CHAPTER 16 Retailing: Bricks and Clicks

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CHAPTER 16Retailing Bricks and Clicks
M A R K E T I N G
Real People, Real Choices Fourth Edition
Michael R. Solomon Greg W. Marshall
Elnora W. Stuart
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Chapter Objectives

• Define retailing and understand how retailing
  evolves
• Describe how retailers are classified
• Describe the more common forms of nonstore
  retailing
• Describe the B2C e-commerce, its benefits,
  limitations, and future promise
• Understand the importance of store image to a
  retail positioning strategy and explain how a
  retailer can create an image in the marketplace

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Retailing

• Final stop on the distribution path
• The process by which products are sold to
  consumers for personal use
• Retailers add value with image, inventory,
  service quality, location, and pricing policies

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The Wheel of Retailing

• New retailers find it easiest to enter the market
  by offering goods at lower prices than
  competitors
• after they gain a foothold, they trade up,
  improving facilities and increasing the quality
  and assortment of merchandise
• and offering special amenities upscaling
  increases costs causing prices to rise
• higher prices open the door for a new entrant
  charging lower prices

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Retail Life Cycle

• Retailers are also products because they provide
  benefits and must offer a competitive advantage
  to survive
• Introduction new retailer takes a unique
  approach to doing business
• Growth retailer catches on with shoppers, sales
  and profits rise, others start to copy it so
  retailer expands offerings
• Maturity many have copied it and an entire
  industry has formed, profits decline
• Decline retail format becomes obsolete

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Major Demographic Factors

• Convenience for consumers
• Catering to specific age segments
• Recognizing ethnic diversity

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Classifying Retailers

• Retailers are classified by what they sell
• Some lines still blurred
• scrambled merchandising strategy of carrying a
  combination of food and nonfood items

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Classifying Retailers by Service

• Self-service retailers
• Full-service retailers
• Limited-service retailers

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Classifying by Merchandise Selection

• Merchandise breadth is the number of different
  product lines available
• Narrow versus broad assortments
• Merchandise depth is the variety of choices
  available for each specific product
• Shallow versus deep assortments

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Store Types

• Convenience stores
• Supermarkets
• Specialty stores
• Department stores
• Hypermarket stores

• Discount stores
• General merchandise discount stores
• Off-price retailers
• Warehouse clubs
• Factory outlet stores

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Nonstore Retailing

• Any method a firm uses to complete an exchange
  that does not require a customer visit to a store
• Direct selling
• Automatic vending
• Door to door
• Parties and networks

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E-Commerce and the Customer

• Benefits
• Shop 24/7
• Less travel
• More choices
• More information
• Price competition
• Fast delivery

• Limitations
• Lack of security
• Fraud
• Cant touch items
• Hard to distinguish color/ texture online
• Expensive to return

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E-Commerce and the Marketer

• Benefits
• The world is your marketplace
• Decreases costs
• Very specialized businesses possible
• Real-time pricing
• Tracking of consumer behavior

• Limitations
• Lack of security
• Must maintain site
• Price competition
• Conflicts with conventional retailers
• Legal issues not resolved

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Developing a Store Positioning Strategy

• Store image
• how the target market perceives the store
• its market position relative to the competition
• Atmospherics
• the use of color, lighting, scents, furnishings,
  sounds, and other design elements to create a
  desired setting

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Store Design Setting the Stage

• Store layout and traffic flow
• Fixture type and merchandise density
• The sound of music
• Color and lighting
• The Actors Store Personnel
• Pricing policy

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Building the Theater Store Location

• Types of locations
• Site selection
• Location planners evaluate trade area and conduct
  site evaluation
• traffic flow, number of parking spaces available,
  ease of delivery access, visibility from street,
  local zoning laws, population characteristics,
  community life cycle, mobility, degree of
  competition