Retail Marketing

1. Retail Marketing

2. What we are going to cover • What Retailing is • The importance of retailing • Career opportunities in retail

3. What is retailing to you? • Retailing – a set of business activities that adds value to the products and services sold to consumers for their personal or family use The Four P’s of Marketing Product Distribution Price Promotion

4. How do Retailers add value? • Provide Assortment Buy other products at the same time • Break Bulk Buy it in quantities customers want • Hold Inventory Buy it at a convenient place when you want it • Offer Services See it before you buy; get credit; layaway

5. What do Retailers do for Corporate Social Responsibility • McDonalds Houses • Starbuck fair trade coffee • Target community Give Back

6. Retail has changed! So has the career opportunities! To Today’s Retailer Store Design Mom and Pop Store Operations MIS Human Resources Loss Prevention Finance Real Estate Promotion/Advertising

7. Misconceptions • College not needed • Low pay • Long hours • Boring • Dead-end job • No benefits • Everyone is part-time • Unstable environment • No opportunity for women and minorities

8. The Retail Management Decision Process The World of Retailing (chapters 1-4) • Environmental Factors • Macro– technology, social, ethical, political • Micro– competition and customers • Competition – • Intratype competition– between same type retialer (supermarket vs supermarket) • Greater Variety of products makes for scrambled merchandising thus increased Intertype competition. (examples of scrambled merchandising??) • Customers – Consumer Behavior

9. The Retail Management Decision Process Retailing Strategy (chapters 5-11) • How the firm plans to focus its resources to accomplish objectives • Targets • Merchandise • Long term competitive advantage • Wallmart vs Toys R Us Small towns -- big towns Wide Varity shallow selection – every toy made Low price — low price Self service – Self service

10. The Retail Management Decision Process Retailing Strategy (chapters 5-11) Cont. • Strategic Decision Area • Marketing strategy • Financial strategy • Location strategy • Organizational structure • Human Resource • Information systems • Supply Chain Strategies • CRM

11. Implementing the Retail StrategyChapter 12-19 • Retail Mix – combination of factors used to satisfy customer needs and influence their purchase decision • Types of merchandise and service • Pricing • Advertising and promotion • Store design and merchandise display • Level of customer service • Store location

12. Wal-Mart’s Retail Mix Customer Service Location Retail Strategy MerchandiseAssortment Store DesignAnd Display Pricing CommunicationMix

13. Customer Service Store DisplayAnd Design MerchandiseAssortment Communication Mix Pricing Wal-Mart’s Retail Mix Location Strategy Free-standingStores

14. Wal-Mart’s Retail Mix Assortment Strategy Customer Service Location Large Number of Categories Few Items in Each Category Store Design and Display Communication Mix Pricing

15. Location Customer Service Merchandise Assortment Store Design and Display Communication Mix Wal-Mart’s Retail Mix Pricing Strategy Low, EDLP

16. Customer Service Location Store Design and Display Merchandise Assortment Pricing Wal-Mart’s Retail Mix Communication Mix TV and NewspaperInsert Ads

17. Customer Service Location Merchandise Assortments Communication Mix Pricing Wal-Mart’s Retail Mix Store Design and Display Basic, Special Displays for Products

18. Location Merchandise Assortment Store Design and Display Pricing Communication Mix Wal-Mart’s Retail Mix Customer Service Limited

19. Checklist for Making Ethical Decisions

20. Rubric For Assignments

21. Assignment 1 • Interview somebody that has a career in the retail field. • Ask questions in the following areas • What is an average day like for your position? • What career opportunities in retail do they see for someone with a degree in business? • What are the benefits and draw back to working in retail? • What does their business do for social responsibility • Any ethical situation you have encountered. • Post the interview as a video or podcast to introduction to retail wiki page. (YouTube, Blaberize…)

22. Assignment 2 • Use Screencasting or Digital Storytelling that illustrates the role retailers play in the distribution chain. (Prezi or Photopeach would work well… others?) • Terms to use: • Backward/Forward Integration or Vertical Integration • Breaking Bulk, Holding Inventory, Providing Assortment and Services • Supply Chain • Anything else you see fit….. • Post to Introduction to Retail Wiki page.

23. Assignment 3 • Retail mix • Go to two local retailers that are intertype Competitors and compare their retail mix. Examples (Walmart and Kmart) (Safeway and FTC) (Deer Mt. and Terry Peak) • Customer Service • Store Design and display • Communication mix • Location • Merchandise Assortment • Price • Use a digital story telling method or multimedia to illustrate the comparisons to document that is appropriate. (Blabberize, Comic Life, Prezi….) Post to wiki!

24. Retail marketing • is the range of activities undertaken by a retailer to promote awareness and sales of the company’s products. This is different from other types of marketing because of the components of the retail trade, such as selling finished goods in small quantities to the consumer or end user, usually from a fixed location. Retail marketing makes use of the common principles of the marketing mix, such as product, price, place and promotion. A study of retail marketing at university level includes effective merchandising strategies, shopping and consumer behavior, branding and advertising. Retail marketing is especially important to small retailers trying to compete against large chain

25. Types of Retailers Over time, different types of retailers have emerged and prospered because they have attracted and maintained a significant customer base.

26. Food Retailers • Supermarkets • Supercenters • Warehouse Clubs • Convenience Stores • Box(Limited-Line) Store

27. Supermarkets • A Conventional supermarket is a self-serviced food store offering groceries, meat, and produce with limited sales of non food items, such as health and beauty aids and general merchandise. • Whereas conventional supermarkets carry about 30,000 SKUs, Limited assortment supermarkets, also called extreme value food retailers, only stock 1,250 SKUs. • Rather than carrying twenty brands of laundry detergent, limited assortment stores offer one or two brands and sizes, one of which is a store brand. Stores are designed to maximize efficiency and reduce costs.

28. Supercenters • The fastest growing retail category, are large stores that combine a supermarket with a full-line discount store. • By offering board assortments of grocery and general merchandise products under one roof, super centers provide a one-stop shopping experience. • Hypermarkets: are also large combination food and general merchandise stores. Hypermarkets typically stock fewer SKUs than supercenters - between 40,000 and 60,000 items ranging from groceries, hardware, and sports equipment to furniture and appliance to computers and electronics.

29. Warehouse Clubs • Warehouse clubs are retailers that offer a limited and irregular assortment of food and general merchandise with little service at low prices for ultimate consumers and small businesses. • Warehouse clubs are large (at least 100,000-150,000 square feet) and typically located in low-rent districts. They have simple interiors and concrete floors. • Warehouse clubs can offer low prices because they use low-cost locations, inexpensive store designs, and little customer service and keep inventory holding costs low by carrying a limited assortment of fast selling items. • Most warehouse clubs have two types of members: wholesale members who own small businesses and individual members who purchase for their own use.

30. Convenience Stores • Convenience stores provide a limited variety and assortment of merchandise at a convenient location in 2,000- 3,000 square foot stores with speedy checkout. • They are the modern version of the neighborhood mom-and pop grocery/general store. Customers can shop very quickly. • Due to their small size and high sales, convenience stores typically receive deliveries every day. • Convenience stores only offer limited assortments and variety, and they charge higher prices than supermarkets.

31. Box(Limited-Line) Store • The Box (Limited-Line) Store is a food based discounter that focuses on a small selection of items, moderate hours of operation (compared to other supermarkets), few additional services, and limited manufacturer brands. • There stock usually less items, few or no refrigerated perishables, and few sizes and brands per item. Items are displayed in cut cases. Customers do their own bagging. • Box stores depend on low –priced private-label brands. They aim to price merchandise 20 to 30 percent below supermarkets.

32. General Merchandise Retailers • Department stores • Full-line discount stores • Specialty stores • Drug stores • Category Specialists • Home improvement centers • Off-price retailers • Extreme value retailers • Factory Outlet Stores • Hypermarkets • Variety Store • Flea Market

33. Department Stores • Department stores are retailers that carry a broad variety and deep assortment, offer customer services, and organize their stores into distinctly separate departments for displaying merchandise. • Traditionally, department stores attracted customers by offering a pleasing ambience, attentive service, and a wide variety of merchandise under one roof. • They sold both soft goods (apparel and bedding) and hard goods (appliances, furniture, and consumer electronics). • But now most department stores focus almost exclusively on soft goods.

34. Full-Line Discount Stores • Full-line discount stores are retailers that offer a broad variety of merchandise, limited service, and low prices. • Discount stores offer both private and national label, but these brands are typically less fashion oriented than the brands in department stores. • Target is becoming one of the most successful retailers in terms of sales growth and profitability. Target succeeds because its stores offer fashionable merchandise at low prices in a pleasant shopping environment.

35. Specialty Stores • Specialty stores concentrate on a limited number of complementary merchandise categories and provide a high level of service in relatively small stores. • Specialty stores tailor their retail strategy toward a very specific market segment by offering deep but narrow assortments and sales associate expertise. • Because specialty retailers focus on specific market segments, they are vulnerable to shifts in consumer tastes and preferences.

36. Drugstores • Drugstores are specialty stores that concentrate on health and personal grooming merchandise. • Drugstores, particularly the national chains, are experiencing sustained sales growth because the aging population requires more prescription drugs. • Drugstores are also being squeezed by considerable competition from pharmacies in discount stores and supermarkets, as well as from prescription mail-order retailers. • Drugstore retailers are using systems to allow pharmacists time to provide personalized service.

37. Category Specialists • Are big box discount stores that offer a narrow but deep assortment of merchandise. • These retailers are basically discount specialty stores. • Most category specialists use a self-service approach, but some specialists in consumer durables offer assistance to customers.

38. Home improvement centers • One of the largest and most successful types of category specialist is the home improvement center. • A home improvement center is a category specialist offering equipment and material used by do-it-yourselfers and contractors to make home improvements.

39. Off-Price Retailers • Offer an inconsistent assortment of brand name merchandise at low prices. • Off-price retailers sell brand name and even designer label merchandise at low prices through their unique buying and merchandising practices. • Most merchandise is bought opportunistically from manufacturers or other retailers with excess inventory at the end of the season. • Due to this pattern of opportunistic buying, customers can’t be confident that the same type of merchandise will be in stock each time they visit the store.

40. Extreme Value Retailers • Are small, full-line discount stores that offer a limited merchandise assortment at very low prices. • Extreme value retailers are one of the fastest growing segments in retailing. Like limited assortment food retailers, extreme value full-line retailers reduce costs and maintain low prices by offering a limited assortment and operating in low-rent, urban, or rural locations.

41. Factory Outlet Stores • Outlet Stores are off-price retailers owned by manufacturers or by department or specialty store chains and are frequently referred to as factory outlets. • A factory outlet is a manufacturer–owned store selling manufacturer closeouts, discontinued merchandise, irregulars, cancelled orders, and sometimes, in season, first quality merchandise. • They closely resemble shopping centers, both in terms of size, layout, and in carefully controlled tenant mix, with manufacturers operating separate units on a single co-coordinated site.

42. Hypermarkets • A hypermarket is a very large retail store offering low prices. • It combines a discount store and superstore food retailer in one warehouse like building. • Hypermarkets can be up to 300,000 square feet and stock over 50,000 different items. • All hypermarkets are based on three concepts of: one stop shopping, ample free parking and a discount pricing strategy.

43. Variety Store • A variety store handles a wide assortment of inexpensive and popularly priced goods and services, such as stationary, gift items, women’s accessories, health and beauty aids, light hardware, toys, house ware and confectionery items. • They do not carry full product lines, may not be departmentalized and do not deliver products. • Transactions are often on a cash basis. There are often displays and few salespeople.

44. Flea Market • A flea market has many retail vendors offering a range of products at discount prices in plain surroundings. • It is rooted in the centuries old tradition of street selling -shoppers touch, sample and haggle over the prices of items. • Price-conscious consumers who find that other retail formats have upgraded merchandise and customer service or raised prices frequent them. • Many flea markets are located in nontraditional sites not normally associated with retailing: racetracks, stadiums and arenas.

45. Non Store Retailers • Types of retailers that operate primarily through non-store channels

46. Electronic Retailers • Electronic Retailing (also called e-tailing, online retailing, and Internet retailing) is a retail format in which the retailers communicate with customers and offer products and service for sale over the Internet. • Internet continues to provide opportunities for entrepreneurs in the retail industry, it is now primarily used by traditional retailers as a tool to complement their store and catalog offerings, grow their revenues, and provide more value for their customers. • Most of the retailers that sell merchandise exclusively over the Internet target niche markets – markets that are so small and dispersed that they cannot be economically serviced by stores.

47. Catalog and Direct-Mail Retailers • Catalog retailing is a non-store retail format in which the retail offerings are communicated through a catalog, whereas direct-mail retailers communicate with their customers using letters and brochures. • In 2003, $125 billion of merchandise and services were sold through catalogs, and over 17 billion catalogs were distributed in the United States. • The merchandise categories with the greatest catalog sales are apparel, gifts, books, and home décor.

48. Direct Selling • Direct selling is a retail format in which salespeople, frequently independent businesspeople, contact customers directly in a convenient location, either at the customer’s home or at work; demonstrate merchandise benefits and/or explain a service; take an order; and deliver the merchandise or perform the service. • Direct selling is a highly interactive form of retailing in which considerable information is conveyed to customers through face-to face discussions with salespeople.

49. Television Home Shopping • Television home shopping is a retail format in which customers watch a TV program that demonstrates merchandise and then place orders for the merchandise by telephone. • The three forms of electronic home shopping retailing are • o Cable channels dedicated to television shopping • o Infomercials • o Direct-response advertising

50. Vending Machine Retailing • Vending machine retailing is a non-store format in which merchandise or services are stored in a machine and dispensed to customers when they deposit cash or use a credit card. • Vending machines are placed at convenience, high-traffic locations, such as in the workplace or on university campuses, and primarily contain snacks and drinks.