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MT303

MT303. Unit 3. Welcome to MT- 303 Store Management Seminar. Dear Students, The Seminar will start promptly at the Schedule Time.

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MT303

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  1. MT303 Unit 3

  2. Welcome to MT- 303Store Management Seminar Dear Students, The Seminar will start promptly at the Schedule Time. Remember that the system saves a transcript of everything in the Chat, if you wish to talk among yourselves you may do so, or you may use the Private Chat Option. Dr. Nardi

  3. Welcome to MT- 303Store Management Unit 3- Seminar Professor: Dr. Nardi TYPES OF RETAILERS Note: This seminar will be recorded by the instructor.

  4. Agenda • Announcements • Unit 2 – Review • Unit 3 Topics • Trends in Retail • Types of Retailers • Non-retailers • Services • Types of Ownership • Unit 3 – Assignments • Wrap Up

  5. Announcements • Good work your discussion posts and quizzes. • Start working on your Research Papers • Never to early….. • Our Usual Reminder: • Before a question please type ?? Or //

  6. Unit 2 • How did it go? • Time management? • Questions : Grades • Review? • Getting familiar with it? • Project/Written assignment • Have you started doing research? • Have you approached a Store Manager? • Other questions? Concerns?

  7. Review from Last Week • What is retailing? • Distribution • Types • Selective, Intensive, exclusive • Supply Chain • How retailers add value? • Retail differences across the world. • Ethical issues in retail • Career opportunities in retail. • Relationship Management

  8. ? Any Questions??

  9. General Trends in Retailing • New Types of Retailers • Increased Concentration • Globalization • Growth In Services Retailer • Demise of Pure Electronic Retailers (Webvan, eToys, etc) • Growth in Use of Multi-Channel Retailing by Traditional Retailers • Increase Use of Technology to Reduce Cost; Increase Value Delivered

  10. Types of Retailers • Retailers Use Different Retail Mixes -merchandise: variety (breadth) / assortment (depth) -services -store design, visual merchandising -location -pricing • Infinite Variations • Some combination of retail mixes satisfy the needs of significant segments and persist over time.

  11. Mom and Pop Stores Convenience Stores Supermarkets Supercenters Department Stores Specialty Stores Discount Stores Category Specialists Off-Price Retailers Warehouse Clubs Value Retailers Types of Merchandise Retailers Food Retailers GeneralMerchandise Retailers

  12. NAICS Codes for Retailers

  13. Merchandise Offering Variety(breadth of merchandise): wide vs. narrow - The number of merchandise categories Assortment(depth of merchandise): deep vs. shallow -the number of items in a category (SKUs)

  14. Variety and Assortment of Kayaks in Different Retail Outlets

  15. Services offered Retailers differ in the services they offer customers • EMS offers assistance in selecting the appropriate kayak and repairing them VS • Outdoorplay.com and • Wal-Mart: doesn’t provide any services

  16. ? Any Questions??

  17. Prices and the cost of offering breath and depth of merchandise and services Stocking a deep and broad assortment (like EMS) is costly for retailers. Many SKUs Because the retailer must have backup stock for each SKU in addition to holding the inventory Inventory Investment Cost

  18. ? Any Questions??

  19. Food Retailers Food retailers Channel preference for food shopping channel where grocery purchasers do most of their food shopping • Supermarkets • Supercenters • Warehouse Clubs • Convenience Stores

  20. Supermarkets • Conventional supermarkets • 30,000 SKU • Limited assortment supermarkets (extreme value food retailers) • 2000 SKU • Offer one or two brands and sizes • Designed to maximize efficiency and reduce costs • Offer merchandise at 40-60% lower prices than conventional supermarkets • Save-A-Lot, ALDI (German’s Wal-Mart)

  21. Trends in Supermarket Retailing Trends in Supermarket retailing Competition from Discount Stores Changing Consumption Patterns Efficient Distribution Lower Costs Lower Prices Time Pressure Eating Out More Meal Solutions

  22. Conventional Supermarket Survival Pack • Emphasize Fresh Perishables • Wegmans • Target health conscious and ethnic consumers • Provide a better in-store experience • Offer more private label brands Chef-crafted meals on the go at EatZi’s

  23. Supercenters and Warehouse Clubs Supercenters Warehouse Clubs • Offer a limited and irregular assortment of food and general merchandise with little service at low prices • Use low-locations, inexpensive store design, little customer service • Low inventory holding costs by carrying a limited assortment of fast selling items • The fastest growing retail category • Large stores (150,000 – 220,000 square feet) that combine a supermarket with a full-line discount store • One-stop shopping experience

  24. Convenience Store • Tailors assortments to local market • Makes more convenient to shop • Offers fresh, healthy food • Fast, casual restaurants • Financial services available • Opening smaller stores closer to consumers (like airports)

  25. ? Any Questions??

  26. Types of General Merchandise Retailers Types of General Merchandise Retailers • Department Stores • Specialty Stores • Category Specialists • Home Improvement Centers • Discount Stores • Drugstores • Off-Price retailers • Extreme Value Retailers

  27. Competition -Discount Stores on Price -Specialty Stores on Service, Depth of Assortment Lower Cost by Reducing Services (?) -Centralized Cash Wraps More Sales (?) -Customers Wait for Sale Focus on Apparel and Soft Home Develop Private Labels and Exclusive Brands Issues in Department Store Retailing Issues in Department Store Retailing

  28. Three Tiers of Department Stores • First Tier: Upscale, high fashion chains with exclusive designer merchandise and excellent customer service Nordstrom, Neiman Marcus, Saks • Second Tier: Retailers sell more modestly priced merchandise with less customer service Macy’s • Third Tier: Value oriented caters to more price conscious customer JCPenney, Sears, Kohl’s

  29. Department Stores:What To Do With an Eroding Market To deal with an eroding market Department stores are: • attempting to increase the amount of exclusive merchandise they sell • undertaking marketing campaigns to develop strong images for their stores and brands • building better relationships with their key customers

  30. Issues in Discount Store Retailing Issues in Discount Store Retailing • Only Big Left Wal-Mart, Target • Wal-Mart’s Dominance • Differentiate Strategy Wal-Mart = Low Price and Good value Target = More Fashionable Apparel • Competition from Category Specialists Toys-R-Us, Circuit City, Sports Authority

  31. Mall-Based Apparel Retailers Decline in Mall Shopping and Apparel Sales -Lack of New Fashions -Less Interest in Fashion -Increased Price Consciousness Lifestyle Formats – Abercrombie and Fitch Hot Topics Issues in Specialty Store Retailing Issues in Specialty Store Retailing

  32. Specialty Store Retailers McGraw-Hill Companies, Inc./Andrew Resek, Photographer

  33. Consolidation – Walgreens, CVS, Rite-Aid Competition from Supermarkets, discount Stores and mail-in orders Evolution to a New Format -Stand Alone Sites with Drive Thru Windows -offering more frequent purchase food items Improvedsystems provide personalized service in the pharmacy Issues in Drug Store Retailing Issues in Drug Store Retailing

  34. Deep and Narrow Assortments Destination Stores Category killers Low Price and Service Wholesaling to Business Customers and Retailing to Consumers Incredible Growth Category Specialists Category Specialists Bass Pro Shops

  35. Category Specialists Sephora, France’s leading perfume/cosmetic chain LVMH’s division

  36. Category Specialists: Home Improvement Centers Home Depot and Lowes act as both: Retailer and Wholesaler ConsumerBusiness

  37. Home Improvement Centers • Displayed in a warehouse atmosphere • Customer Service: How to select and how to use merchandise • Competition focuses on price, effort to differentiate and services provided

  38. Focuses on Lower Income Consumers Names mostly imply good value not $1 price points Low Cost Location Limited Services One of the Fastest Growing Retail Segments Issues in Extreme Value Retailing Issues in Extreme Value Retailing Dollar Tree Family Dollar Dollar General 99 Cents Only Store

  39. ? Any Questions??

  40. Off-Price Retailers • Close-out retailers • Offer an inconsistent assortment of brand name merchandise at low prices TJX companies (T.J. Maxx, Marshalls. HomeGoods) Ross Stores, Burlington Coat factory, Big Lots, Tuesday Morning

  41. Types of Non-store Retailers

  42. Electronic Retailing • Many retailers operate from virtual storefronts on the World Wide Web, usually maintaining little or no inventory, ordering directly from vendors to fill customer orders • History of frenzied investments and false predictions of retail dominance • Primarily used by traditional retailers to compliment store and catalog offerings • Exclusive e-tailers target small and dispersed niche markets

  43. What are Amazon and eBay? • http://www.Amazon.com – Merchandise to consumers. Provides website development and fulfillment services to other retailers • eBay – Acts as a mall or other shopping center providing a “place” for buyers and sellers to meet Don Farrall/Getty Images

  44. Low Start Up Cost Evolution of Multi-Channel Offering Hard to compete with large well established firms Increasing Mail Costs Clutter from other Catalogs Specialty Catalogs like Victoria Secret General merchandise catalogs like JC Penney Issues in Catalog Retailing Issues in Catalog Retailing

  45. Issues in Direct Selling • Completely bypasses retailers and wholesalers • Manufacturers set up their own channels to sell their products directly to consumers • Party plan system: merchandise is demonstrated in a party atmosphere • Multi-level network: Master distributors sell to distributors who sell merchandise • Pyramid schemes: Firm sells to other distributors and little if any merchandise goes to end users

  46. Issues in Television Home Shopping • Consumers watch cable stations, infomercials or direct response ads • Few consumers watch regularly • Most purchases made by small proportion of viewers • Customers can’t examine merchandise • Customers must wait for merchandise to come on • Sells predominately jewelry, apparel, cosmetics, kitchenware, and exercise equipment

  47. Issues in Vending Machine Retailing • Automatic Merchandising • About $25 billion worth of convenience goods are sold to Americans through 4.7 million vending machines • Sales growth has been declining due to higher prices and healthier eating habits • New technology may help sales growth • Trend of placing machines in captive consumer locations

  48. ? Any Questions??

  49. Services vs. Merchandise Retailers Services vs. Merchandise Retailers • Intangibility Problems in Evaluating Service Quality Performance of Service Provider • Simultaneous Production and Delivery Importance of Service Provider • Perishability No Inventory, Must Fill Capacity • Inconsistency of the Offering Importance of HR Management

  50. Characteristics of Service Retailing Intangibility • No patent protection possible • Difficult to display/communicate service benefits • Service prices difficult to set • Quality judgment is subjective • Some services involve performances/experiences

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