Retailing Lecture Flashcards
Retail Characteristics:
-Low barrier to entry
-Replication and Scale
Cash Flow - Stock market pressure (for growth –> more cash flow)
-High turnover, this is where the money comes from high turnover
Revenue per square foot:
Biggest expenditure is space
Gross Margin %:
Not necessarily low
inventory Turn:
- Turn of 6 or 7 is generally good
COGS for year / Current inventory
COGS:
Cost of Goods sold
Too Fast Turnover Implications:
May mean there’s not enough variety or possibly efficiency
Too Slow Turnover Implications:
Holding Costs. However, online retailers have very slow turnover because they aren’t paying for space at a storefront. This is called “Long-Tail”
“Agent for the Customers,” what does this refer to?
How Wal-Mart drives down prices in every market they’re in.
Inferior Goods Strategy:
Generics - lesser quality at a lower price
Exploit Installed Base:
- Parity quality at a value price (major brands can’t complain because they sell their product at the retailers whose brands mimic their own)
- “Me-Too’s” that mimic the leading national brand with saving (free advertising)
Private Label as differentiator:
Exclusive brands offering unique quality as good or better than the category leader at an affordable price
Store or Endorsed Brands:
Type of umbrella brands in which all private label carries the name of the store
Group Brands:
Type of umbrella brands where all products carry a common non-store name across a wide variety of products
Exclusive, Quasi, or Non-endorsed Brands:
Unique private label dedicated to specific product line
Branded Variants:
Partnering with a known brand to make a line of products only developed for that store
