting time Adding sound, light and color to the register area can ease customers from the anxiety of the financial transaction Copyright © 2012 John Wiley & Sons, Inc.

Customer Segments When shopping, men: Move faster, spend less time looking Look at price tags less often and can be more easily upgraded to a more expensive item Get a thrill from the experience of paying Hate asking for directions Copyright © 2012 John Wiley & Sons, Inc.

Customer Segments When shopping, women: Spend more money when shopping with other women Are more demanding of the shopping environment Older shoppers: Must have easy to read signs See a lot more black, white and red, and a lot less of other colors Need brightly lit stores Copyright © 2012 John Wiley & Sons, Inc.

Customer Segments Children If stores are not child friendly, parents will be deterred to enter Make merchandise reachable Childproof the store Be able to divert the attention of a restless child Design a good area for children Generation X Are attracted to the specialty-store environment if the merchandise is up-to-date Copyright © 2012 John Wiley & Sons, Inc.

Profit Ratios Sales Analysis Turnover Stock-to-sales Price zones Copyright © 2012 John Wiley & Sons, Inc.