Chapter 15

specialty store

A retail store specializing in a given type of merchandise.

supercenters

A retail store that combines groceries and general merchandise goods with a wide range of services.

specialty discount stores

A retail store that offers a nearly complete selection of single-line merchandise and uses self-service, discount prices, high volume, and high turnover.

drugstore

A retail store that stocks pharmacy-related products and services as its main draw.

discount store

A retailer that competes on the basis of low prices, high turnover, and high volume.

full-line discount stores

A retailer that offers consumers very limited service and carries a broad assortment of well-known, nationally branded "hard goods.

off-price retailer

A retailer that sells at prices 25 percent or more below traditional department store prices because it pays cash for its stock and usually doesn't ask for return privileges.

mass merchandising

A retailing strategy using moderate to low prices on large quantities of merchandise and lower service to stimulate high turnover of products.

department store

A store housing several departments under one roof.

automatic vending

The use of machines to offer goods for sale.

non store retailing

Selling to consumers through other means than by visiting a store.

telemarketing

The use of the telephone to sell directly to consumers.

shop-at-home networks

-specialized forms of direct-response marketing. -shows display merchandise, with the retail price, to home viewers. -Viewers can phone in their orders directly on a toll-free line and shop with a credit card. -quickly grown into a multibillion-dollar business with a loyal customer following. -have the capability of reaching nearly every home that has a television set. ex. QVC

retailing mix

A combination of the six Ps—product, place, promotion, price, presentation, and personnel—to sell goods and services to the ultimate consumer.

buyer

A department head who selects the merchandise for his or her department and may also be responsible for promotion and personnel.

supermarket

A large, departmentalized, self-service retailer that specializes in food and some nonfood items.

convenience store

A miniature supermarket, carrying only a limited line of high-turnover convenience goods.

online retailing

A type of shopping available to consumers with access to the Internet. -Broadcast and cable television networks are cultivating a new source of income by selling products online that are featured in their TV shows. -Williams-Sonoma, for example, has linked its store gift registry to its Web site, allowing brides to see who has bought what in real time. Banana Republic stores in New York and Santa Monica, California, have kiosks so customers can order items that aren't on the shelves. ex. Van's selling alternative sports ware online

retailing

All the activities directly related to the sale of goods and services to the ultimate consumer for personal, nonbusiness use. ex. when we shop for groceries, hairstyling, clothes, books, and many other products and services

franchisee

An individual or business that is granted the right to sell another party's product.

factory outlet

An off-price retailer that is owned and operated by a manufacturer.

visual factors

Colors can create a mood or focus attention and therefore are an important factor in atmosphere. Red, yellow, and orange are considered warm colors and are used when a feeling of warmth and closeness is desired. Cool colors like blue, green, and violet are used to open up closed-in places and create an air of elegance and cleanliness. For example, Starbucks uses an eggplant, golden yellow, and dark olive color combination so that customers will feel comfortable yet sophisticated

fixture type and density

Fixtures can be elegant (rich woods), trendy (chrome and smoked glass), or consist of old, beat-up tables, as in an antiques store. The fixtures should be consistent with the general atmosphere the store is trying to create. Apple has let its focus on design inform the look of its retail stores. Many Apple stores contain a signature glass staircase designed in part by CEO Steve Jobs, and all use large open tables to display company products. Because products are not cluttered on store shelves, it is easier for store visitors to play with them.

warehouse membership clubs

Limited-service merchant wholesalers that sell a limited selection of brand-name appliances, household items, and groceries on a cash-and-carry basis to members, usually small businesses and groups.

merchandise type and density

The type of merchandise carried and how it is dis- played add to the atmosphere the retailer is trying to create. A prestigious retailer like Saks or Bloomingdale's carries the best brand names and displays them in a neat, uncluttered arrangement. Discounters and off-price retailers, such as Marshalls and T.J. Maxx, may sell some well-known brands, but many carry seconds or out-of-season goods.

personnel and customer service

People are a unique aspect of retailing. Most retail sales involve a customer-salesperson relationship, if only briefly. When customers shop at a grocery store, the cashiers check and bag their groceries. When customers shop at a prestigious clothier, the salesclerks may help select the styles, sizes, and colors. They may also assist in the fitting process, offer alteration services, wrap purchases, and even offer a glass of champagne. Sales personnel provide their customers with the amount of service prescribed in the retail strategy of the store.

independent retailers

Retailers owned by a single person or partnership and not operated as part of a larger retail institution.

interactivity

Small retailers as well as national chains are using interactivity in stores to differentiate themselves from the competition. For some time, retailers have used "entertainment" retailing in the form of playing music, showing videos, hosting special events, and sponsoring guest appearances, but the new interactive trend gets customers involved rather than just catching their eye. For example, at the American Girl store in Chicago, customers can purchase a doll made to look like them, take their dolls to the in-store American Girl café, go to the American Girl Theater, and even have their birthday parties. Another example is Build-A-Bear

category killers

Specialty discount stores that heavily dominate their narrow merchandise segment.

chain stores

Stores owned and operated as a group by a single organization.

destination stores

Stores that consumers purposely plan to visit.

direct marketing (direct-response marketing)

Techniques used to get consumers to make a purchase from their home, office, or another nonretail setting.

pop-up shops

Temporary retail establishments that allow flexible locations without the long-term commitment of a more expensive retail lease. ex. Italian coffee maker illy opened a pop-up shop at Time Warner Center in New York for ten days. In addition to selling coffee, the illy shop, created from a shipping container, offered free samples from the company's soon-to-be-released Hyper Espresso System machine. Toys "R" Us opened a 25,000-square-foot tempo- rary store in the former Tower Records building during the Christmas shopping season. Wired magazine

gross margin

The amount of money the retailer makes as a percentage of sales after the cost of goods sold is subtracted.

product offering

The mix of products offered to the consumer by the retailer; also called the product assortment or merchandise mix.

franchisor

The originator of a trade name, product, methods of operation, and so on, that grants operating rights to another party to sell its product.

atmosphere

The overall impression conveyed by a store's physical layout, décor, and surroundings.

franchises

The right to operate a business or to sell a product.

direct retailing

The selling of products by representatives who work door-to-door, office-to-office, or at home parties.

scrambled merchandising

The tendency to offer a wide variety of nontraditional goods and services under one roof.

sound

can be pleasant or unpleasant for a customer. Classical music at a nice Italian restaurant helps create ambience, just as country-and-western music does at a truck stop. Music can also entice customers to stay in the store longer and buy more or eat quickly and leave a table for others. For instance, rapid music tends to make people eat more, chew less, and take bigger bites, whereas slow music prompts people to dine more leisurely and eat less.

M-Commerce

enables consumers using wireless mobile devices to connect to the Internet and shop ex. both PepsiCo and Coca-Cola have developed smart vending technologies that utilize a "cashless" payment system that accepts credit cards, RFID devices, and even hotel room keys. Offices across the country are installing self-serve coffee machines where office workers can buy freshly brewed single-cup gourmet coffee and conveniently pay with their traditional magnetic stripe credit or debit cards. Another example could be apple pay.

electronic retailing

includes the 24-hour, shop-at-home television networks and online retailing.

new developments in retailing

interactivity and m-commerce

employee type and density

refers to an employee's general characteristics—for instance, neat, friendly, knowledgeable, or service-oriented. Density is the number of employees per thousand square feet of selling space. A discounter like Kmart has a low employee density that creates a "do-it-yourself," casual atmosphere.

orders

smell can either stimulate or detract from sales. The wonderful smell of pas- tries and breads entices bakery customers. Conversely, customers can be repulsed by bad odors such as cigarette smoke, musty smells, antiseptic odors, and overly power- ful room deodorizers. If a grocery store pumps in the smell of baked goods, sales in that department increase threefold. Department stores have pumped in fragrances that are pleasing to their target market, and the response has been favorable