Retailing Chaper 2 - Types of Retailers

Convenience Stores

limited variety of assortment at convenient locations (2000-3000 sq. ft.) (local stores)

SKU

Stockkeeping Unit - different style within each assortment

retail chain

a company that operates multiple retail units under common ownership and usually has centralized decision making for defining and implementing strategy

catalog retailing

a non-store retail format which the retail offering is communicated to a customer through a catalog. (JC Penny, Sears)

multi-level network

about 80% of all direct selling some from multi-level networks in which people serve as master distributors, recruiting other people to be a part of their network

Channel

all the different ways retailers use to talk to their customers

Limited Assortment Supermarkets

also called extreme value food retailers only stock 1,250 SKUs

Third Tier retailers

JC Pennys, Khols, Sears

Second Tier retailers

Macy's

First tier retails

Neiman Marcus, Norstroms, Saks

NAICS code

North American Industry Classification System

Warehouse clubs

are retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small business (Sams, Costco)

category specialists

big box discount stores that offer a narrow but deep assortment of merchandise (office depot, Bass Pro)

Home improvement center

category specialist offering home improvement equipment and material (Lowes,Home Depot)

Hypermarkets

combination food and general merchandise stores. Wal-mart is really the only close one in the US

direct mail retailers

communicate with their customers using letter and brochures. A non-store retailer.

Specialty stores

concentrate on a limited numver of complimentary merchandise categories and provide a high leverl of service (sephora, bass pro, luxury goods, Hot Topics)

Super-centers

fastest growing retail category that combine a supermarket with a full-line discount store. 150K-200K square feet (meijer, Wal-mart, Kmart, Target)

service retailers

firm that sells service rather than merchandise (car, laundromat, dry cleaner)

direct-response advertising

includes advertisements in TV and radio that describe products and provide an opportunity for consumers to order them (FRA)

direct selling

is a retail format in which salespeople, contact customers directly in a convienent location and demonstrate merchandise benefits, take orders, and deliver the product (AVON, pampered chef)

Outlet stores

off-price retailers owned by manufacturers or department stores chains

factory outlets

off-price retailers owned by the manufacturers or departments typically found in outlet malls

Closeout retailers

off-price retailers that sell a broad but inconsistent assortment of general merchandise as well as apparel and soft home goods (Bog Lots, Odd Lots)

off-price retailers

offer inconsistent assortment of brand name merchandise (TJ MAXX, Marshals)

television home shopping

retail format in which customers watch a TV program that demonstrates merchandise and then place orders by telephone

Full-line discount stores

retailer that offer a broad variety of merchandise, limited service, low prices (Kmart, Target, Wal-mart)

Department Stores

retailers that carry broad variety and deep assortment, offer customer service, and organize their stores into distinctly separate departments for displaying merch. (macy's, penny's, saks)

Conventional supermarket

self-service food store offering groceries, meat, and produce with limited sales of non-food items. Carry about 30,000 SKU's (Kroger, Publix, Safeway)

Wholesalers sell to...

sells to business

Retailers sell to...

sells to end users

efficient customer response (ECR)

set of programs used to increase efficiency in the store and reduce prices. Includes just-in-time inventory

extreme value retailer

small, full-line discount stores that offer limited merchandise assortment at very low prices (dollar general, family dollar)

Drug stores

specialty store that concentrates on health (CVS, walgreens)

Category killers

specialty stores that dominate a specific category in the industry. EX: Bass Pro Shop ruins all small fishing shops

"power perimeter"

the area of merchandise on the outside walls that include fresh merchandise, dairy, meats, baked goods. High traffic and profitable.

variety

the number of categories offered EX: shoes, handbags, dresses, accessories, small leather goods

Assortment

the number of different items in each category/ EX: (Shoes) sandals, flats, boots, pumps, heels

How are retailers differentiating their offerings?

1. emphasizing fresh perishables 2. targeting health-conscious and ethnic consumers 3. providing a better in-store experience 4. offering more private label brands

4 differences in the nature of the offering provided by the services and merch retailers:

1. intangibility 2. simultaneous production and consumption 3. perishability 4. inconsistency of the offerings to customers

party plan system

30% of all direct selling come from this multi-level selling, sales people encourage customer to act as hosts and invite friends to a "party"