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Retailing: Bricks and Clicks

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(1)
(2)

Chapter Objectives

• Define retailing

(3)

Chapter Objectives

• B2C e-commerce

its benefits, limitations, and future

promise

• store image

positioning strategy

creating a desirable image in the

(4)

Retailing: Special Delivery

Retailing:

• the process by

which goods and

(5)

Retailing: Special Delivery

The retailer adds/subtracts value from the offering

• with its image, • inventory,

• service quality, • location, and

• pricing policy.

(6)

Retailing: A Mixed (Shopping) Bag

• Retailing is big business:

(7)

Retailing: A Mixed (Shopping) Bag

• Retailers

= final channel of distribution,

• providing

utilities

to customers

time,

place, and ownership.

(8)

The Evolution of Retailing

• The wheel-of-retailing hypothesis New types of retailers

• enter the market

• by offering lower-priced goods.

They gradually improve

• facilities, quality and

• assortment of merchandise, and amenities

(9)

The Evolution of Retailing (cont’d)

• The retail life cycle

Retailers are born, grow and mature, and eventually die or become obsolete.

 Introduction stage

(10)

The Evolution Continues:

What’s “In Store” for the Future?

• Demographics:

retailers must find new ways to sell to diverse groups.

(11)

The Evolution Continues: What’s “In Store” for the Future? (cont’d)

• Technology

Internet and e-tailing

Electronic point-of-sale (POS) systems

Cart-top computer

to scan purchases as customers move through store

RFID tags

(12)

The Evolution Continues: What’s “In Store” for the Future? (cont’d)

• Globalization

Need to adjust to different conditions

around the world

Innovative retailing concepts

developing overseas

(13)

Classifying Retail Stores

• what they sell:

merchandise mix

• level of service

Self-service Full-service

Limited service

(14)

Classifying Retail Stores (cont’d)

• Classifying by merchandise selection

Merchandise assortment:

selection of products a retailer sells

Merchandise breadth:

number of different product lines

Merchandise depth:

(15)
(16)

Classifying Retail Stores (cont’d)

• Retail Format

Convenience stores Supermarkets

Specialty stores Discount stores

Warehouse clubs

Factory outlet stores

(17)

Non-store Retailing

• Any method a firm uses • to complete an exchange

• that does not require

• a customer to visit a store

(18)

Nonstore Retailing (cont’d)

• Direct selling

Door-to-door sales

Party plan system

Multilevel network:

a master distributor recruits other people to become distributors

Illegal pyramid schemes:

people pay money to advance in company, profiting from others who might join

(19)

B2C E-commerce

• (B2C) e-commerce: • online exchange

(20)

B2C E-commerce

• Benefits of B2C e-commerce

Facilitates global marketplace exchanges Increases consumer convenience

fulfills experiential needs. For specialized businesses.price information available.

(21)

B2C E-commerce (cont’d)

• Limitations of B2C e-commerce Customers must wait

to receive products.

poorly designed Sites.

Security concerns.

Internet fraud

(22)

B2C E-commerce (cont’d)

More Limitations

• Firms need “bricks-and-mortar” presence

to maintain base of loyal customers.

• Developing countries with cash economies

(23)

B2C E-commerce (cont’d)

One More Limitation

• Online inventory • may cannibalize

• major retailer store sales.

(24)

B2C’s Effect on the Future of Retailing

• Virtual channels

unlikely to replace traditional ones.

• Stores must evolve

(25)

B2C’s Effect on the Future of Retailing

• In destination retail,

• consumers will visit stores • for total entertainment

experience.

MOA & amusement park

(26)

Retailing as Theater

• Store image:

• the way a retailer • is perceived

• in the marketplace

(27)

Retailing as Theater

• Store image:

• Atmospherics: the use of:

• color, lighting,

• scents, furnishings,

• sounds, other design elements

(28)
(29)

Store Image (cont’d)

• Store design: setting the stage

Store layout:

• arrangement of merchandise in store – determines traffic flow

– (grid layout vs. free-flow layout)

Fixture type

merchandise density sound of music

Color & lighting

(30)

Store Image (cont’d)

Store personnel:

should complement a store’s image

Pricing policy

Price points/ranges

(31)

Retailing as Theater (cont’d)

• Store

location

Types of store locations

Business districts

Shopping centers

Freestanding retailers

(32)

Retailing as Theater (cont’d)

• Store location (

Site selection

)

Store’s trade area:

– geographic zone that accounts for the majority of its sales and customers

Primary – Secondary - Tertiary

• Saturated trade area

(33)

TOP RETAILERS

www.stores.org

Top 100 retailers (U.S)Top 200 global retailers

Retailer of the yearNRF conference

(34)

Non-traditional retailing

• Tourism retailing

Souvenir shops

• Museums, events, resorts

Shopping trips

• MOA, Dallas, New York City

• Secondary retailing

Garage sales

(35)

The end

(36)

Real People, Real Choices

• Eskimo Joe’s (Stan Clark)

• A new Oklahoma law raised the legal drinking age from 18 to 21.

• How to ensure that Eskimo Joe’s would survive the new law?

 Option 1: convert the beer bar into a full-service restaurant.  Option 2: continue operating as a beer

 bar and offset declining beer sales  with an increase in apparel sales.  Option 3: close Eskimo Joe’s bar

(37)

Real People, Real Choices

• Eskimo Joe’s (Stan Clark)

• Stan chose option 1: convert the beer bar to a full- service restaurant focused on selling great food.

The success was immediate, and Stan credits the result with paying close attention to the quality of food and service.

(38)

Discussion

The wheel-of-retailing theory suggests the

retailer’s normal path is to enter the

marketplace with lower-priced goods and then increase quality, services, and prices.

--Why do you think this happens?

--Is it the right path for all retailers?

(39)

Discussion

Wal-Mart has become a dominant retailer in the U.S. marketplace, accounting for over 30

percent of the total sales of some products.

--Is this good for consumers?

(40)

Discussion

Department stores may be

declining in popularity in the United States but remain

the primary place to shop in other countries such as

Japan.

--Why do you think this is so?

(41)

Group Activity

• You and two friends decide to open a

combination coffee shop and bookstore near your college. To attract college students and other customers, you’ll need to carefully

design the store image.  --Develop a detailed plan that specifies how your group

will use atmospherics

(42)

Discussion

Experts predict a rosy future for B2C

e-commerce, with exponential increases in Internet sales of some product categories within a few years.

--What effect do you think the growth of e-retailing will have on traditional retailing?

(43)

Discussion

Pyramid scheme promoters recruit at

frenzied meetings that make potential members fearful of passing up a great opportunity if they don’t join.

--Why do people continue to be lured into these schemes?

(44)

Discussion

Macy’s and other stores use vending machines to sell electronics such as iPods.

List other opportunities for vending machine sales.

(45)

Group Activity

Your team are business consultants for a chain of 37 traditional department stores in 12

Midwestern U.S. cities.

The stores’ revenues have declined as specialty

stores and hypermarkets have begun to

squeeze them out. The chain has asked your group for suggestions to increase its business

(46)

Group Activity

• Your client is a local caterer planning to open a new retail outlet selling take-out gourmet

dinners.

• Your group of marketing consultants is examining locations: the central business

district, a shopping center, a freestanding entity, or a nontraditional location.

--Outline the advantages and disadvantages of each

(47)

Marketing Plan Exercise

• Think about a new retail venture, a

specialty store that sells timepieces such as men’s and ladies’ watches and clocks.

--What retailing strategies do you recommend for the first two years of the business—what merchandise, what store image, and what location(s)?

(48)

Marketing in Action Case: You Make the Call

• What is the decision facing IKEA? • What factors are important in

understanding this decision situation? • What are the alternatives?

• What decision(s) do you recommend? • What are some ways to implement your

Gambar

Figure 16.1: Classification of Retailers by mdse. Selection
Figure 16.2: Mapping a Store’s Personality

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