FASHION RETAIL INDUSTRY Retailing Management 8th Edition Levy Weitz Chapter 1 Intro to the World of Retailing RETAILING Set of business activities that add value to products and services sold to consumers for personal family use High tech global industry highly competitive and rapidly changing environment Largest industry in terms of employment Management and entrepreneurial opportunities Global retailing around the world differs U S greatest retail density concentration of large retail firms RETAILER business that sells products services for personal use by consumers SUPPLY CHAIN set of firms that make and deliver goods and services to consumers WHOLESALERS engage in buying taking title to storing and physically handling goods in large quantities and reselling them in smaller quantities to retailers and other businesses wholesalers satisfy retailer needs retailers satisfy consumer needs VERTICAL INTEGRATION firm performs more than one set of activities in a channel i e retailer engages in wholesaling by operating own distribution center to supply its stores Victoria s Secret J Crew BACKWARD INTEGRATION retailers perform wholesaling and manufacturing activities i e operating warehouses FORWARD INTEGRATION manufacturers undertake retailing and wholesaling activities i e Lowes Walmart RETAILERS CREATE VALUE BY 1 Providing assortments of products services 2 Breaking bulk selling in smaller quantities from large wholesale quantities 3 Holding inventory availability for customers 4 Providing services CORPORATE SOCIAL RESPONSIBILITY CSR organization voluntarily takes responsibility for the impact of activities on employees customers community and environment 4 stages 1 Engage because of laws 2 Go beyond laws for short term financial gain 3 Responsibility because right thing to do 4 Social environmental responsibility affects well being of everyone Retailing Environmental Factors Macroenvironment technological social ethical legal political factors Microenvironment competitors and customers INTRATYPE COMPETITION competition between the same types of retailers INTERTYPE COMPETITION competition between retailers that sell similar merchandise using different stores SCRAMBLED MERCHANDISE retailers offer merchandise not typically associated with their type of stores i e drug stores discount stores RETAIL STRATEGY how retailers plan to focus their resources to accomplish objectives planning fot eh future Identifies 1 Target market 2 Nature of merchandise products services 3 How to build long term advantage over competitors KEY STRATEGIC DECISIONS for retailers involve defining their Information systems Location 1 Market 2 Financial status 3 4 5 Organization human resources structure 6 Supply chain organization 7 Customer relationships market strategy must be consistent with firm s financial objectives location important for consumers competitive advantage offering assortments of merchandise advantageous allows consumer to choose from a wide selection RETAIL MIX set of decisions retailers make to satisfy customers and influence purchasing decisions including 1 Types of products services 2 Pricing 3 Promotion and advertising 4 Merchandise display 5 Customer assistance 6 Location Retail Managers must decide How much what type of merchandise to buy What vendors to use how to interact with them How to promote and advertise Retail prices Store Managers must decide How to recruit select motivate employees How where merchandise will be displayed Nature of services to provide ETHICS principles governing individuals and companies that establish appropriate behaviors and indicate right from wrong Principles vary country to country Principles change over time Ethics are separate from laws crimes punishable by laws Code of ethics as guidelines for employees CHOICES when faced with ethical decisions Ignore personal values do what company says 1 2 Voice opinion to employer 3 Refuse to compromise your values