Chapter 1 Flashcards
Retail
the process of selling products and/or services to customers to earn a profit. A retailer is defined as a business or person that sells products and/or services to customers. Each retailer selects merchandise or services based on the needs of a specific store, region, or community.
Customers
are people who purchase goods or services from a business.
Products
physical goods that are bought and sold, such as food, clothes, and household items.
Services
are intangible transactions.
Goal of Retailing
to provide customers with the merchandise and services they want—when, where, and how they want to purchase them.
Retailers
connecting customers with the products and services they want and need to purchase.
Manufacturer
produces finished products
Wholesaler
buys large quantities of products directly from manufacturer and then sell smaller amounts to retailers
Product distribution channel options
- manufacturer, wholesaler, retailer, customer
- manufacturer, retailer distribution, retailer, customer
- online retailer, manufacturer, customer
Retail ecosystem
An interconnected system of approaches for meeting the goal of retailing, which is to provide customers with the merchandise and services they want – when, where and how they want to experience and purchase them.
Multichannel Retailing
retailing offers customers the opportunity to interact with the multiple options in their ecosystem. The retailer’s multiple channels are available for consumers to use but are not necessarily systemically connected to each other.
ie. may carry specific merchandise in store and offer different via ecommerce
Omnichannel Retailing
omnichannel retailing integrates the channels to create a seamless consumer experience through the use of technology.
type retail ownership
Independent
typically a single store or a small, regional chain, these retailers are able to tailor their offerings to meet the needs of local customers. Ex: “Mom-and-Pop stores.
type of retail ownership
Corporation
a business owned by shareholders through publicly traded stock. These retailers usually have centralized decision-making for their multiple store locations. Ex: Walmart, Target
type of retail ownership
Private Company
even though ownership is typically limited to a single or small number of owner investors, private businesses can be large companies with many retail locations and centralized business operations. Ex: Albertsons, Ashley Stewart
type of reail ownership
Franchise
a license is granted to another entity to retail a company’s products or services in a particular area; consistency in the customer experience is critical. Ex: Pizza Hut, Edible Arrangements
Retail drives US economy (statistics)
support one in four U.S. jobs
at least 20% of jobs in every state,
supporting 42 million employees across the nation. hiring over half of all working teens. There are over 1.5 million U.S. employees at Walmart alone!
Majority retailers are
independently owned
Customer Mindset
Customers value different things from retailers, customer service, and their shopping experiences
Comparison Shopper
a customer who spends a lot of time checking out products and prices through online sites, visiting different stores, comparing retailer ads and/or getting the opinions of others, either personally or through social media. A comparison shopper can take a long time to make a purchase decision and might return to a retailer several times before making a purchase. These shoppers are certain that they want the best price and will return the item and buy it again at another retailer in order to get it.
Recreational shopper
This customer views shopping as a fun occasion rather than looking for specific merchandise or services. The recreational shopper’s mindset is adventure. This type of customer enjoys walking through stores, trying on clothes, testing gadgets, talking to sales associates, and learning about new products. Shopping does not necessarily include making a purchase.
Impulse buyer
This shopper’s mindset allows quick purchase decisions, often for inexpensive items that do not have a high importance to the buyer. Retailers entice shoppers in stores to purchase additional items in the checkout area as they wait to purchase their main items because impulse buyers often purchase them.
innovation/trend buyer
It is important to this person to be one of the first to purchase the newest technology, car, eat at the just-opened restaurant, or see the latest movie. An innovation/trend buyer has an early adopter mindset and wants to be recognized as a trendsetter by others.
follower
: This customer wants to find out what’s trendy before making a purchase. They have a more cautious mindset and are reluctant to be the first to try new products.
Customer loyalty life cycle
- customer has a want or need
- considers different options
- chooses a buying option
- likes or dislikes experience
- purchases from retailer again
- tells others/become loyal shopper
interruptions of customer loyalty life cycle
Employees might deliver poor customer service
Competitors may offer better products, services, or prices
An online site or app may be difficult for customers to use, discouraging them from purchasing
Product quality can be lower than a customer expected, causing the customer to return merchandise
If customers have a good experience, they often don’t tell anyone. But if they have a bad experience, they often tell a lot of people! Social media enables customer reviews to reach many people very quickly
Demographic data
or quantifiable information, such as household size, resident age, income, education, occupation, and place of residence, help retailers determine customer behavior.
motivation
or the reason someone behaves a certain way, influences the way consumers make purchase decisions.
External commercial cues
Retailer marketing keeps their products and services in front of the customer. The delicious-looking food in a fast food restaurant television advertisement is an example of a commercial cue.
External Social Cues
People - family, friends, coworkers, etc. - can influence behavior. If your friend says, “Everyone on Twitter says the new burger restaurant downtown is great! Let’s check it out,” that’s a social cue.
Internal Physical Cues
Sometimes, internal needs drive the decision to purchase. If you think, “I’m hungry. I’m going to drive over to Burger King for lunch,” that’s a physical cue.
5 stage decision making process step 1
Recognize a need
an internal or external cue often results in the recognition that a product or service may be needed. “I just saw that dress Miley Cyrus was wearing on Instagram, I want that!” or “The washing machine is very old. Maybe I should get a new one.” At this point, it’s just a consideration and may go no further.
5 stage decision making step 2
Search for information
As the motivation to purchase the item increases, the person begins to consider ways that their wants and needs should be satisfied. “Let me look online for the performance where the Instagram pic was taken. It may have the dress designer’s name.” or “I could check out Best Buy and the Home Depot for a washer; Let me look online to see what they have available.”
5 stage decision making process step 3
Evaluate alternatives
The customer has done their research and is ready to compare options to purchase. “Miley’s dress is from a designer that is very expensive, but an online search shows that Urban Outfitters and Zara have similar styles that are much less expensive. I want to try it on though,” or “Both Best Buy and Home Depot have the washer I want, both offer a price match guarantee and free delivery, but the service was so much better at… “
5 stage decision making step 4
purchase
Criteria such as retailer reputation, quality of service, price, product availability, the proximity of the store to the customer’s home, and other factors figure into the customer’s decision to buy at one location versus another.
5 stage decision making step 5
Review decision and experience
After the purchase is complete, the customer reflects on whether the product or service met their expectations and about the quality of the customer service provided by the retailer. If they are happy with these things, they are more likely to repeat the purchase behavior and recommend the retailer to others. If they do not have a positive experience, the next time they need to make a similar purchase, they will reevaluate the alternatives and choose a different option. In addition, they may tell others to avoid the product or service and the retailer.
Connecting with customer
Greeting and making a connection with the customer as soon as possible sets the tone for a great experience. It’s important to smile, make eye contact, and pleasantly greet a customer as they approach, whether they just came through the front door or anywhere in the store. Ask how you can help them with their shopping today. A confident and positive attitude helps to begin building a relationship with the customer right away.
Provide positive and memorable experience by?
maintain the relationship by treating each customer as an important shopper in the store - Be attentive. Keep eye contact, an open, welcoming stance, and a suitable tone when speaking with the customer. Listen carefully. Repeat the customer
How to leave a great impression
Verify that their needs are met during the visit or a plan was put in place to help them
Ask if there are other ways that you can help them
Thank the customer for shopping at the store and invite them to come back and shop again
Acknowledge customers who leave the store without making a purchase. They may be searching for information or evaluating alternatives. A pleasant goodbye can be the difference that brings them back to your store to make a purchase in the future.
social media influencer
a user who has established credibility in a specific industry or content area, has access to a huge audience through their follower network, and can persuade others to act based on their recommendations
company website
website that represents a retailer on the Internet. Retailer websites typically provide customers with a way to browse and purchase products and services that the company offers, along with information about store location and hours, career opportunities, and general information about the company
mobile apps
software applications are designed to run on small wireless devices such as smartphones, tablets, or smartwatches. Retailer apps enable customers to purchase merchandise, view promotions and E coupons, track loyalty or reward program activity, and experience other retail content customers can usually use apps to place orders for pickup or home delivery.
Self Service kiosk
are interactive computers with customized software that provide access to information and applications. Retailer in-store kiosk capabilities differ, but customers may use them to order food and drink items for immediate consumption, locate merchandise in a store, access product information, find gift registries, request employee assistance, buy merchandise online, and more.
self checkout
allow customers to scan, pack, and pay for their merchandise without the assistance of a store cashier, although an employee is always close by in case the customer needs help. Some customers use self-checkouts because they like to interact with the technology.
digital signage
uses technology to electronically display digital images, videos, web pages, and text. Retailers use digital signs to attract in-store customers to merchandise, provide price and product information, and share brand content and messaging with customers to enhance their shopping experience.
QR code
specifically bar codes that contain product or store information. In a store, a customer typically scans a QR code with their smartphone to access the data that it displays, which might be product information, store information, or even a discount code or coupon. QR codes are usually used by retail employees to track inventory.
company culture
unique way company employee act with each other and customers
quality customer service
delivering a positive, memorable experience that is more than what the customer expected
$ lost annually due to poor customer service
60-70 billion
quality customer service includes
- treating with respect
- listening
- being professinoal
- communication
- knowledgeable on products
- postive and patient
- solve problems and confident
company brand
overall impression gathered from information that is seen, heard, experienced
