Chapter 2 - Retail Environment Flashcards
Nature of the South African retail landscape
Many political and demographic changes with the dynamic society that influence the marketplace
Wide range of retailers that serve the many groups of people in terms of race, income and culture
Retailers are situated in urban, semi-urban and rural areas
Factors of the retail environment
Demographic patterns and trends
Technology
Competition
Political and legal environment
-Retailers need to cater for new laws and regulations as well as planning ahead for possible economic changes including inflation, interest rates and changes in exchange rates
Economic environment
Social and cultural patterns and trends
Ethics in retail
Retailer characteristics
Form of ownership
Retail mix
Form of retail ownership
Sole proprietorship
- business owned by one owner, therefore owner is liable for all expenses and losses
- experience and capital outlay is limited
Partnership
- all expense and proof it’s are shared. Risk is spread out and finances are easier to raise than a sole proprietorship
Limited liability company
- a business set up according to the Companies Act. Either a public or a private business and they abide to laws that spell out the liability of their directors
Retail operational structures
Independent stores
- Owned by one owner or family eg is the Spaza shops in SA
Chain stores
- limited liability company with many branches.
Eg discount stores, speciality stores
Franchises
- a franchise agreement is one in which the franchisor grans sole rights to an individual Calle da franchisee to operate the business under the holding of the company’s name in a specific location.
Six Elements of the Retail Mix
Location
Design and layout
Merchandise
Customer service
Price
Communication
4 Elements of the Retail mix that differentiate retailer
Merchandise type
Merchandise assortment
- The number of different products they offer to consumers and the variations of one type of product
Variety - the number of different kinds of products the retailer sells in terms of BREADTH.
Assortment - the number of different variations available within a group of products
Services offered
-Lots of services or minimal services
Price
Types of Retailers
Food retailers
Full service supermarket - one stop shopping experience.
Hypermarkets- larger than a supermarket. Bulk purchasing is encouraged.
Warehouse clubs - big box no frills environment
Convenience stores - smaller more frequent shops at convenient location
Types of General Merchandise Retailers
D D S O C
Department stores
Discount retailers
Speciality stores - American Swiss
Category specialists - narrow but deep assortment with self service approach. Dis - Chem
Off price retailers - thief buying practice involves to take whatever is left after other major retailers have bought in terms of cancelled orders, over runs and rejects at much lower prices
Access Park in Cape Town
