He has published over 50 articles in leading marketing and logistics journals, including Journal of Retailing, Journal of Marketing, Journal of the Academy of Marketing Science, and Journal of Marketing Research. He serves on the editorial review boards of the Journal of Retailing, the Journal of Marketing, the International Journal of Research in Marketing, and the Journal of Marketing Research.
PREFACE
NEW TO THE TENTH EDITION
Chapter 16, "Store Layout, Design, and Visual Merchandising," begins with the story of Bergdorf Goodman's New York City renovation and its quest to combine classic luxury and modern (social media) chic. New Retail views cover the importance of function and experience for customers at Saks Vyfdelaan's new stores and its Off 5th outlet stores; the interesting ways in which retailers cater to customers' impulse purchases; and retailers' use of scents to attract customers.
A LETTER FROM THE AUTHORS
Page xiii The issues associated with using a mobile channel and providing a seamless multichannel experience for customers. A standing assignment exercise is included so that students can complete an exercise involving the same retailer during the course.
ACKNOWLEDGMENTS
Joseph Cronin Jr
Elmgren
BRIEF CONTENTS
THE WORLD OF RETAILING
RETAILING STRATEGY 5 Retail Market Strategy 120
MERCHANDISE MANAGEMENT
HUMAN RESOURCES AND STORE MANAGEMENT 15 Human Resources and Managing the Store 398
CASES Cases 482
CONTENTS
- CHAPTER 1 INTRODUCTION TO THE WORLD OF RETAILING 4
- TYPES OF RETAILERS 30
- CHAPTER 3 MULTICHANNEL AND OMNICHANNEL RETAILING 66
- CUSTOMER BUYING BEHAVIOR 84
Retail Vision 4.3: No More Smoke at CVS 103 Criteria for Evaluating Market Segments 104 Approaches to Segmenting Markets 105.
RETAILING STRATEGY
- RETAIL MARKET STRATEGY 120
- FINANCIAL STRATEGY 154
- RETAIL LOCATIONS 176
- RETAIL SITE LOCATION 200
- CHAPTER 9 INFORMATION SYSTEMS AND SUPPLY CHAIN MANAGEMENT 226
- CHAPTER 10 CUSTOMER RELATIONSHIP MANAGEMENT 250
- CHAPTER 11 MANAGING THE MERCHANDISE PLANNING PROCESS 272
- BUYING MERCHANDISE 312
- RETAIL PRICING 340
- RETAIL COMMUNICATION MIX 366
Retail View 13.2: The Rising Cost of Play: New Disney and Universal Theme Park Deals and Pricing 347. Retail View 14.1: Enticing Shoppers to Stop on Site, Even If Just for a Quick Read 370.
SECTION IV HUMAN RESOURCES AND STORE MANAGEMENT
CHAPTER 15 HUMAN RESOURCES AND MANAGING THE STORE 398
Organizational Structure of a Retail Business 416 Organization of a Single-Store Retailer 416 Organization of a National Retail Chain 418 Legal Issues in Human Resource Management 420 .
CHAPTER 16 STORE LAYOUT, DESIGN, AND VISUAL MERCHANDISING 426
CUSTOMER SERVICE 460
CASES
CHAPTER 1 | Introduction to the World of Retailing
LEARNING OBJECTIVES
In contrast, Walmart's dominance is based on its reputation for low prices and its excellent distribution network to stores. Finally, perhaps most importantly, Walmart's managers develop and implement strategies to guide their decisions and provide good returns to shareholders, even as they face intense and increasing competition in retail markets.13.
WHAT IS RETAILING?
The Retailer’s Role in a Supply Chain
Retailers Create Value
For example, retailers offer credit so consumers can get a product now and pay for it later. Retailers add value by offering a selection of products that customers can buy in one place when they want them.
Costs of Channel Activities
A t-shirt will not meet the needs of a college student who wants something to wear to a basketball game tonight. A student finds the shirt more valuable and will pay more for it if it is available at a nearby department store that also sells pants, belts, and other items to complement the shirt and has sales associates who can help the student find one she or he likes.
Retailers Perform Wholesaling and Production Activities
Stores like IKEA and Zara are almost completely vertically integrated, as they manufacture and distribute most of the products they sell in their stores. IKEA is almost completely vertically integrated, as it produces and distributes most of the products it sells in its stores.
Differences in Distribution Channels around the World
However, there is a large disparity between the distribution system in the eastern coastal tier-one cities – Beijing, Shanghai and Guangdong – and the smaller western cities. The retail offering in the first-tier cities is very similar to the urban shopping environment in the US.
ECONOMIC AND SOCIAL SIGNIFICANCE OF RETAILING
Role in Developed Economies
Role in Developing Economies—The Bottom of the Pyramid
Retailers must also focus on the opportunities available by serving the needs of the 3 billion people who live at the bottom end of the income distribution. The sheer size and growth of BoP markets, particularly in emerging economies such as China, India and Brazil, coupled with maturing consumer goods and retail markets in developed economies is motivating companies to enter the BoP market.
Role in Society
RETAILING VIEW Retailing at the Bottom of the Pyramid
And if the consumer can't load enough money onto her phone one day, she could be without electricity until she can top up her mobile account with money again, without the risk of damaging her credit or losing access to her account. Sub-Saharan Africa represents about 70 percent of the world's poor population, but nearly 65 percent of these households have access to at least one mobile phone.
Consideration of stakeholders and their interdependence. Retailers that embrace the notion of conscious marketing consider how their
Sources: Heidi Vogt, “Making Change: Mobile Pay in Africa,” The Wall Street Journal, January 2, 2015; Pew Research Center, “Mobile Phones in Africa: Communications Lifeline.” A conscious marketing approach implies that the company's leaders are a conscious marketing approach. The marketing approach means that the company's leaders are committed to the idea of being conscious at all levels of the company, across the culture.
The understanding that decisions are ethically based. Retailers that are engaged in conscious marketing make decisions that are based on
- RETAILING VIEW Whole Foods and John Mackey: The Birth of the Organic
Through decentralized decision-making units, Whole Foods stores could choose to stock items specifically tailored to the preferences of local markets, such as live lobsters in Portland, Maine, or a kombucha bar in Venice, California. The Conscious Capitalist,” Fortune, August John Mackey: Co-Chief Executive Officer and Co-Founder,” Whole Foods Market.
THE GROWING IMPORTANCE OF RETAILING AND RETAILERS
Evolution of the Retail Industry
The development of information systems is one of the forces facilitating the growth of large retail firms—the shift from an industry dominated by small local retailers to large multinational chains. Before these systems were developed, it was difficult for anyone other than the local store manager to track how merchandise was selling in the store—if it was selling more than expected and needed to reorder, or if it was selling below expectations and needed to lower the price. her.
Role of Information Systems
When in-store inventory levels fall below a predetermined level, an electronic notification is automatically sent authorizing shipment of more units to the retailer's distribution center and then to the store. The scanning of the onions at the POS terminal at the cash register in the grocery store sets in motion a chain of activities that ensures that the store does not run out before the next order arrives.
MANAGEMENT AND ENTREPRENEURIAL OPPORTUNITIES
Management Opportunities
Retailers thus employ people with expertise and interests in finance, accounting, human resource management, supply chain management and computer systems, as well as management and marketing. After completing a management training program, retail managers can double their starting salary in three to five years if they do well.
Entrepreneurial Opportunities
RETAILING VIEW Jeff Bezos, Founder of Amazon
Those who work with him say that "he has become a leader of leaders" who empowers those around him while emphasizing the importance of a customer focus and forward thinking. The sheer size of Amazon and the two other companies he runs necessitates this kind of leadership, although Amazon board members say he was at the center of it all at the beginning and "the leadership was Jeff Bezos." Bezos also acquired the Washington Post in 2013 and developed an aerospace company, Blue Origin, which launched its first rocket into suborbit in November 2015.
THE RETAIL MANAGEMENT DECISION PROCESS
Understanding the World of Retailing—Section I
Cross-branding increases cross-brand competition or competition between retailers selling similar goods using different types of retail outlets, such as drugstores and department stores. For example, the manager of the women's sportswear department of Saks Fifth Avenue in Bergen County, New Jersey, sees the other specialty women's sportswear stores in the Riverside Square mall as her main competitors.
Developing a Retail Strategy—Section II
Toys "R" Us focuses on children's toys and clothing, while Walmart's strategic focus is much broader. The nature of a retail strategy can be illustrated by comparing the strategies of Walmart and Toys "R" Us.
Implementing the Retail Strategy—Sections III and IV
SUMMARY
- Identify retailing activities
- Realize the importance of retailing in the U.S
- Analyze the changing retail industry
- Recognize the opportunities for you in retailing
- Understand the strategic retail management decision process
The strategic decisions, which are discussed in the first half of this textbook, involve the selection of a target market; define the nature of the retailer's offer; and building a competitive advantage through locations, information and supply chain management systems and customer relationship management programs. The merchandising and store management decisions for implementing the strategy, discussed in the second half of this handbook, involve selecting a merchandise assortment, purchasing merchandise, setting prices, communicating with customers, managing the store, the presentation of merchandise in stores and the provision of customer service.
KEY TERMS
GET OUT AND DO IT!
- CONTINUING CASE ASSIGNMENT In most chapters of this textbook, there will be a GET OUT AND DO IT!
- GO SHOPPING Visit a local retail store, and describe each of the elements in its retail mix
- INTERNET EXERCISE Go to the home pages of Macy’s, Target, Walmart, Toys “R” Us, and the National Retail
- INTERNET EXERCISE Go online to the websites of Whole Foods or The Container Store. In a brief paragraph,
Some examples of retailers that meet the first two criteria are Whole Foods Market, Dress Barn, Burlington Coat Factory, Ross Stores, Ann Taylor, Cato, Finish Line, Foot Locker, Brookstone, Claire's, Walgreens, Staples, Office Depot, American Eagle Outfitter , Pacific Sunwear, Abercrombie &. GO SHOPPING Visit a local retail store and describe each of the elements in its retail mix. of elements in its retail mix. Retail area available on the US Census Bureau website at: available on the US Census Bureau website at:.
DISCUSSION QUESTIONS AND PROBLEMS
Retail offers a variety of career paths such as purchasing, store management, sales promotion and advertising, human resources, operations/distribution, real estate, loss prevention, and finance. In addition, retail offers almost immediate responsibility for talented people, so they can rise to key management positions fairly quickly.
CAREER OPPORTUNITIES
When students asked Dave Fuente, former CEO of Office Depot, what they needed to become a CEO one day, he replied, "You have to have profit and loss responsibility and experience managing people early in your career." Entry-level retail jobs for college graduates offer both of these options. The primary entry-level opportunities for a retail career are in purchasing and store management.
Store Management
Store management includes all the disciplines necessary to run a successful business: sales planning and goal setting, overall store image and merchandise presentation, budgets and expense control, customer service and sales supervision, administration and human resource development and community relations. The typical entry-level store management position is a department manager with responsibility for merchandise presentation, customer service, and inventory control for an area of the store.
Merchandise Management
The typical entry-level position for graduates interested in merchandise management is assistant buyer or assistant planner in a merchandise category such as men's athletic shoes or consumer electronics. From this entry-level position you could be promoted to buyer and then to divisional merchandise manager, responsible for a number of merchandise categories.
Corporate Staff
Store Design Employees working in this area are responsible for the design of the store and the presentation of merchandise and equipment in the store. Human Resource Management Human resource management is responsible for the effective selection, training, placement, advancement and welfare of employees.
ATTRACTIVENESS OF RETAILING CAREERS
Real Estate Employees in the real estate division are responsible for selecting locations for stores, negotiating leases and land purchases, and managing rental costs. As there are seasonal peaks in retail sales (such as Christmas when many additional people need to be hired), the HR staff must be flexible and highly efficient.
Immediate Responsibility
Entry-level positions for faculty are typically management trainees in a purchasing or sales organization, not sales associates. More than 150 colleges and universities in the United States offer degree programs and degrees or majors in retailing.
Financial Rewards
While some employees are promoted based on their retail experience, a college degree is required for most retail management positions, ranging from store manager to CEO. As a result, in addition to their salaries, retail managers are generally given strong monetary incentives based on the sales they create.
Opportunities for Advancement
Two additional benefits of retail careers are that most retailers offer employees valuable discounts on the items they sell, and some buying positions include extensive overseas travel.
CHAPTER ENDNOTES
CHAPTER 2 | Types of Retailers
With these strategic considerations, Sam's Club clearly goes well beyond the traditional warehouse club model. Sam's Club believes in this by claiming digital leadership in the warehouse club market.
RETAILER CHARACTERISTICS
Four elements of the retail mix are particularly useful in classifying retailers: the type of goods and/or services offered, the variety and variety of goods offered, the level of customer service, and the price of the merchandise.
Type of Merchandise
Variety and Assortment
Retailers may offer the same goods but differ in the variety and range of goods offered. Toys “R” Us has a wide variety of items besides bicycles, but the bicycle selection is narrow.
Services Offered
Prices and Cost of Offering Breadth and Depth of Merchandise and Services
RETAILING VIEW Amazon: Retailing in Every Category
Textbooks", Digital Trends, July 18, 2011; James Kendrick, “Amazon Debits Kindle Owner Lending Library,” ZDNet, November 3, 2011; Vanchi Govind, “Amazon.com Offers Free Cloud Computing Services,” InfoTech, November 3, 2010; Jeffrey A. York Times, 12 Apr. 2015; Laura Lorenzetti, "Amazon's Handyman Service Expands to 15 Cities," Fortune, July 22, 2015; Harriet Taylor, “Amazon, Google Move into On-Demand Home Services,” CNBC, October 1, 2015; Taylor Soper, "Amazon's dominance of online shopping starts with product searches, study shows," GeekWire, October 6, 2015.
FOOD RETAILERS
Sources: Economic Forecasting: Outlook to 2013 Food, Drug, Mass (Columbus, OH: . Retail Forward, November 2008); Economic Forecast: Outlook to 2013 Homegoods (Columbus, OH: Retail Forward, November 2008); Economic. Despite their similar large sizes, most of Walmart's food sales are generated from its supercenter format, while Carrefour gets most of them.
Supermarkets
Many conventional supermarkets have added services such as a tea tasting counter to better compete with other food retailers. Conventional supermarkets build on their strength in these categories and devote more space and attention to them.
Supercenters
Warehouse Clubs
Warehouse clubs like Costco are popular because they offer an unpredictable selection of high-quality goods at low prices. Warehouse clubs can offer low prices because they use low-cost locations, have cheap store designs, and offer little customer service; they also keep inventory costs low by having a limited selection of fast-selling items.
Convenience Stores
To increase convenience, convenience stores open smaller stores close to where consumers shop and work. Ease of access, in-store parking and quick entry and exit are key benefits the stores offer.
Online Grocery Retailers
RETAILING VIEW How FreshDirect Figures Out How and When Customers Order
However, during the work week, they use computers largely, suggesting that they order from their desks during their lunch breaks or in the middle of their work day. FreshDirect adapts its online messaging because customers' orders vary based on the device they use, as well as where, when and through which channel they shop.
GENERAL MERCHANDISE RETAILERS
Department Stores
RETAILING VIEW Making Macy’s Meaningful in Multiple Channels
Macy's customers interact with the large screens of the Look Book, which is a kind of digital catalog in the store, finding fashion ideas, ways to expand their existing wardrobes and images from forward-thinking fashion icons. To remain competitive, Macy's must leverage its multiple channels and exploit its omni-channel potential to the fullest extent.
Full-Line Discount Stores
Target has teamed up with well-known designers like Marimekko to improve its "affordable chic" image. In its GO International campaign, the retailer has collaborated with such well-known designers as Missoni, Stefani, Harajuku Mini, Marimekko, Albertus Swanepoel and Josie Natori.42.
Category Specialists
Competing category specialists like Lowe's and Home Depot, or Staples and Office Depot, have difficulty differentiating themselves in most elements of their retail mixes. Some category specialists are also experiencing strong competition from warehouse clubs like Sam's Club and Costco.
Specialty Stores
RETAILING VIEW How Sephora Has Revolutionized the Cosmetics Industry
In dedicated stores, usually conveniently located in local shopping malls or malls, Sephora creates in-store experiences that allow consumers to play with products, from private labels to trendy national brands, within a store design that it's hip and fun. Sephora creates in-store experiences that allow consumers to play with products, from private labels to trendy national brands, within store designs that are hip and fun.
Drugstores
Local stores seek to meet local needs, such that New England-area Goodwill stores host annual wedding dress sales and the Suncoast division in Florida maintains a grocery department.52. A recent study showed that the same selection of goods costing $144.65 at a supermarket would set customers back $168.96 at a nearby drugstore.58.
Extreme-Value Retailers
Dollar General is a great value retailer that offers a wide but shallow selection of home goods, health and beauty products, and groceries. Vendors such as Procter & Gamble often create special, smaller packages for extreme value retailers.
Off-Price Retailers
To improve the consistency of their offering, some discount retailers supplement their opportunistically purchased merchandise with merchandise purchased at regular wholesale prices. The online twist to off-price retail comes from thrift sites like Gilt, Rue La La, and HauteLook.
SERVICE RETAILING
In addition to providing assistance from sales associates, they offer services such as gift wrapping, bridal registries and alterations. As we move to the right end of the continuum, we encounter retailers whose offerings are primarily services.
Differences between Service and Merchandise Retailers
However, the emphasis placed on merchandise versus service varies by store format, as shown in Figure 2-9. In addition to selling frames, glasses and contact lenses, optical centers provide important services such as eye exams and glasses adjustments.