CHAPTER 1

• Retailing


  Consist of the final activities and steps needed to place merchandise made elsewhere into the hands of the consumer and to provide services to the consumer
• Bricks and Mortar Retailers


  • Retailers that operate out of a physical and geographic based building or store
• 1. Tailing

  Electronic retailing, the sale of goods and services through the Internet
• 1. Tailing


  Wherein the power of the mobile phone technology is harnessed in retailing
• Price Competition


  Competitive pricing is the process of selecting strategic price points to best take advantage of a product or service-based market relative to competition
• Lower prices


  Improve operating efficiency
• Same-Store Sales


  Compares an individual store's sales to its sales for the same month in the previous year
• Store Size


  The amount of selling space will be one of the most important factors in selecting a location
• Scrambled Merchandising


  Exists when a retailer handles many different and unrelated items
• Factors influencing a Retail firm

  • Behavior of Consumers
  • Behavior of Competition
  • Behavior of the Supply Chain
  • Legal and Ethical System
  • State of Technology
  • Socioeconomic Environment
• NAICS Codes


  The U.S Bureau of the Census classifies all retailers using three-digit North American Industry Classification System (NAICS) codes
• Number of Outlets


  The number of outlets each firm operates
• Gross-margin percentage


  A measure of profitability derived by dividing gross margin by net sales
• Gross margin


  The difference between net sales and cost of goods sold
• Operating expense


  Expenses that a retailer incurs in running the business other than the cost of the merchandise
• Inventory turnover


  The number of times per year, on average, that a retailer sells its inventory
• High-performance retailers


  Retailers that produce financial results substantially superior to the industry average
• Concepts of Margin and Turnover

  • Low-margin/low-turnover retailer
  • High-margin/low-turnover retailer
  • Low-margin/high-turnover retailer
  • High-margin/high-turnover retailer
• Retail Locations


  • Metropolitan area
  • Central business district
  • Regional shopping center
  • Neighborhood shopping center
  • Freestanding unit
  • Nontraditional retail areas
• Store Size

  May be classified by sales volume and number of employees
• Store management


  • Involves responsibility for selecting, training, and evaluating personnel, as well as in-store promotions, displays, customer service, building maintenance, and security
• Buying


  • Uses quantitative tools to develop appropriate buying plans for the store's merchandise
• Salary


  Entry-level retail managers or buyers who do exceptionally well can double or triple incomes in three to five years. Retail entrepreneurs can build high profitability and create economic wealth
• Career Progression


  • A person capable of handling increasing amounts of responsibility can move up quickly
• Geographic Mobility


  In order to progress rapidly, a person must often be willing and able to make several moves, even if the changes may not be attractive in terms of an individual's lifestyle
• Societal Perspective


  Professional merchants are considered respected and desirable members of their community, state, and nation. Leading retail executives are well-rounded individuals with a high social consciousness. Retailers serve society not only outside their retailing career but also within it as well
• Prerequisites for Success


  • Hard Work
  • Analytical Skills
  • Creativity
  • Decisiveness
  • Flexibility
  • Initiative
  • Leadership
  • Organization
  • Risk Taking
  • Stress Tolerance
  • Perseverance
  • Enthusiasm
• Analytical Method


  The analytical retail manager is a finder and investigator of facts. These facts are summarized and synthesized so a manager can make decisions systematically
• Creative Method


  The creative retail manager is an idea person. This retail manager tends to be a conceptualizer and has a very imaginative and fertile mind capable of creating a highly successful retail chain
• The synthesis of creativity and analysis is necessary in all fields of retailing. To decide who or what to duplicate requires not only creativity but also an analysis of the strategies that retailers are pursuing
• Four major orientations


  • Environmental - to anticipate and adapt continuously to external forces in the environment
  • Management Planning - adapt systematically to a changing environment. A retailer who wants to have the competitive edge must plan today for the future
  • Profit - all retail decisions will have an effect on the firm's financial performance
  • Decision Making - to focus on the need to collect and analyze data for making intelligent retail decisions