Module 2: TYPES OF RETAILERS Flashcards
*The most basic
characteristic used to describe the different types of retailers
*The elements that retailers use to satisfy their customers’ needs.
Retail mix
What are used
to classify retailers ?
- Type of Merchandise and/or service sold
- Variety and Assortment of merchandise sold
- Level of customer service.
- Price of the merchandise
the number of merchandise CATEGORIES a retailer offers
- Also known as the “Breadth of Merchandise”
Variety
– the number of DIFFERENT ITEMS in a merchandise category
like assorted sizes and colors
- Or also known as the “Depth of Merchandise”
Assortment
SKU
Stockkeeping Unit
each different item of merchandise
Stockkeeping Unit (SKU)
Types of Retailers
A. FOOD RETAILERS
B. GENERAL MERCHANDISE RETAILERS
C. NONSTORE RETAILERS
D. SERVICE RETAILERS
Types of Food retailers
- Supermarkets
- Supercenters
- Hypermarkets
- Warehouse Clubs
- Convenience Stores
Types of supermarket
- Conventional Supermarket
- Limited Assortment Supermarkets or Extreme value food retailers
– a SELF-SERVICE FOOD STORE offering groceries, meat, and produce with
limited sales of nonfood items, such as health and beauty aids
and general merchandise.
- Carries about 30,000 SKUs
Supermarket
Nature of offering of SUPERMARKET that differentiate their offerings from the other
retail formats:
▪ Emphasize fresh perishables
▪ Targeting health-conscious and ethnic consumers
▪ Providing a better in-store experience
▪ Offering more private-label brands
Benefits of offering more private-label brands:
o Increases store loyalty
o Ability to differentiate themselves from competition
o Lowers promotional cost
o High gross margin
means purchasing from factories
that pay workers a living wage, more than the prevailing minimum wage, and offer other benefits, like onsite medical treatment.
Fair Trade
o Only stock about 2,000 SKUs
Limited Assortment Supermarkets or Extreme value food retailers
are large stores (about 150,000-200,000 sq. feet) that combine a SUPERMARKET (a
food retailer) with a FULL-LINE DISCOUNT STORE(a general merchandise retailer)
- very large that some customers find it inconvenient to shop because it can take a long time to find the items they want.
Supercenters
are also large stores (about 100,000-300,000) and is a combination of food (60-70%)
and general merchandise (30-40%) stores.
- they stock fewer SKUs than supercenters- between 40,000-60,000 SKUs.\
Hypermarkets
are similar with supercenters.
The only difference is that hypermarkets HAVE LARGER PERCENTAGE ON FOOD ITEMS and have more emphasis on FRESH PERISHABLES while SUPERCENTERS hold more non-food items and emphasize DRY GOODS such as cereals and canned goods.
Hypermarkets
– 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.
- is 100,000-150,000 sq.feet in area and typically located in low-rent
districts.
Warehouse clubs
Offer low prices because they use low-cost locations, inexpensive store
designs and little customer services
- They keep inventory holding costs low by carrying a limited assortment
of fast selling items.
Warehouse Clubs
two types of members of Warehouse Clubs
Wholesale members
Individual Members
those who own small businesses
Wholesale members
those who purchase for their own use.
Individual Members
provide a limited variety and assortment of merchandise at a convenient location in 2000-3,000square foot stores with speedy checkout.
- offer limited assortment and variety and charge higher prices
- this type of retailer enables to make purchases quickly without having to search through a large store and wait in a long checkout line.
Convenience stores
Types of General Merchandise Retailers
- Department Stores
- Full-line Discount Stores
- Specialty Stores
- Drugstores
- Category Specialists
- Extreme Value Retailers
- Off-Price Retailers
are retailers that carry a broad variety and deep assortments, offer customer services,
and organize their stores into distinct departments for displaying merchandise.
- attract customers by providing pleasing ambiance, attentive service, and a wide variety of merchandise under one roof.
- offer both soft and hard goods, but now most department stores offer soft goods.
- the major departments are women’s, men’s, and children’s apparel; cosmetics; home
furnishing; kitchenware; and small appliances.
Department Stores
are retailers that offer a broad variety of merchandise, limited service and low
prices.
- usually offers both private label and national brands
- provide low service, about 30,000SKUs
Full-line discount stores
concentrate on a limited number of complementary merchandise categories and
provide a high level of service in relatively small stores.
- provides deep assortment, high service and high prices with only 5,000 SKUs
Specialty Stores
are specialty stores that concentrate on health and personal grooming merchandise.
Drugstores
are big box discount stores that offer a narrow but deep assortment of merchandise
- are also called CATEGORY KILLERS – dominates in their product category and that they
exploit their buying power to negotiate low prices and are assured of supply when
items are scarce
Category specialists
A category specialist offering equipment and material used by do-it yourselfers and contractors to make your home improvement.
*Home Improvement Center
are small, full-line discount stores that offer a limited merchandise assortment at
very low prices.
-offers limited assortment and operating in low-rent locations.
- offer broad but shallow assortment of household goods, health and beauty aids and
groceries.
Extreme Value Retailers
are also known as close-out retailers
- offer inconsistent assortment of brand name merchandise at low prices
Off-price retailers
end-of-season merchandise that will not be used in following seasons
*Close-outs
– merchandise that has minor mistakes in construction
Irregulars
are special type of off-price retailers which are outlets
of manufacturing companies that sell irregulars and close-outs on a limited stock at
a lower price
Outlet stores or Factory outlets
Types of Non-store retailers
- Electronic Retailers (E-tailing, Online Retailing, and Internet Retailing)
- Catalog and Direct-Mail Retailers
- Direct Selling
- Television Home Shopping
- Vending Machine Retailing
retail format in which the retailers communicate with customers and offer products
and services for sale over the INTERNET.
Electronic Retailers
- a nonstore retail format in which the retail offering is communicated to a customer through a catalog
Catalog retailers
*communicate with their customers using letters and
brochures.
Direct-Mail Retailers
Types of Firms Selling Products through Catalogs:
a) General Merchandise Catalog Retailers
b) Specialty Catalog retailers
offer a broad variety of merchandise in catalogs that
are PERIODICALLY MAILED to their customers.
General Merchandise Catalog Retailers
focus on specific categories of merchandise.
Specialty Catalog retailers
Difference between catalog amd brochure
Catalog - all items
Brochure - specific items
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 benfits and/or explain a service; take an order and deliver the merchandise
or perform the service.
Direct Selling
Types of direct selling
a) Party Plan System
b) Multilevel Selling
where salespeople encourage customers to act as hosts
and invite friends or coworkers to a “party” at which the merchandise is
demonstrated.
Party plan system
where people serve as master distributors, recruiting
other people to become distributors in their network.
Multilevel selling
develops when the firm and its programs are
designed to sell merchandise and services to other distributors rather than to
end users.
Pyramid scheme
(known as T-commerce or teleshopping)
- a retail format in which customers watch a television program that demonstrates
merchandise and then place orders for that merchandise, usually by telephone.
Television Home Shopping
Three forms of electronic home shopping retailing:
A.) Cable Channels
b) Infomercials
c) Direct-Response Advertising
dedicated to television shopping
Cable channels
are programs, typically 30 minutes long that mix
entertainment with product demonstrations and then solicit orders placed by
telephone.
Infomercials
includes advertisements on television and
radio that describe products and provide an opportunity for consumers to
order them.
Direct-Response Advertising
–a nonstore format in which merchandise or services are stored in a
machine and dispense to the consumers when they deposit cash.
Vending Machine Retailing
firms that primarily sell services rather than merchandise.
SERVICE RETAILERS
Characteristics of a Service that make it different from goods:
- Intangibility
- Simultaneous Production and Consumption
- Perishability
- Inconsistency
TYPES OF RETAIL OWNERSHIP
- Independent, Single-Store Establishments
- Corporate Retail Chains
- Franchising
These are owner-managed stores in which the management has direct contact with customers and can respond quickly to needs
Independent, Single-Store Establishments
is an organization operated by wholesaler offering a
merchandise program to small, independent retailers on a voluntary basis.
Wholesale sponsored
voluntary cooperative groups
a company that operates multiple retail units under common ownership and usually
has centralized decision making for defining and implementing its strategy.
Retail chain
a contractual agreement between a franchisor and a franchisee that allows the
franchisee to operate a retail outlet using a name and format developed and supported by the
franchisor.
Franchising
