THE NATURE OF RETAILING

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

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

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

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

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

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

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

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

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 110(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

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

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

RETAILER AS A PRODUCER/CONSUMER LINK

Assortment

Gap Quantity gap Space Gap Time gap

Retailers create utility!!

Retailers are intermediaries who are very interested in channel relationships.

Improved channel relationships often involve forming vertical marketing systems.

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

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!!

THE COMPONENTS OF A RETAIL IMAGE

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

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.

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

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

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

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

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.