Chapter 2: Types of Retailers
What are the characteristics of Warehouse Clubs? (essay)
Offer limited and irregular assortment of food and general merchandise with little service at low prices, sell to individuals/small businesses, use low-locations, inexpensive store design, little customer service, low inventory holding costs by carrying a limited assortment of fast selling items. Ex: Sam's Club, BJ's, Costco, etc.
What are some characteristics of Extreme Value Retailing? (essay)
One of the fastest growing retail segments (Dollar tree, Dollar general), focuses on lower income consumers, broad variety and shallow assortments, names mostly imply good value not $1 price points, low cost location, limited services, more private label options and impulse buys, adding food services.
What is a Retailer Mix?
Retailers use different retail mixes: -Merchandise (variety and assortment) -Services -Store design, visual merchandising -Location -Pricing -Communication mix (ads) Ex: BJ's -> location, pricing, merchandise
What are some characteristics of Drug Store Retailing? (essay)
Specialty stores that concentrate on health and beauty care, drive thrus, etc. deep assortment, medium price, low/medium service.
What are the characteristics of a Convenience Store? (essay)
Tailors assortments to local market, makes more convenient to shop, offers fresh, healthy food, fast, casual restaurants, etc. Ex: 7Eleven, etc. Smaller, convenient, quicker, closer, gas, accessible, etc.
What is Variety (breadth)?
The number of Merchandise categories a Retailer offers. Broad or shallow. ex: Men's and women products
What is Assortment (depth)?
The number of different items/styles offered in a Merchandise category. Shallow or deep. ex: Shoes, boots, booties, flats, etc.
What are some Retailer Merchandise characteristics?
Variety (breadth) Assortment (depth) Stock Keeping Unit (SKU)
What is Omnichannel Retailing?
A multichannel approach to sales that seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store.
What are characteristics of Category Specialists? (essay)
Big-box stores; Narrow variety but deep assortment, Destination stores, Category killers, Low price and service, Intense competition, Wholesaling to business customers and retailing to consumers, Incredible growth Ex: Staples, ToysRUS, Best Buy, Party City, DSW, Barnes & Noble, Bath & Body, BBB, l.L. Bean, Dick's, PETCO, etc.
What are some characteristics of Department Store Retailing? (essay)
Broad variety, deep assortment, average to high customer service, merchandise displayed into distinct departments, etc.
What are some characteristics of a Full-Line Discount Store? (essay)
Broad variety/average assortment of merchandise, limited service and low prices., Both private and national brands Ex: Walmart, Target, etc. Walmart: low price and good value Target: more fashionable apparel Competition: category specialists (Staples, Best Buy, etc.)
What are some trends in Supermarket Retailing? (essay)
Competition -Supercenters -Warehouse Clubs -Convenience Stores -Extreme Price Retailers -Drug Stores Goal: To change consumption patterns -Time pressure, eating out more, meal solutions Moms used to shop, Blue Apron, etc.
What are some issues Department Store Retailing is facing?
Competition -discount stores on price -specialty stores on service, depth of assortment -fast-fashion stores on style and price (F21, H&M) Customers wait for sales to shop
What are characteristics of Specialty Stores? (essay)
Concentrate on limited number of complementary merchandise categories, narrow variety but deep assortments, high service, cater to specific market segments, sales associates expertise, most profitable and fastest growing firms, growing interest in resale stores. Ex: Crate & Barrel, Pottery Barn, H&M, Urban Outfitters, Zara, Zales, MAC, etc.
What are the characteristics of Supermarkets? (HYPERMARKET)
Conventional Supermarkets -Perishables (meats, dairy, produce, baked goods) account for 30% of their sales and have up to 30,000 SKUs. Ex: Price Chopper, Stop & Shop Limited Assortment Supermarkets -1500-2000 SKUs, offer 1 or 2 brands/sizes, designed to maximize efficiency/reduce costs, offer merchandise at 40-60% lower prices than conventional supermarkets Ex: Aldi
What is a Fast-Fashion Retailer? (essay)
Designs that move from catwalk quickly to capture current fashion trends. Ex: H&M, Zara, Peacocks, Primark, Xcel Brands, and Topshop, Forever21, etc.
What are Hard Goods?
Durable goods such as appliances, furniture and consumer electronics
What is a Stock Keeping Unit (SKU)?
Each different item of Merchandise -each SKU often has a unique identifying number/code associated with it.
What are the characteristics of Independent, Single Store Establishments (mom & pop stores)?
Entrepreneurial activity is extensive, wholesale-sponsored voluntary cooperative group, management has direct contact with customers, react quickly to market changes, etc. Hard to negotiate lower prices for products, limited capital and human resources, etc.
What are the characteristics of a Supercenter? (essay)
Fastest growing retail category, large stores (185,000 feet) that combine a supermarket with a FULL-LINE DISCOUNT STORE, one-stop shopping, high impulse purchases Ex: Walmart, Super Target, etc.
What are the 2 types of Merchandise Retailers?
Food Retailers: Supermarkets, supercenters, Warehouse clubs, convenience stores, etc. General Merchandise Retailers: Department stores, category specialists, drugstore, off-price retailers, etc.
What are the types of Retail Ownership?
Independent, Single Store Establishments, Corporate Retail Chains and Franchises.
What are the differences between Service and Merchandise Retailers? (essay question)
Intangibility: -problems in evaluating service quality & importance of customer evaluations Simultaneous production, delivery & consumption: -non-returnable, need to get it right first time, no mass production Perishability: -no inventory, must fill capacity Inconsistency of the Offering: -different each time, importance of HR management
What is Service Retailing?
Investing more in experiences rather than products Primarily sell services rather than merchandise. Ex: Travel, Hair salons, dry cleaners, hotels, fitness, movies, health care, insurance, etc.
What should Department Stores do if they have an Eroding Market?
Lower cost by reducing service (Macy's Private Label) Attempt to increase the amount of private label and exclusive merchandise they sell (JLo in Kohl's) Expand multichannel and social media presence
What are some general trends in Retailing?
New types of retailers (Nordstrom), Globalization (Levi's), growth in Services Retailing, growth in Omnichannel Retailers, and the increase of use of Technology to reduce cost (Kohl's Kiosk).
What are Soft Goods?
Non-durable consumer goods such as cosmetics and clothing
What are some characteristics of Off-Price Retailers? (essay)
Offer an inconsistent variety and assortment of brand name merchandise at low prices, brand name and designer labels, offer closeouts and irregulars, etc. Ex: TJMAXX, Marshall's, etc.
What are the characteristics of Corporate Retail Chains?
A company that operates multiple retail units under common ownership Has CENTRALIZED decision making for defining and implementing strategies Can range in size
What are the characteristics of a Franchise?
A contractual agreement in which franchisor (company) sells rights to use its business trademark, service mark, or trade name, to a franchisee for a one-time franchise fee and % of sales. -franchisee is responsible for hiring staff, setting up and operating store, 30-40% of US retail sales, typical franchising fee in US is 5-6%.