1. Conventional Supermarket 2. Limited Assortment Supermarkets or Extreme value food retailers

Module 2: TYPES OF RETAILERS Flashcards by Kai Monica

*The most basic
characteristic used to describe the different types of retailers

*The elements that retailers use to satisfy their customers’ needs.

Retail mix

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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

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the number of merchandise CATEGORIES a retailer offers
- Also known as the “Breadth of Merchandise”

Variety

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– the number of DIFFERENT ITEMS in a merchandise category
like assorted sizes and colors
- Or also known as the “Depth of Merchandise”

Assortment

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SKU

Stockkeeping Unit

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each different item of merchandise

Stockkeeping Unit (SKU)

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Types of Retailers

A. FOOD RETAILERS
B. GENERAL MERCHANDISE RETAILERS
C. NONSTORE RETAILERS
D. SERVICE RETAILERS

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Types of Food retailers

Supermarkets
Supercenters
Hypermarkets
Warehouse Clubs
Convenience Stores

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Types of supermarket

Conventional Supermarket
Limited Assortment Supermarkets or Extreme value food retailers

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– 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

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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

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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

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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

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o Only stock about 2,000 SKUs

Limited Assortment Supermarkets or Extreme value food retailers

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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

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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

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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

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– 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

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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

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two types of members of Warehouse Clubs

Wholesale members
Individual Members

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those who own small businesses

Wholesale members

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those who purchase for their own use.

Individual Members

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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

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Types of General Merchandise Retailers

Department Stores
Full-line Discount Stores
Specialty Stores
Drugstores
Category Specialists
Extreme Value Retailers
Off-Price Retailers

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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

1. Electronic Retailers (E-tailing, Online Retailing, and Internet Retailing) 2. Catalog and Direct-Mail Retailers 3. Direct Selling 4. Television Home Shopping 5. 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:

1. Intangibility 2. Simultaneous Production and Consumption 3. Perishability 4. Inconsistency

TYPES OF RETAIL OWNERSHIP

1. Independent, Single-Store Establishments 2. Corporate Retail Chains 3. 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