Retailing and Etailing

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Retailing and E-tailing

• Business 1201, Fall 2006
• Dr. Katherine Gallagher

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Objectives

• To describe how retailers evolve over time
• To classify retailers by their selection of
  merchandise
• To understand the importance of store image to a
  retail positioning strategy
• To describe the opportunities of and the barriers
  to e-tailing
• To describe the major forms of non-store retailing

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Retailing

• all activities involved in selling goods or
  services directly to final consumers for their
  personal, non-business use
• the final stop in the distribution channel
• Trivia
• One in eight Canadian workers is employed in
  retailing
• Retail sales represent 6.2 of Canadas GDP
• 75 of retailers are independent small businesses

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The Evolution of Retailing

• The wheel of retailing hypothesis
• The retail life cycle
• Introduction
• Growth
• Maturity
• Decline

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The Evolution of Retailing

• Whats in store for the future?
• Demographics
• Convenience for working people
• Catering to specific age segments
• Recognizing ethnic diversity

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The Evolution of Retailing

• Whats in store for the future?
• Technology
• Talking posters
• Wireless networks (no check-out lines)
• Individualized buying profiles
• Holographic imaging (no trying on clothes)
• Body scanners (individually tailored clothing)
• Globalization

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Merchandise Mix

• Merchandise breadth
• Merchandise depth
• Scrambled merchandising
• Must balance profitability with enough depth and
  breadth to satisfy customers
• Inventory turnover

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Types of Stores

• Convenience stores
• Supermarkets
• Specialty stores
• General merchandise discount stores
• Off-price retailers
• Warehouse clubs
• Factory outlet stores
• Department stores

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Store Positioning StrategyRetailing as Theatre

• Store image
• Atmospherics use of color, lighting, scents,
  furnishings, sounds, etc. to create a desired
  setting
• Store design setting the stage
• Store layout and traffic flow
• Fixture type and merchandise density
• Music
• Color and lighting

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Store Positioning StrategyRetailing as Theatre

• Store image
• Store personnel the actors
• Pricing policy the cost of a ticket to the show
• Price points
• EDLP

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Store Positioning StrategyRetailing as Theatre

• Store location building the theatre
• Types of store locations
• Business districts
• Shopping centres
• Free-standing retailers
• Non-traditional store locations

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Store Positioning StrategyRetailing as Theatre

• Store location building the theatre
• Site selection
• Area evaluation
• Long term population patterns
• Location of competitors
• Demographic makeup of an area
• Fit with firms growth strategy
• Site evaluation

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E-tailing and Other Non-Store Retailing

• E-tailing
• The sizzle vs the steak
• Canada is slow cf the US
• Who shops online?
• Profile of online shoppers is the same as other
  shoppers
• Teenagers 85 use Internet regularly but only
  10 have purchased online
• Why do they shop online?
• 6Cs cost. choice, convenience, customization,
  communication, control

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E-tailing and Other Non-Store Retailing

• E-tailing
• Products with best potential
• Straight rebuys
• Commodities
• Low-touch products
• Products with high retail margins
• Products that can be customized
• Products that are expensive to inventory
• Products that invite comparison shopping
• Items that are difficult to find

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E-tailing and Other Non-Store Retailing

• E-tailing
• Success factors
• Branding
• Building customer loyalty
• Scalability
• Barriers to success
• No instant gratification for customers
• Need for touch--feel information for many
  products
• Security concerns
• Cannibalization of store sales
• Price competition

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E-tailing and Other Non-Store Retailing

• Direct marketing
• Mail order
• Catalogues
• Direct mail
• Direct selling
• Door-to-door sales
• Parties and networks
• Pyramid schemes illegal
• Telemarketing
• Automatic vending

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E-tailing and Other Non-Store Retailing

• Direct-response TV
• Infomercials
• Home shopping networks

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Summary

• Retailing selling products to consumers for
  personal use
• Demographics, technology and globalization
  motivate retailers to change
• Retailers can be classified by their selection of
  merchandise
• Store image is the result of many elements
  working together to create a desirable shopping
  experience (esp. cf. competitors)
• E-tailing removes geographic barriers, but there
  are lots of issues that need to be resolved
• In addition to e-tailing, there are several other
  forms of non-store retailing