Chapter 15 Retailing Role of Retailing Retailing all the activities directly related to the sale of goods and services to the ultimate consumer for personal non business use over 1 6 million retailers employ 24 million people retailers account for 11 6 of all US employment retailing accounts for 13 of US business Retailers ring up almost 4 Trillion in sales almost 40 of US GDP industry is dominated by a few giant organizations such as Wal Mart stress value to attract customers offer unique value propositions prices customer services loyalty programs use innovative marketing concepts that will resonate with customers green emphasis appeal to time strapped customers with multi channel shopping experience Classifying Retailers ownership Independent retailers owned by a single person or partnership and not part of a larger retail institution Chain stores owned and operate as a group by a single organization previously determined by having 11 stores Franchises the right to operate a business or sell a product level of service self service factory outlets warehouse clubs btwn self full service discount stores full service exclusive stores product assortment Type of Retailer Department Store Specialty Store Supermarket Convenience Store Drugstore Full Line Discounter Specialty Discounter Warehouse Club Off price Retailer Restaurant price Service Level Mod Hi High High Low Low Low Mod Mod Low Mod Low Low Low Low Mod Assortment Broad Narrow Broad Med Narrow Medium Med Broad Med Broad Broad Med Narrow Narrow Price Mod High Mod High Moderate Mod High Moderate Mod Low Mod Low Low Low Very low Low Low High Gross Margin Mod High High Low Mod High Low Mod Low Mod Low Low Low Low High gross margin the amount of money the retailer makes as a percentage of sales after the Cost of Goods sold is subtracted Major Types of Retail Operations department stores shopping specialty goods specialty stores distinctive products customer services supermarkets food products drug stores convenience stores high turnover goods discount stores medications health beauty cosmetics specialty full line discounters retailer offering customers very limited service and carrying a broad assortment of well known nationally branded hard goods specialty discount stores category killers specialty discount stores that heavily dominate their narrow merchandise segment warehouse clubs off price discount retailers Ex Marden s in Maine supercenter retail store combining groceries and general merchandise goods with a wide range of services mass merchandising retailing strategy using moderate to low priced on large quantities of merchandise and lower service to stimulate high turnover for products door to door office to office home sales parties becoming new opportunities for trials restaurants Nonstore Retailing automatic vending direct retailing direct marketing direct mail catalogs mail order telemarketing electronic retailing electronic retailing Franchising product trade name franchising business format franchising Retail Marketing Strategy define select target market dealer agrees to selling products provided by a manufacturer or wholesaler an ongoing business relationship between franchiser a franchise 1 Segment market demographics geographics psychographics 2 Determine competitors develop the 6 P s 3 Choose the retailing mix Product Product offering the mix of products offered to the consumer by the retailer aka product assortment or merchandise mix Width depth of product assortment Place Location hours Choosing a community economic growth potential competition geography Choosing a site freestanding store shopping center mall 1 Neighborhood socioeconomics traffic flows land costs zoning regulations public transportation sites visibility parking entrances exits accessibility safety Promotion advertising public relations publicity sales promotion Price Low prices good value single price point EDLP High prices quality image Presentation Atmosphere the overall impression conveyed by a store s physical layout d cor and surroundings Employee type density merchandise type density fixture type density sounds odors visual factors Personnel trading up suggestion selling Customer service personal selling New Developments in Retailing interactivity consumers are involved in the retail experience M commerce purchasing goods through mobile devices