Channel participants: Retailers

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Channel participantsRetailers

• Module 2
• Chapter 3

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Lecture Overview

• What is retailing?
• Retailing functions
• History of retailing
• Retail classifications
• Retailing in Australia
• Trends in retailing
• Retail marketing decisions
• Selecting a retailing site

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What is retailing?

• business firms engaged primarily in selling
  merchandise for personal or household consumption
  and rendering services incidental to the sale of
  goods (Rosenbloom 1999, p. 55).

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Retailing functions

• Customer contact
• Promotion
• Information on customer demands and trends
• Breaking bulk and providing assortment
• Holding inventory close to the customer
• locational convenience
• Risk taking

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History of retailing

• barter - money-less exchange
• peddlers and trading posts
• 1700-1900 - industrial revolution
• mass production led to the general store
• 1852 - first department store in Paris Bon
  Marche
• 1880s - automatic vending machines

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• early 1890s - speciality stores, chain stores
  and supermarkets
• Post WWII - supply gt demand
• price cutting - discount stores, variety stores
• 1950s - urban spread and car ownership
• suburban supermarkets

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• 1960s - urban sprawl - move away from CBD
• regional shopping centres - anchor or destination
  store plus specialty shops
• hypermarket - ie Pick n Pay at Aspley (over 12
  000 square metres)

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• 1980s - non-store retailing
• direct marketing, direct selling
• 1990s e-tailing
• clicks and mortar

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Classifications of Retailers

• Store retailing
• refer table 2.2, p. 2.12 (study guide)
• department store, supermarkets, specialty stores,
  convenience stores, discount stores, category
  killers
• Non-store retailing
• ATMs, direct selling, direct marketing, vending
  machines, electronic shopping
• Services
• Various classifications table 2.5, p. 56

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Classification by ownership

• Independent retailers
• own and operate only one retail outlet
• Chain stores
• two or more similar retail establishments that
  are owned and operated by one firm
• 57 of retail sales
• Franchises
• product trademark
• business format

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Classification by retail strategy

• Merchandise width
• different product lines (variety)
• ie department and discount stores
• Merchandise depth
• different brands/styles of the same product line
• ie speciality stores
• Consistency
• degree of scrambled merchandising
• ie chemists, newsagents

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• Low end v high end retailers
• relative emphasis on price and service
• differences in retail mix
• markets served
• location
• service levels
• price levels
• product types
• promotional strategy
• store design, atmosphere (décor)

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Low end retailers include

• warehouse food stores
• Bi-lo, Franklins
• variety stores
• Best and Less
• discount stores
• K-Mart, Target
• off-price chains
• Silly Sollys, Crazy Clarkes

• Factory seconds outlets
• Weekend markets

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High end retailers include

• Convenience stores
• Supermarkets
• Coles, Woolworths
• Specialty stores
• Department stores

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The structure of retailing in Australia

• diversity of type and size
• 40 of GDP (1999)
• retail turnover 1997-98 (134,582 million)
• food is major sector (54,616 million - 39.7)
• top ten retailers account for 40 of retail sales
• about 170,000 retail establishments
• about 1.1 million employees (13.5 of workforce)

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Trends in Retailing

• Shorter retail life-cycles
• New retailing formats emerging to supersede some
  of the older formats
• What outlets are in each stage?
• Introductory stage
• electronic shopping
• Growth stage
• category killers
• Maturity stage
• supermarkets, department stores
• Decline stage
• variety stores, corner stores

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Trends in retailing cont.

• Category killers
• Large range of a limited product category
• Amart, Harvey Norman, ToysRUs
• Growing power of retailers
• Coles Myer group

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What are some other trends in retailing?

• shopping centres as entertainment
• non-traditional retailing formats
• Homeshopping
• http//www.woolworths. com.au
• private label programs
• international expansion
• franchising
• outdoor markets

• hypermarkets
• factory outlets
• off-price retailers
• category killers

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Retail Marketing Decisions

• Who is our target market?
• What is our positioning strategy?
• Store image
• What range of merchandise will we carry?
• Product lines (categories), product mix (brands)
• Scrambled merchandising
• What services will we offer?

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• What will the store look and feel like?
• Atmosphere, décor, music etc
• What pricing strategy will we use?
• Everyday low prices or high/low pricing
• Will we offer discounts or payment options
• Credit, layby etc.
• How will we promote the store?
• Message, media, budgets etc.
• Where will we locate?
• When will we operate?

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Selecting a retail site

• trading area characteristics
• affinities
• pedestrian vehicular traffic counts
• transportation - access/parking
• visibility
• lease terms

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Summary

• What is retailing?
• Retailing functions
• History of retailing
• Retail classifications
• Retailing in Australia
• Trends in retailing
• Retail marketing decisions
• Selecting a retailing site

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Tutorial Program

• Case 2 Sears, Roebuck and Company
• Activity 2.6
• Activity 2.7
• Activity 2.8, part 3