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Types of retailers

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  • 1. 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 merchandise retailers?  What are the types of ownership for retail firms? 
  • 2.        New Types of Retailers Increased Concentration Globalization Growth In Services Retailer Demise of Pure Electronic Retailers (Webvan, eToys, etc) Growth in Use of Multi-Channel Retailing by Traditional Retailers Increase Use of Technology to Reduce Cost; Increase Value Delivered
  • 3.  The type of retailer a consumer chooses to use depends on the benefits the consumer is seeking.  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 yourself.
  • 4. 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) 2-5
  • 5. 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. 
  • 6. 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 
  • 7. 2-9
  • 8. Supercenters- are large stores that combine a supermarket with full-line discount store.  Walmart operates 2700 stores in the US accounting for 81% of total supercenter sales.  Hypermarkets- are very similar to supercenters but are more common outside the US and focus more on perishables. 
  • 9. 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. 
  • 10. Convenience stores- provide a limited variety and assortment of merchandise at a convenient location in 3000 to 5000 square foot stores with speedy checkouts.  Over half the items bought are consumed within 30 minutes of purchase.  Majority of sales come from gas and cigarettes. 
  • 11. The major types of general merchandise retailers are: 1. Department stores 2. Full-line discount stores 3. Specialty stores 4. Home improvement centers 5. Off-price retailers 6. Extreme-value stores. 
  • 12. 2-14
  • 13. 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) 
  • 14. Tier 1 Tier 2 Tier 3 Upscale, high-fasion chains with exclusive designer merchandise and excellent customer service Retailers sell more modestly priced merchandise with less customer service Value-oriented , caters to more priceconscious consumers, very little customer service Bloomingdale, Nordstrom, Saks Fifth Avenue Macy’s and Dillards Sears, JCPenny, Kohl’s, Gordmans
  • 15. 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 brands.  Specialty stores- concentrate on a limited number of complementary merchandise categories and provide a high level of service. (Victoria’s Secret, Gamestop) 
  • 16. Drugstores- are specialty stores that concentrate on health and personal grooming merchandise. Prescription Pharmaceuticals represent almost 70% of their sales.  Large drugstores: 1. Walgreens 2. CVS 3. Rite Aid 
  • 17.  Category specialists- are big-box stores that offer a narrow but deep assortment of merchandise. Apparel Home Toys Mens Warehouse Bed Bath & Beyond Toys “R” Us Books Home Improvement Pet Supplies Menards Barnes& Noble Consumer Electronics Sporting Goods Best Buy Cabela’s Entertainment Dave & Busters PetSmart
  • 18. Extreme-value retailers- are small discount stores that offer a limited merchandise assortment at very low prices.  Some of the extreme-value stores we have in this area are Family Dollar and Dollar General. 
  • 19. Closeout retailers- offer an inconsistence assortment of brand-name merchandise at a significant discount off the manufacture’s price.  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. 
  • 20.  Service retailers- are firms that primarily sell services rather than merchandise, and are a large and growing part of the retail industry.
  • 21.     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.
  • 22.  1. 2. 3. There are three major classification of retail ownership are: Independent, single-store establishments Corporate chains Franchises
  • 23. 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 decisions. 
  • 24. 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.  Examples are: 1. Walmart 2. Target 3. Gap 
  • 25. 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 fanchisor.  Makes up 40% of retail sales in the US. 
  • 26. Food Retailers Services Retailers Merchandise Retailer