Retailing: Bricks and Clicks

  Retailing: Bricks and Clicks

Chapter Objectives

• Define retailing
• how retailing evolves
• Retail classifications
• Nonstore retailing

  

Chapter Objectives

• B2C e-commerce
• its benefits, limitations, and future promise
• store image
• positioning strategy
• creating a desirable image in the marketplace

  Retailing: Special Delivery

• Retailing

  :

• the process by which goods and

  services are sold to consumers for their

  personal use

  CABELA’S Retailing: Special Delivery

• The retailer adds/subtracts

  value from the offering

• with its image,
• inventory,
• service quality,
• location, and • pricing policy.

  

CABELA’S Retailing: A Mixed (Shopping) Bag

• Retailing is big business:
• one of every five U.S. workers is employed in retailing.

  BARNES and

  Retailing: A Mixed (Shopping) Bag

• Retailers
• = final channel of distribution,
• providing utilities to customers
• time,
• place, and ownership.

  BARNES and

  The Evolution of Retailing

• The wheel-of-retailing hypothesis
• New types of retailers
• enter the market
• by offering lower-priced goods.
• They gradually improve
>facilities, quality and
• assortment of merchandise, and amenities and increase prices.

The Evolution of Retailing (cont’d)

• The

  retail life cycle

• Retailers are

  born, grow and mature , and eventually die or become obsolete .

  Introduction stage

• Growth stage
• Maturity stage
>Decline stage

  The Evolution Continues: What’s “In Store” for the Future?

  :

• Demographics

• • retailers must find new ways to sell to diverse

  groups.

  convenience for working consumers Catering to specific age segments Recognizing ethnic diversity The Evolution Continues: What’s “In Store” for the Future? (cont’d)

• Technology
• Internet and e-tailing
• Electronic point-of-sale (POS) systems
• Cart-top computer
• to scan purchases as customers move through

  store

• RFID tags
• Intellifit System

The Evolution Continues: What’s “In Store” for the Future? (cont’d)

• Globalization
• Need to adjust to different conditions
• around the world
• Innovative retailing concepts
>developing overseas
• influencing U.S. retailing

  Retail Stores

  Classifying

• what they sell:
• merchandise mix
• level of service

  Self-service Full-service Limited service

  Retail Stores (cont’d)

  Classifying

• Classifying by

  merchandise selection

• Merchandise :

  assortment

• • selection of products a retailer sells

• Merchandise :

  

breadth

• number of different product lines
• Merchandise :

  depth

• choices available in each product line

Figure 16.1: Classification of Retailers by mdse. Selection

  Retail Stores (cont’d)

  Classifying

• Retail

  Format _KOHL’S

  Convenience stores Supermarkets Specialty stores Discount stores

  Warehouse clubs Factory outlet stores

  Department stores Hypermarkets

  Retailing

  Non-store

• Any method a firm uses
• to complete an exchange
• that

  does not require

• a customer to visit a store

  Nonstore Retailing (cont’d)

• Direct selling
• Door-to-door sales
• Party plan system
• Multilevel network:
• a master distributor recruits other people to

  become distributors

• Illegal pyramid schemes:
• people pay money to advance in company,

  profiting from others who might join

• Automatic vending _AMWAY

  B2C E-commerce

• (B2C) e-commerce:
• online exch
• between

  companies & individual consumers

  _DOGTOYS.COM B2C E-commerce of B2C e-commerce

• Benefits
• Facilitates global marketplace exchanges
• Increases consumer

  convenience fulfills experiential needs.

• For specialized businesses.
• price information available.
• reduce business costs .

  B2C E-commerce (cont’d)

  of B2C e-commerce

• Limitations
• Customers must wait • to receive products.

   Sites.

• poorly designed concerns.
• Security

  fraud

• Internet touch-and-feel ”.
• Can’t

  B2C E-commerce (cont’d)

• More Limitations
• Firms need “bricks-and-mortar” presence  to maintain base of loyal customers.
• Developing countries with cash economies  can’t easily pay for Internet purchases.

  B2C E-commerce (cont’d)

• One More Limitation
• Online inventory
• may

  cannibalize • major retailer store sales.

• (Victoria Secret catalog??)

B2C’s Effect on the Future of Retailing

• Virtual channels unlikely to replace traditional ones.
• Stores must evolve to lure shoppers away from computers.

  B2C’s Effect on the Future of Retailing

• In destination retail,
• consumers will visit stores
• for total entertainment .

  experience

• MOA & amusement park
• West Edmonton Mall • Nike Store (Chicago)

  Retailing as

  Theater

• Store image:
• the way a retailer
• is perceived
• in the marketplace
• relative to the competition

  Retailing as

  Theater

• Store image:

  : the use of:

• Atmospherics
• color, lighting,
• scents, furnishings,
• sounds, other design elem
• to create a desired setting

  

Figure 16.2: Mapping a Store’s Personality

  Store Image (cont’d)

• Store design: setting the stage
• Store layout:
• arrangement of merchandise in store
• – determines traffic flow
• – (grid layout vs. free-flow layout)
• Fixture type
• merchandise density
• sound of music
• Color & lighting
• to set a mood

  Store Image (cont’d)

• Store personnel:
• should complement a

  store’s image

• Pricing policy
• Price points/ranges
• of store’s merchandise
• helps establish image

  Retailing as Theater (cont’d)

• Store

  location

• Types of store locations
• Business districts
• Shopping centers
• Freestanding retailers
• Nontraditional store locations

  Retailing as Theater (cont’d)

• Store location ( Site selection )
• Store’s trade area :

  that accounts for

• – geographic zone

  the majority of its sales and customers

• –Primary – Secondary - Tertiary

• Saturated trade area
• Understored trade area
• Overstored trade area

• Top 100 retailers (U.S)
• Top 200 global retailers
• Retailer of the year
• NRF conference
• New York City - January

  

Non-traditional retailing

• Tourism retailing
• Souvenir shops
• Museums, events, resorts
• Shopping trips
>MOA, Dallas, New York
• Secondary retailing
• Garage sales
• Thrift shops
• Consignment retailers

  

The end

• Go shopping

  Real People, Real Choices

• Eskimo Joe’s (Stan Clark)
• A new Oklahoma law raised the legal drinking age from 18 to 21.
• How to ensure that Eskimo Joe’s would survive the new law?

   Option 1: convert the beer bar into a full-service restaurant.

• Option 2: continue operating as a beer
• bar and offset declining beer sales  with an increase in apparel sales.
• Option 3: close Eskimo Joe’s bar
• and refocus on building the growing  apparel business.
credits the result with paying close _{attention to the quality of food and service.}

  Real People, Real Choices

• Eskimo Joe’s (Stan Clark)
• Stan chose option 1: convert the beer bar to a full- service restaurant focused on selling great food. _{The success was immediate, and Stan}

  Discussion

• The wheel-of-retailing theory suggests the

  retailer’s normal path is to enter the

marketplace with lower-priced goods and

then increase quality, services, and prices.

• --Why do you think this happens?
• --Is it the right path for all retailers?
• --Why or why not?

  Discussion

• • Wal-Mart has become a dominant retailer in the

  U.S. marketplace, accounting for over 30 percent of the total sales of some products.

• --Is this good for consumers?
• --For the retail industry?

  Discussion

• Department stores may be

  declining in popularity in the United States but remain the primary place to shop in other countries such as Japan. _{--Why do you think this is so?} --Can department stores in the U.S. _{turn this trend around?}

  MACY’S Group Activity

• You and two friends decide to open a combination coffee shop and bookstore near your college. To attract college students and other customers, you’ll need to carefully design the store image.
• Develop a detailed plan that
• specifies how your group
• will use atmospherics  to create the store image.

  Discussion

• Experts predict a rosy future for B2C e-

  

commerce, with exponential increases in

Internet sales of some product categories within a few years.

• --What effect do you think the growth of e-retailing will

  have on traditional retailing?

• --In what ways will this be good for consumers, and in

  what ways will it not be so good?

  Discussion

• Pyramid scheme promoters recruit at

  frenzied meetings that make potential members fearful of passing up a great opportunity if they don’t join.

• --Why do people continue to be lured into these schemes?
• --What do you think should be done to stop these unethical promoters?

  

Discussion

• Macy’s and other stores

  use vending machines to sell electronics such as iPods. _{List other opportunities for vending What are the negative and positive} machine sales. elements of vending sales?

  Group Activity

• Your team are business consultants for a chain

  of 37 traditional department stores in 12 Midwestern U.S. cities.

• • The stores’ revenues have declined as specialty

  stores and hypermarkets have begun to

squeeze them out. The chain has asked your

group for suggestions to increase its business

_{--Outline your recommendations and present them to the class.}

  Group Activity

• Your client is a local caterer planning to open a new retail outlet selling take-out gourmet dinners.
• Your group of marketing consultants is examining locations: the central business district, a shopping center, a freestanding entity, or a nontraditional location.
• Outline the advantages and disadvantages of each type of location.

  Marketing Plan Exercise

• Think about a new retail venture, a specialty store that sells timepieces such as men’s and ladies’ watches and clocks.
• What retailing strategies do you recommend for the first two years of the business—what merchandise, what store image, and what location(s)?
• What long-term retailing strategies do you recommend?

  Marketing in Action Case: