Module 2: Retail Environment Analysis

• CLASSIFICATION METHODS FOR RETAIL INSTITUTIONS:

  1. Ownership
  2. Store-Based Retail Strategy Mix
  3. Non Store-Based Retail Strategy Mix
• Independent Retailers

  • A retailer owns one store unit
  • Small stores with a single location often owned by an individual, a family or a two-person partnership.
• Chain Store Retailers

  • Retailers who own multiple stores
  • Operates multiple outlets under common ownership.
  • They are retail outlets in multiple locations that share a brand and central management
• Franchising Retailers

  • A form of chains refer to as "franchising"
  • It refers to the method of practicing and using another's perfected business concept.
• BASIC FORMS OF FRANCHISING:

  • Product and Trade Name Franchising
  • Business Format Franchising
• Product and Trade Name Franchising - a dealer agrees to sell certain products provided by a manufacturer but can use any sales tactics he chooses.
• Business Format Franchising - a dealer must sell the franchiser’s product in the exact way the franchiser prescribes.
• Retail Strategy Mix - refers to the various features of retail strategy planning.
• A strategy mix is the firm’s particular combination of:

  • Store location
  • Operating procedures
  • Goods/Services offered
  • Pricing tactics
  • Store atmosphere
  • Customer services
  • Promotional methods
• Retailing Mix - includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise.
• Choosing the Retail Mix consists of:

  • Product
  • Price
  • Place
  • Promotion
  • Personnel
  • Presentation
• The Wheel of Retailing - is a process observed in retail marketing when what is originally a discount store improves its services and products in order to boost prices once it has become established.
• Stages of Retailing Wheel:

  1. Entry Phase
  2. Trading-Up Phase
  3. Vulnerability Phase
• Retail Life Cycle - is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages.
• Life Stages of Retail:

  1. Introduction
• Types of Store-Based Retail Strategy Mixes:

  • Food-Oriented
  • General Merchandise
• Kinds of Food-Oriented Retail Stores:

  • Convenience store
  • Conventional supermarket
  • Food-based superstore
  • Combination store
  • Box (limited-line) store
  • Warehouse store
• Kinds of General Merchandise Retail Stores:

  • Specialty store
  • Traditional department
  • Full-line discount store
  • Variety store
  • Off-price chain
  • Factory outlet
  • Membership club
  • Flea market
• Convenience Store - is usually a food-oriented retailer that is well located, is open long hours, and carries a moderate number of items.
• Conventional Supermarket

  • It is a departmentalized food store with a wide range of food and related products; sales of general merchandise.
  • A self-service food store with grocery, meat and produce departments.
• Box Store (Limited-Line) Store

  • It is a food-based discounter that focuses on a small selection of items, moderate hours of operation (compared to other supermarkets), few services, The box stores, and limited manufacturer brands.
  • They are stores that offer a single line of related products rather than a wide variety.
• Speciality Store - includes chain retail stores that sell a specific brand of clothing or clothing that is manufactured specifically for that store.
• Traditional Department Store - is a large retail unit with an extensive assortment (width and depth) of goods and services that is organized into separate departments for purposes of buying, promotion, customer service, and control.
• Full-Line Discount Store

  • It is a retail store which sells products at prices that are lower than the typical market value.
  • It may offer a wide assortment of goods with a focus on price rather than service, display, or wide choice.
• Variety Store - is a retail store that sells a wide range of inexpensive household goods.
• Factory Outlet - is a shop where a factory sells damaged or out-of-date goods directly to customers at reduced prices.
• Flea Market - is an outdoor market which sells cheap used goods.
• Non-Store Retailing - is the selling of goods and services outside the confines of a retail facility.
• Direct Marketing - is a form of retailing in which a customer is first exposed goods or services through a non-personal medium such a direct mail, newspaper, broadcast, or television, and then orders are placed by mail, phone, or computer.
• Direct Mail

  • It is a marketing effort that uses a mail service to deliver a promotional printed piece to your target audience.
  • Can narrowly target a market, achieve good coverage, send messages quickly, and personalize mailing pieces.
  • High per-reader cost, requires good quality, and considered junk mail by some consumers.
• Direct Selling

  > Manufacturers sell directly to consumers.

  > Face to face presentation, demonstration, and sale of products or services, usually at the home or office of a prospect by the independent direct sales representatives.

  > Employed by firms such as Avon, Mary Kay, and Tupperware, direct selling differs from network marketing in that it offers little or no incentives for recruiting ever increasing number of sales representatives.
• Vending Machines

  • They are a cash- or card-operated retailing format that sells goods and services.
  • Eliminates the use of sales personnel and allows 24-hour sales.
  • Machines placed wherever convenient for consumers.
  • 95 percent of the $50 billion in annual U.S. vending machine sales involve hot/cold beverages and food items.
• Non-Traditional Retailing - includes formats that do not fit into the store and non store-based categories: video kiosks and airport retailing.
• Airport Retailing features include:

  • Large group of prospective shoppers
  • Captive audience at the airport
  • Strong sales per square foot of retail space
  • Strong sales of gift and travel items
  • Difficulty in replenishment
  • Longer operating hours
  • Duty-free shopping possible
• Video Kiosks:

  • Free standing interactive computer terminal for purchasing (purchase may occur onsite or offsite)
  • Though actual sales may be less from kiosks, they influence sales by providing product information
  • Used for greeting cards, movie tickets, book sales
• Web-Based Stores include:

  • Internet
  • World Wide Web
• Internet - is a global electronic superhighway of computer networks that use a protocol and that are linked by telecommunications lines and satellites.
• World Wide Web (WWW) - is one way of accessing information on the internet, whereby people work with easy-to-use web address (sites) and pages.
• FIVE STAGES OF DEVELOPING A RETAIL WEB PRESENCE:

  1. Brochure Web Site
  2. Commerce Web Site
  3. Integrated Web Site
  4. The Webified Store
  5. Site Integrated with Manufacturer Systems