Understanding Service Industries - Retail Industry

Question 1

Define ‘retail’.

Answer 1

[noun] It is the activity of selling goods to the public, usually in small quantities.
[verb] 1. To sell goods to the public in shops or by post.

Question 2

Define ‘retailer’.

Answer 2

[noun] a person, shop or business that sells goods to the public.

Question 3

What is retailing?

Answer 3

Retailing consists of all the activities needed to sell products or services to customers. OR
The retailing industry consists of business activities related to the sale of products and services to customers.

Question 4

What are some of the business activities that are related to the sale of products and services to customers?
Give examples of retailing activities.

Answer 4

1. Buying / Purchasing of products / goods from wholesalers (businesses that buy large quantities of products / businesses that buy products in bulk or in large quantities from manufacturers and producers, and sell them in small quantities to retailers.)
2. Setting the price of the products.
3. Displaying the products to attract customers to visit the store (promotion).
4. Keeping the store in good condition.
5. Employing / Hiring sales / retail assistants to help customers find what they need as well as to provide necessary product information to customers.
6. Providing after-sales service / providing service centres for customers to enquire about their purchases.

Question 5

What are wholesalers?

Answer 5

wholesalers (businesses that buy large quantities of products / businesses that buy products in bulk or in large quantities from manufacturers and producers, and sell them in small quantities to retailers.)

Question 6

What are businesses that are involved in retailing called?

Answer 6

Retailers.

Question 7

What do retailers do?

Answer 7

Retailers buy products from wholesalers and sell them in smaller quantities or as individual / single items to individual customers (end users).

Question 8

What are the various methods in which retailers can choose to sell their products or services to customers? / How can retailers sell their products or services to their customers?

Answer 8

• Retail store / in a store… e.g. at Watsons, Guardian Pharmacy, etc.
• The Internet… e.g. on the eBay website
• Through the phone / telephone… e.g. selling insurance plans
• Direct Mail… e.g. putting flyers in letter-boxes
• Vending machines… e.g. in a coin machine which sells canned drinks

Question 9

How can retail stores be grouped? / How many main types of retail stores are there?

Answer 9

Five: Specialty stores, convenience stores, department stores, supermarkets and hypermarkets.

Question 10

Specialty Stores

What do specialty stores sell?

Answer 10

Specialty stores sell a specific range of products and related items such as clothes and accessories, bags and shoes, books and stationery, medicine and toiletries.

Question 11

What characteristics do specialty stores tend to have?

Answer 11

Specialty stores tend to:

1. Cater to a specific market / target a certain market group
2. Offer a wide selection of a specific type/ range of products
3. Offer personalized service
4. Offer expert product knowledge (i.e. sales staff have excellent product knowledge)
5. Have a distinct image

Question 12

What are some examples of specialty stores? / Name some specialty stores.

Answer 12

POPULAR Bookstore, Kinokuniya, Bata, Watsons (a toiletries specialty store), Topshop, Charles and Keith, Esprit, Zara (an apparel / clothing specialty store), Go Sports (skateboarding store found in the Redhill neighbourhood)

Question 13

Where are specialty stores located in? / Where can specialty stores be found at?

Answer 13

They can be located in shopping malls / centres as well as among neighbourhood shops.

Question 14

Name some of the specialty stores that we can find in our neighbourhood.

Answer 14

Kitchenware and household items store (e.g. Sia Huat, Kitchen Story, Totts, Phoon Huat), clocks and watches store, joss sticks and incense shop, spectacles and eye care items store.

Question 15

Convenience Stores

What are convenience stores?

Answer 15

Convenience stores are small stores that sell a limited / narrow variety of fast-moving basic food and non-food products. They usually sell products that are daily essentials (necessities) and purchased / bought frequently / often.

Question 16

Where can convenience stores be usually found?

Answer 16

Neighbourhood areas, along busy roads, in petrol stations / kiosks

Question 17

What are some examples of basic food products?

Answer 17

Drinks, bread, instant noodles, biscuits, snacks and milk, etc.

Question 18

What are some examples of non-food products?

Answer 18

Printed materials (e.g. newspapers and magazines);
Healthcare and beauty items (e.g. soap, shampoo, medicine, plasters, eye drops, etc.)

Question 19

What are some of the characteristics / highlights that convenience stores tend to have?

Answer 19

They:
• sell products that are purchased daily / everyday or frequently used by customers
• sell products that are usually inexpensive / cheap
• are located in neighbourhood areas, along busy roads or petrol stations
• are usually open for long hours (e.g. 24 hours) for seven days a week/ everyday.

Question 20

What are some examples of convenience stores? / Give some examples of convenience stores.

Answer 20

Cheers, FairPrice Xpress at Esso Petrol Stations, Choices at SPC Petrol Stations, 7-Eleven (Note: These stores are open 24 hours a day and seven days a week.)

Question 21

Department Stores

What are department stores?

Answer 21

They are large retail stores with many different departments selling a wide variety of products, such as clothing (e.g. ladies’ wear and kids’ wear) and household items (e.g. kitchen utensils and bedding).

Question 22

What is a department?

Answer 22

A department is a section in the store selling a particular kind / type of product.

Question 23

Give some examples of the various departments that can be found in a department store.

Answer 23

1. Children’s department selling children’s clothing and toys
2. Swimwear department selling clothing for swimming
3. Cosmetics department selling perfumes, cosmetics, skincare products
4. Household department selling kitchen utensils and bedding
5. Electrical appliances department selling electric kettles, ovens, steamers, irons, etc.
6. Shoes department
7. Etc.

Question 24

What do Department Stores provide shoppers with?

Answer 24

A ‘one-stop’ shopping experience, i.e. customers can probably buy most of the things they need within the same department store.

Question 25

What characteristics do department stores tend to have?

Answer 25

Department stores tend to:
• be located in major shopping centres (e.g. Ngee Ann City, Raffles City, Marina Bay Sands, etc)
• have more than one floor / level
• provide a wide range of customer services such as delivery, alteration of clothing and gift wrapping
• have staff stationed at each department
• provide special staff expertise in various product departments, i.e. have staff who is able to provide product knowledge

Question 26

What are some examples of department stores? Name some department stores that you know.

Answer 26

Robinsons, John Little, TANGS, Metro, Takashimaya, Isetan

Question 27

Supermarkets

What are supermarkets?

Answer 27

Supermarkets are large stores that sell groceries (food and small items that you buy), fresh produce (meat, seafood - fish, prawns, crabs, etc), vegetables), dairy products (milk, butter) and household items such as soaps, biscuits, detergent, etc.

Question 28

How are supermarkets different from convenience stores?

Answer 28

Supermarkets are bigger in size and sell their products at cheaper prices, i.e. convenience stores tend to sell their products at more expensive prices.

Question 29

What are some of the characteristics of supermarkets?

Answer 29

• They tend to be bigger in size;
• They sell their products at cheaper prices
• They sell mainly / usually sell food products
• They offer competitive prices
• They encourage self service

Question 30

Give some examples of supermarkets that you know of.

Answer 30

Cold Storage, NTUC FairPrice, Prime Supermarket Ltd, Shop N Save

Question 31

Hypermarkets

What are hypermarkets?

Answer 31

Hypermarkets are stores that combine (put together) the features / characteristics of a supermarket, a department store and a specialty store. They are very large stores that are similar to supermarkets but with a greater variety of goods, i.e. they carry an enormous range of products under one roof, e.g. a full range of groceries, household products, apparel / clothing, electronic goods.

Question 32

What characteristics do hypermarkets have?

Answer 32

They:
• Have extremely large store areas, i.e. located in areas which have large land space
• Use basic / simple display racks
• Offer competitive prices
• Allow customers to choose from a wide variety of products
• Encourage self service

Question 33

Give some examples of hypermarkets.

Answer 33

Carrefour, Giant, Walmart (the world’s largest retail store with more than US$12 billion in annual sales)

Question 34

Store Image

What is store image?

Answer 34

Store image is the overall impression that customers have of the store. /
Store image refers to what the consumers / customers think of a store.

Question 35

Give some examples of the terms customers may use to describe a store’s image.

Answer 35

• Sporty
• Classy
• Funky
• Cool
• Value-for-money
• Trendy
• Exciting
• Reliable
• Clean
• Etc

Question 36

What is non-store retailing?

Answer 36

Non-store retailing is the selling and buying of goods and services outside the setting of a retail store.

Question 37

Name the various ways non-store retailing can be carried out.

Answer 37

1. E-retailing, e.g. EMALL.sg, Book Depository, Groupon, eBay, Amazon, Play.com
2. Vending machines
3. Push carts

Question 38

What is ‘door-to-door’ selling?

Answer 38

Door-to-door selling refers to selling goods and services from one house to another.

Question 39

How has advancement in technology changed the way people do business?

Answer 39

It opens doors to many business opportunities where retailers can reach customers in different parts of the world via the Internet.

Question 40

What is ‘e-retailing’?

Answer 40

E-retailing refers to the buying and selling of products electronically over the Internet.

Question 41

Do E-retailers have a physical store?

Answer 41

E-retailers typically operate their businesses online and do not have a physical store.

Question 42

Why is E-retailing gaining popularity?

Answer 42

E-retailing is gaining popularity as more people have high-speed Internet access via their computers and mobile devices. Shopping is no longer restricted to the operating hours of a retail store and an e-retailer may have regular customers from different countries. Customers can shop anywhere, at anytime as long as they have access to the Internet.

Question 43

What are the advantages of E-retailing?

Answer 43

1. Shopping is not longer restricted to the operating hours of a retail store.
2. The E-retailer may have regular customers from different countries.
3. Customers can shop anywhere, at anytime as long as they have access to the Internet.

Question 44

Why are E-retailers able to offer lower prices?

Answer 44

They are able to offer lower prices as they do not have to bear the costs of operating a retail store. However, customers may have to pay delivery costs and these can be high if the e-retailer is from another country.

Question 45

What is the process of making purchases online like?

Answer 45

1. A customer visits an online shopping website such as Zalora Singapore, The Book Depository, Qoo10, etc.
2. The customer browses through the e-catalogue.
3. The customer selects the items he or she likes and adds them to his or her shopping cart icon just as if he or she were shopping in a physical store.
4. The customer confirms his or her order and pays for the items via credit card, PayPal or fund transfer into the bank account of the shop.
5. Once the order is completed, an email is sent to notify the customer of the purchase.
6. The order is processed and the items purchased are delivered to the customer.

Question 46

What does an e-catalogue provide customers with?

Answer 46

An e-catalogue provides customers with pictures and useful information such as prices, sizes and availability of stock to help them select the products they want.

Question 47

Describe ‘vending machines’.

Answer 47

Vending machines dispense products when consumers deposit cash. Some vending machines in Singapore accept payments using electronic means such as EZ-Link cards.

Question 48

What are the advantages of selling goods from a vending machine?

Answer 48

1. Vending machines can be set up easily.

2. Vending machines can be made available anywhere - in schools, at train stations an even along the streets.

Question 49

Name some products that are usually sold from vending machines.

Answer 49

Small and inexpensive items such as drinks and snacks to non-food items such as small toys.

Question 50

What is ‘push cart retailing’? Where are they usually found?

Answer 50

Push cart retailing refers to the buying and selling of goods and services from small carts instead of a physical store. They are usually found in shopping malls.

Question 51

What are some products sold from a push cart?

Answer 51

Accessories, candies, stationery, toys, etc. Some also offer services such as personalising your laptop using laptop skins or watch repairs.

Question 52

Where did pushcarts originate from?

Answer 52

Traditional street vending. Street vending was a common sight in Old Tekka Market in the 1970s.

Question 53

What are the pros of setting up a blog shop business?

What are the disadvantages of setting up a physical store?

Answer 53

1. Rental for a physical store at a good location can be expensive. Not need to pay rent for a blog shop business.
2. It is easy to start a blog shop business.
3. It is cheap to start a blog shop business.
4. No need to have salespersons to tend a physical store. Can reduce operating costs.
5. Allows customers to shop round the clock.
6. Very little risk is involved since it is easy and cheap to set up a blog shop. More risks are involved in setting up a physical store.

Question 54

What are the cons of setting up a blog shop business? What are the advantages of setting up a physical store?

Answer 54

1. A physical store helps to increase the accessibility of the brand.
2. Difficult to try out what the product that is seen online.
3. Difficult to gauge the quality of the product until the parcel arrives.
4. Customers may still prefer to shop at a physical store because they can always make a quick exchange at the store if the product is not satisfactory.
5. A physical store provides customers with a tangible shopping experience.
6. A physical store helps to reach out to potential customers who are not net citizens.

Question 55

Give two advantages of setting up a blog shop business.

Answer 55

1. Rental for a physical store at a good location can be expensive.
2. Customers will receive their order via post.

Question 56

Give two advantages of setting up a blog shop business.

Answer 56

1. It is easy to start a blog shop business.

2. Blog shops give customer great convenience to shop round the clock.

Question 57

Give two advantages of setting up a blog shop business.

Answer 57

1. Sale persons are needed to tend the store. Operating cost will increase, i.e. sales persons are not needed to tend the store. Operating cost will decrease.
2. “I prefer shopping at my favourite blog shop because it provides good customer service and quality products.”

Question 58

Give two disadvantages of setting up a blog shop business.

Answer 58

1. “I won’t get to try out the product I see online and it is difficult to gauge the quality until the parcel arrives.”
2. A physical store helps to reach out to other potential customers other than the netizens.

Question 59

Give two disadvantages of setting up a blog shop business.

Answer 59

1. A physical store helps to increase accessibility of their brand.
2. Customers still prefer to shop at a physical store as it is assuring to see a store being physically present.

Question 60

Give two disadvantages of setting up a blog shop business.

Answer 60

A physical store gives customers a tangible shopping experience.

Question 61

Explain the term “fast-moving” products.

Answer 61

Fast-moving products refer to items that sell very quickly.

Question 62

Explain the term “retailing methods”.

Answer 62

Retailing methods are different ways retailers use to sell products to customers.

Question 63

Give some examples of fast-moving products sold at convenience stores.

Answer 63

Food such as bread, biscuits, snacks
Printed materials such as newspapers and magazines
Healthcare and beauty items such as soap, shampoo, medicine and plasters