THE NATURE OF RETAILING

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THE NATURE OF RETAILING
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THE NATURE OF RETAILING

• What is Retailing
• Retail Careers and Job Skills
• The Retailer in the Channel of Distribution
• The Retailer as an Image Creator
• Retailers and the Marketing Concept
• A Retail Challenge The Right Merchandising Blend

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DEFINITIONS

• RETAILING is the business activity of selling
  goods and services to the final consumer
• RETAILER is any business which directs its
  marketing effort towards the final consumer for
  the purpose of selling goods or services -
• -greater than 50 of the total sales must
  be retail sales to be a retailer
• -many types of retailers
  
  

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CONTRASTING RETAIL AND WHOLESALE OPERATION

• RETAILERS
• Sell smaller product quantities on a more
  frequent basis
• Store facilities open to the general public
• Higher per unit price due to individual unit
  sales
• Almost exclusive reliance on one price policy
• Ultimate consumers makes initial sales contact
• Considerable emphasis placed on store atmosphere

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CONTRASTING RETAIL AND WHOLESALES OPERATION

• WHOLESALERS
• sell larger product quantities on a less frequent
  basis
• over-the-counter sales seldom made to general
  public
• lower per unit price due to bulk package sales
• more extensive use of variable price structure
• sales representatives make initial sales contract
• little or no emphasis on facility atmospherics

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RETAILING IS

• educational, exciting
• dynamic, demanding
• small town, big city
• local, regional, national, international
• the management of change
• the most imp link in the distribution channel
• a major economic force
• a significant area for career opportunities

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CHARACTERISTICS OF RETAIL CAREERS

• Many job opportunities in smallest towns or
  largest urban center
• High job security, even in times of economic
  stagnation
• Many opportunities for advancement
• Many opportunities for women
• Salaries vary significantly often low pay at
  start
• Skills gained in retailing are transferable to
  other job opportunities
• The downsides of retail careers are
• image problems
• constant evaluation

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JOB SKILLS NEEDED IN RETAIL

• 1. Merchandising
• buying
• supplier management
• selling
• relationship building
• advertising promotion
• display building

• 2. Operations
• warehousing
• receiving
• delivery
• security
• customer service
• store management

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JOB SKILLS NEEDED IN RETAIL

• 3.Sales Promotion
• advertising
• display
• publicity
• sales promo activities
• 4.Control
• asset management
• credit
• A/P, A/R, auditing
• data processing

• 5.Personnel
• recruiting
• selecting
• training
• compensation
• union issues

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RETAIL CHALLENGE

• You are given the job to head a committee to
  select a new president for a retail chain.
• Rank the following criteria on a scale of
  1-10(where 10 is high) on the importance of each
  criteria in evaluating candidates.
• 1. hard work 6. initiative
• 2. analytical skills 7. leadership
• 3. creativity 8.
  organization
• 4. decisiveness 9. risk taking
• 5. flexibility 10. stress
  tolerance

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RETAILERS ARE AN IMPORTANT LINK IN THE CHANNEL OF
DISTRIBUTION

• Retailer provide services for manufacturers
• buying
• selling
• assortment creating
• stocking
• delivering
• credit extending
• informing
• consulting
• transferring ownership

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RETAILERS ARE AN IMPORTANT LINK IN THE CHANNEL OF
DISTRIBUTION

• Retailers provide services for consumers
• buying
• selling
• bulk breaking
• assortment creating
• stocking
• delivering
• credit extending
• informing
• consulting
• transferring ownership

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RETAILER AS A PRODUCER/CONSUMER LINK

• Assortment Gap
• Quantity gap
• Space Gap
• Time gap
• Retailers create utility!!

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Retailers are intermediaries who are very
interested in channel relationships. Improved
channel relationships often involve forming
vertical marketing systems.
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VERTICAL MARKETING SYSTEMS

• Professionally managed and centrally programmed
  networks, pre-engineered to achieve operating
  economies and maximum market impact
• Allows the channel team to achieve technological,
  managerial, and promotional leverage
• Achieved through
• persuasive administrative powers
• legally binding contractual agreements
• partial or total ownership of channel
  members

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THE RETAILER AS AN IMAGE CREATOR

• Retailing is an image creating activity!!
• Image is a mental picture that forms in the human
  mind as a result of many different stimuli
• Retail image is the impression, personality, or
  mental picture that is called to mind when a
  consumer is asked to describe a particular retail
  organization
• Retail image is created by many components!!

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THE COMPONENTS OF A RETAIL IMAGE

• product factors
• service factors
• price factors
• location factors
• atmosphere factors
• layout and display factors
• communication factors

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RETAIL IMAGES ARE IMPORTANT BECAUSE

• 1. Simplify the consumers decision making and
  shopping process.
• 2. Attract shoppers who have a self image close
  to the retailers image.
• 3. Help segment consumer markets and improve
  targeting.
• 4. Differentiate the retailer from competing
  retailers and other businesses.

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THE PROBLEM OF RETAILING

• Must balance
• ability of the firms merchandising programs
  to meet the needs of targeted consumers
• With
• ability of the firms administrative plans to
  meet the retailers need to operate effectively
  and efficiently
• See Key Performance Measures for Retail
  Businesses

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RETAILERS IMPLEMENT THE MARKETING CONCEPT

• Retailers strive to sell customers what they want
  rather than what the retailer has bought
• Retailers who adopt the marketing concept are
  neither exclusively customer driven or profit
  driven, they seek a workable balance between
  these two goals.
• Relationship marketing and retention retailing
  are important concepts

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RETENTION RETAILING IS IMPORTANT

• 1. Most customers do not complain
• 60 90 switch stores/brands
• 2. Cost 5X more to attract a new customer than it
  does to retain an existing one
• 3. Customers become more valuable over time
• less wasted retail effort as retailer knows
  the customer and what s/he wants
• greater price advantage as customer is less
  price sensitive
• lower transactional cost
• lower communication costs

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THE RETAIL CHALLENGE IS TO OFFER THE RIGHT
MERCHANDISING BLEND

• the right product
• in the right quantities
• in the right place
• at the right time
• at the right price
• by the right appeal
• with the right service

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QUOTE FROM SAM WALTON FOUNDER OF WALMART

• For my whole retail career, I have stuck to
  one guiding principlegive your customers what
  they want, and customers want everything a wide
  assortment of good quality merchandise the
  lowest possible prices guaranteed satisfaction
  with what you buy friendly, knowledgeable
  service convenient hours free parking a
  pleasant shopping experience.
• You love it when you visit a store that
  somehow exceeds your expectations, and you hate
  it when a store inconveniences you, or gives you
  a hard time, or just pretends youre invisible.