Retail Mgmt Midterm

A set of business activities that adds value to the products and services sold to consumers for their personal or family use

Retailers and wholesalers

Manufacturing -> Wholesaler -> Retailer -> Consumer

A set of firms that make and deliver a given set of goods and services to the ultimate consumer

Firm performs more than one set of activities in the channel

Retailer performs some distribution and manufacturing activities (ex: private label)

Manufacturers undertake retailing activities (ex: Ralph Lauren operates its own stores)

Retailers (1) provide assortment, (2) break bulk, (3) hold inventory so you can buy it when you want it, and (4) offer services such as credit and layaway

High sales, employment & job growth in US, social responsibility, global player

The voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations

Among same type of retailers (ex: Dillard's vs. JC Penney)

Between nearby stores that may be different types of retailers that carry the same merchandise (ex: Dillards vs. Wal-Mart)

(1) the target market, (2) the product & service mix, (3) a long-term comparative advantage

A system or code of conduct based on universal moral duties and obligations that indicate how one should behave

A merchant establishment primarily engaged in buying, storing, and physically handling goods in large quantities, and reselling the goods (usually in smaller quantities) to retailers or industrial or business users

(1) Variety or assortment of merchandise, (2) services, (3) visual merchandising, (4) location, (5) pricing

Breadth: wide vs. shallow. The number of merchandise categories (ex: Macys)

Depth: deep vs. shallow. The number of items in a category (SKUs) - (ex: Victoria's Secret)

Many SKUs = more backup stock required = HIGHER investment cost

By reducing its assortment in order to control store operating expenses; example of an extreme value food retailer or limited assortment supermarket

Extreme value and off-price retailers started doing exceedingly well; permanently changed consumer buying patterns

• -Fastest growing retail category
• -Large stores combine supermarket with full-line discount store
• -"One-stop shopping"

• -Offer a limited and irregular assortment of food and general merchandise
• -Low-locations, inexpensive store design, little customer service
• -Carrying a limited assortment of fast-selling items = low inventory holding costs

• -Carry broad variety, generally shallow assortment
• -Tiers: 1st (Saks), 2nd (Macy's), 3rd (JC Penney)

• -Carry narrow variety, deep assortment
• -Often located in malls (which have the highest rent as compared to street-front stores)
• -Problems: decline in mall shopping and manufacturers opening their own stores

Wal-Mart (focus on low price and good value) and Target (more fashionable apparel) dominate

• -Deep and narrow assortments
• -Low price & service
• -Incredible growth

• -Benefitted from recession
• -Inconsistent assortment of brand name merchandise at low prices

• (1) Intangibility
• (2) Simultaneous production & delivery
• (3) Perishability (no inventory)
• (4) Inconsistency of the offering
• *More about an experience than a product

• -Independent, single-store establishments
• -Corporate retail chains
• -Franchises

• -30 to 40% of US retail sales
• -Franchisee pays fixed fee plus percent of sales
• -Franchisee implements program, decides location
• -Can be corporate- or privately-owned

Stock-keeping unit; the smallest unit available for keeping inventory control (usually includes a garment's size, color, and style)

• -Touching & feeling merchandise
• -Personal service
• -Risk reduction
• -Immediate gratification
• -Entertainment, social interaction
• -Browsing
• -Cash payment

• -Safety
• -Convenience
• -Ease of use

• -Safety
• -Convenience
• -Broad & deep assortments
• -Extensive & timely info
• -Personalization

Retailers can reach out to new markets and obtain insights into customers' shopping behaviors

• (1) Overcoming the limitations of an existing format
• (2) Low-cost, consistent execution
• (3) Gaining insight into consumer shopping behavior
• (4) Expanding market presence
• (5) Building a strategic advantage

• -Retailers can attract more customers and satisfy existing ones better
• -Growth of sales in stores is declining
• -Sales through e-channel are growing

When a manufacturer sells directly to consumers, thus competing directly with its retailers

When consumers' collect information about products on one company's channel and then buys the product from another competitor

• -New competitors
• -New formats
• -New technologies
• -Shifts in customer needs

The nature of the retailer's operations (its retail mix)

An advantage over the competition

• (1) Attractiveness (large, growing, little competition)
• (2) Consistent with your competitive advantages

Smooth transition; transparency between channels; integration

If a strategy can be easily duplicated, it is NOT a competitive advantage (ex: dropping price is NOT, while securing the best store locaition, carrying exclusive merchandise, and providing better customer service ARE)

-Customer is reluctant to patronize competitive retailers

• (1) Developing a strong brand for the store
• (2) Developing clear & precise positioning strategies
• (3) Creating an emotional attachment with customers through loyalty programs

Builds customer loyalty by creating an emotional tie with customers that represents a predictable level of quality

• -Brand image
• -Positioning
• -Unique merchandise
• -Customer service
• -Customer relationship management programs

• -Strategies for recruiting & retaining talented employees
• -Employee branding
• -Develop positive organizational culture

• -Better services
• -Increase in breadth & depth
• -Decrease in prices
• *EFFICIENCY is key in distribution

• (1) Market penetration
• (2) Market expansion
• (3) Retail format development
• (4) Diversification (related vs. unrelated)

• -Attract customers from target market
• -Get current customer to visit store more often or buy on each visit

Sales associate in one department sell complimentary merchandise from other departments

-Involves using the existing retail format in new market segments (ex: A&F opening Hollister)

Develops a new retail format with a different retail mix for the same target market (ex: Tesco opening Tesco Express)

• -Introduces a new retail format toward a market segment that is not curently served by the retailer
• -Related or unrelated diversification
• -Vertical integration into wholesaling or manufacturing

• -Globally sustainable competitive advantage (strong PL brands, reputation, low cost & efficiency)
• -Adaptability
• -Global culture
• -Financial resources

• (1) Market size
• (2) Growth
• (3) Seasonality
• (4) Business cycles

CONSTANTLY.

Set of assocations consumers have about a brand that are usually organized around some meaningful themes

The design & implementation of a retail mix to create in the customer's mind an image of the retailer relative to its competitors