What are the different types of retailers?
How do retailers differ in terms of how
they meet the needs of their customers?
How do services retailers differ from
What are the types of ownership for retail
New Types of Retailers
Growth In Services Retailer
Demise of Pure Electronic Retailers (Webvan,
Growth in Use of Multi-Channel Retailing by
Increase Use of Technology to Reduce Cost;
Increase Value Delivered
The type of retailer a consumer chooses to use
depends on the benefits the consumer is
ExampleYou want to buy and send a sweater to your
Aunt in Washington for her birthday, you may
prefer to look online and conveniently have
the retailer send the package to the address.
On the other hand you may want to go to a
department store like Gordman’s to be able to
see the items and maybe try something on for
Variety (breadth of merchandise): wide vs. narrow
- The number of merchandise categories
Assortment (depth of merchandise): deep vs. shallow
-the number of items in a category (SKUs)
North American Industry Classification
System (NAICS)- The US, Canada, and
Mexico have developed this
classification scheme to collect data on
business activity in each country.
Every business is assigned a hierarchical,
six-digit code based on the type of
products and services it sells.
Conventional supermarket- is a large,
self-service retail food store offering
groceries, meat, and produce as well as
some non food items. (30,000 SKUs)
Limited-assortment supermarkets and
Extreme-value food retailers only stock
about (2,000 SKUs).
SKUs- are stock-keeping units
Supercenters- are large stores that
combine a supermarket with full-line
Walmart operates 2700 stores in the US
accounting for 81% of total supercenter
Hypermarkets- are very similar to
supercenters but are more common
outside the US and focus more on
Warehouse clubs- 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.
Most have to types of members,
wholesale members who own small
business and individuals who purchase
for their own use.
Convenience stores- provide a limited
variety and assortment of merchandise
at a convenient location in 3000 to 5000
square foot stores with speedy
Over half the items bought are
consumed within 30 minutes of
Majority of sales come from gas and
The major types of general merchandise
1. Department stores
2. Full-line discount stores
3. Specialty stores
4. Home improvement centers
5. Off-price retailers
6. Extreme-value stores.
Department stores – are retailers that
carry a broad variety and deep
assortment, offer customer service and
organize their stores into distinct
departments for displaying merchandise.
They provide soft goods (apparel and
bedding) and hard goods (appliances,
furniture, and consumer electronics)
chains with exclusive
Retailers sell more
merchandise with less
Value-oriented , caters
to more priceconscious consumers,
very little customer
Nordstrom, Saks Fifth
Macy’s and Dillards
Sears, JCPenny, Kohl’s,
Full-line discount stores- are retailers that
offer a broad variety of merchandise,
limited services, and low prices. They
offer both private label and national
Specialty stores- concentrate on a
limited number of complementary
merchandise categories and provide a
high level of service. (Victoria’s Secret,
Drugstores- are specialty stores that
concentrate on health and personal
grooming merchandise. Prescription
Pharmaceuticals represent almost 70% of
3. Rite Aid
that offer a
Bed Bath &
Toys “R” Us
Extreme-value retailers- are small
discount stores that offer a limited
merchandise assortment at very low
Some of the extreme-value stores we
have in this area are Family Dollar and
Closeout retailers- offer an inconsistence
assortment of brand-name merchandise
at a significant discount off the
They buy excess inventory, close-outs,
and irregulars from other stores at
typically ¼ to 1/5 of the original price.
Outlet stores- are off-price retailers
owned by manufacturers or retailers.
Service retailers- are
firms that primarily
sell services rather
and are a large and
growing part of the
Intangibility- services are less tangible than
products- customers cannot touch and feel
services, so it is difficult for them to evaluate
before they buy.
Simultaneous Production and Consumptionservices create and deliver the service as the
customer is consuming it.
Perishability- Services are perishable. They
cannot be saved, stored, or resold.
Inconsistency- Products made by a machine
are very tight in quality, a service will never be
identical because it depends on the person.
There are three major classification of
retail ownership are:
Single-store retailers can tailor their
offerings more to their customers’ needs,
and corporate chains can more
effectively negotiate lower prices.
Single-store retailers typically rely on their
owners/managers’ capabilities to make
a broad range of necessary retail
Retail chain- is a company that operates
multiple retail units under common
ownership and usually has centralized
decision making for defining and
implementing its strategy.
Franchising- is 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
Makes up 40% of retail sales in the US.