Types of retailers
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Types of retailers Types of retailers Presentation Transcript

  • TYPES OF RETAILERSOver time, different types ofretailers have emerged andprospered because they haveattracted and maintained asignificant customer base.
  • FOOD RETAILERS Supermarkets Supercenters Warehouse Clubs Convenience Stores Box(Limited-Line) Store
  • SUPERMARKETS A Conventional supermarket is a self-servicedfood store offering groceries, meat, and producewith limited sales of non food items, such ashealth and beauty aids and general merchandise. Whereas conventional supermarkets carry about30,000 SKUs, Limited assortment supermarkets,also called extreme value food retailers, onlystock 1,250 SKUs. Rather than carrying twenty brands of laundrydetergent, limited assortment stores offer one ortwo brands and sizes, one of which is a storebrand. Stores are designed to maximize efficiencyand reduce costs.
  • SUPERCENTERS The fastest growing retail category, are large storesthat combine a supermarket with a full-line discountstore. By offering board assortments of grocery and generalmerchandise products under one roof, super centersprovide a one-stop shopping experience. Hypermarkets: are also large combination food andgeneral merchandise stores. Hypermarkets typicallystock fewer SKUs than supercenters - between 40,000and 60,000 items ranging from groceries, hardware,and sports equipment to furniture and appliance tocomputers and electronics.
  • WAREHOUSE CLUBS Warehouse clubs are retailers that offer a limited andirregular assortment of food and general merchandise withlittle service at low prices for ultimate consumers andsmall businesses. Warehouse clubs are large (at least 100,000-150,000square feet) and typically located in low-rent districts.They have simple interiors and concrete floors. Warehouse clubs can offer low prices because they uselow-cost locations, inexpensive store designs, and littlecustomer service and keep inventory holding costs low bycarrying a limited assortment of fast selling items. Most warehouse clubs have two types of members:wholesale members who own small businesses andindividual members who purchase for their own use.
  • CONVENIENCE STORES Convenience stores provide a limited variety andassortment of merchandise at a convenientlocation in 2,000- 3,000 square foot stores withspeedy checkout. They are the modern version of the neighborhoodmom-and pop grocery/general store. Customerscan shop very quickly. Due to their small size and high sales,convenience stores typically receive deliveriesevery day. Convenience stores only offer limitedassortments and variety, and they charge higherprices than supermarkets.
  • BOX(LIMITED-LINE) STORE The Box (Limited-Line) Store is a food baseddiscounter that focuses on a small selection of items,moderate hours of operation (compared to othersupermarkets), few additional services, and limitedmanufacturer brands. There stock usually less items, few or norefrigerated perishables, and few sizes and brandsper item. Items are displayed in cut cases.Customers do their own bagging. Box stores depend on low –priced private-labelbrands. They aim to price merchandise 20 to 30percent below supermarkets.
  • GENERAL MERCHANDISERETAILERS Department stores Full-line discount stores Specialty storesDrug storesCategory SpecialistsHome improvement centers Off-price retailers Extreme value retailers Factory Outlet Stores Hypermarkets Variety Store Flea Market
  • DEPARTMENT STORES Department stores are retailers that carry a broadvariety and deep assortment, offer customerservices, and organize their stores into distinctlyseparate departments for displaying merchandise. Traditionally, department stores attractedcustomers by offering a pleasing ambience,attentive service, and a wide variety ofmerchandise under one roof. They sold both soft goods (apparel and bedding)and hard goods (appliances, furniture, andconsumer electronics). But now most department stores focus almostexclusively on soft goods.
  • FULL-LINE DISCOUNT STORES Full-line discount stores are retailers that offer abroad variety of merchandise, limited service, andlow prices. Discount stores offer both private and national label,but these brands are typically less fashion orientedthan the brands in department stores. Target is becoming one of the most successfulretailers in terms of sales growth and profitability.Target succeeds because its stores offer fashionablemerchandise at low prices in a pleasant shoppingenvironment.
  • SPECIALTY STORES Specialty stores concentrate on a limited number ofcomplementary merchandise categories and providea high level of service in relatively small stores. Specialty stores tailor their retail strategy toward avery specific market segment by offering deep butnarrow assortments and sales associate expertise. Because specialty retailers focus on specific marketsegments, they are vulnerable to shifts in consumertastes and preferences.
  • DRUGSTORES Drugstores are specialty stores that concentrateon health and personal grooming merchandise. Drugstores, particularly the national chains, areexperiencing sustained sales growth because theaging population requires more prescriptiondrugs. Drugstores are also being squeezed byconsiderable competition from pharmacies indiscount stores and supermarkets, as well asfrom prescription mail-order retailers. Drugstore retailers are using systems to allowpharmacists time to provide personalized service.
  • CATEGORY SPECIALISTS Are big box discount stores that offer a narrow butdeep assortment of merchandise. These retailers are basically discount specialtystores. Most category specialists use a self-serviceapproach, but some specialists in consumerdurables offer assistance to customers.
  • HOME IMPROVEMENT CENTERS One of the largest and most successful types ofcategory specialist is the home improvementcenter. A home improvement center is a categoryspecialist offering equipment and material usedby do-it-yourselfers and contractors to makehome improvements.
  • OFF-PRICE RETAILERS Offer an inconsistent assortment of brand namemerchandise at low prices. Off-price retailers sell brand name and evendesigner label merchandise at low prices throughtheir unique buying and merchandisingpractices. Most merchandise is bought opportunisticallyfrom manufacturers or other retailers withexcess inventory at the end of the season. Due to this pattern of opportunistic buying,customers can’t be confident that the same typeof merchandise will be in stock each time theyvisit the store.
  • EXTREME VALUE RETAILERS Are small, full-line discount stores that offer alimited merchandise assortment at very lowprices. Extreme value retailers are one of the fastestgrowing segments in retailing. Like limitedassortment food retailers, extreme value full-lineretailers reduce costs and maintain low prices byoffering a limited assortment and operating inlow-rent, urban, or rural locations.
  • FACTORY OUTLET STORES Outlet Stores are off-price retailers owned bymanufacturers or by department or specialtystore chains and are frequently referred to asfactory outlets. A factory outlet is a manufacturer–owned storeselling manufacturer closeouts, discontinuedmerchandise, irregulars, cancelled orders, andsometimes, in season, first quality merchandise. They closely resemble shopping centers, both interms of size, layout, and in carefully controlledtenant mix, with manufacturers operatingseparate units on a single co-coordinated site.
  • HYPERMARKETS A hypermarket is a very large retail storeoffering low prices. It combines a discount store and superstore foodretailer in one warehouse like building. Hypermarkets can be up to 300,000 square feetand stock over 50,000 different items. All hypermarkets are based on three concepts of:one stop shopping, ample free parking and adiscount pricing strategy.
  • VARIETY STORE A variety store handles a wide assortment ofinexpensive and popularly priced goods andservices, such as stationary, gift items, women’saccessories, health and beauty aids, lighthardware, toys, house ware and confectioneryitems. They do not carry full product lines, may not bedepartmentalized and do not deliver products. Transactions are often on a cash basis. There areoften displays and few salespeople.
  • FLEA MARKET A flea market has many retail vendors offering arange of products at discount prices in plainsurroundings. It is rooted in the centuries old tradition of streetselling -shoppers touch, sample and haggle over theprices of items. Price-conscious consumers who find that other retailformats have upgraded merchandise and customerservice or raised prices frequent them. Many flea markets are located in nontraditional sitesnot normally associated with retailing: racetracks,stadiums and arenas.
  • NON STORE RETAILERS Types of retailers thatoperate primarily throughnon-store channels
  • ELECTRONIC RETAILERS Electronic Retailing (also called e-tailing, onlineretailing, and Internet retailing) is a retail format inwhich the retailers communicate with customers andoffer products and service for sale over the Internet. Internet continues to provide opportunities forentrepreneurs in the retail industry, it is now primarilyused by traditional retailers as a tool to complementtheir store and catalog offerings, grow their revenues,and provide more value for their customers. Most of the retailers that sell merchandise exclusivelyover the Internet target niche markets – markets thatare so small and dispersed that they cannot beeconomically serviced by stores.
  • CATALOG AND DIRECT-MAILRETAILERS Catalog retailing is a non-store retail format in whichthe retail offerings are communicated through acatalog, whereas direct-mail retailers communicatewith their customers using letters and brochures. In 2003, $125 billion of merchandise and serviceswere sold through catalogs, and over 17 billioncatalogs were distributed in the United States. The merchandise categories with the greatest catalogsales are apparel, gifts, books, and home décor.
  • DIRECT SELLING Direct selling is a retail format in whichsalespeople, frequently independentbusinesspeople, contact customers directly in aconvenient location, either at the customer’shome or at work; demonstrate merchandisebenefits and/or explain a service; take an order;and deliver the merchandise or perform theservice. Direct selling is a highly interactive form ofretailing in which considerable information isconveyed to customers through face-to facediscussions with salespeople.
  • TELEVISION HOME SHOPPING Television home shopping is a retail format inwhich customers watch a TV program thatdemonstrates merchandise and then place ordersfor the merchandise by telephone. The three forms of electronic home shoppingretailing are o Cable channels dedicated to television shopping o Infomercials o Direct-response advertising
  • VENDING MACHINE RETAILING Vending machine retailing is a non-store formatin which merchandise or services are stored in amachine and dispensed to customers when theydeposit cash or use a credit card. Vending machines are placed at convenience,high-traffic locations, such as in the workplace oron university campuses, and primarily containsnacks and drinks.
  • OWNERSHIP BASED Independent, Single-StoreEstablishments Corporate Retail Chains Franchising Leased Department Consumer Co-operatives
  • INDEPENDENT, SINGLE-STOREESTABLISHMENTS Retailing is one of the few sectors in our economyin which entrepreneurial activity is extensive. Many of these retail start-ups are ownermanaged, which means management has directcontact with customers and can respond quicklyto their needs. Small retailers are also very flexible and cantherefore react quickly to market changes andcustomer needs.
  • CONT. To better compete against corporate chains, someindependent retailers join a wholesale-sponsoredvoluntary cooperative group, which is anorganization operated by a wholesaler offering amerchandising program to small, independentretailers on a voluntary basis. In addition to buying, warehousing, anddistribution, these groups offer members servicessuch as advice on store design, and layout, siteselection, bookkeeping and inventory managementsystems, and employee training programs.
  • CORPORATE RETAIL CHAINS A retail chain is a company that operatesmultiple retail units under common ownershipand usually has centralized decision makingfor defining and implementing its strategy.
  • FRANCHISING Franchising is a contractual agreement betweena franchisor and a franchisee that allows thefranchisee to operate a retail outlet using a nameand format developed and supported by thefranchisor. In a franchise contract, the franchisee pays alump sum plus a royalty on all sales for the rightto operate a store in a specific location. Thefranchisee also agrees to operate the outlet inaccordance with procedures prescribed by thefranchisor.
  • LEASED DEPARTMENT A Leased Department is a department in a retailstore rented generally by a manufacturer. Thelessee is responsible for all aspects of businessand pays the store a rent. The store may impose operating restrictions forthe leased department to ensure the overallconsistency. The leased departments choose to operate incategories that are generally on the fringe of thestore’s major product lines, such as in-storebeauty salons, banks, photographic studios andfood courts.
  • CONSUMER CO-OPERATIVES A Consumer Cooperative is a retail firm in which agroup of consumers invest in the enterprise. Theofficers are elected. Consumer-members share the profits or savings thataccrue. Such retailers are many in number but smallin size and are most popular in food retailing. They are started mainly to guard against themalpractice that many retailers indulge in andeither charge higher prices or offer inconsistentquality of merchandise.