introduction to on site fashion retailing

1. Introduction to On-
Site Fashion Retailing
Chapter # 2

2. Topics Covered
• Classification of
on-site fashion
retailers
• Specialty stores
• Department store
retailing
• Spin-off store
concept
• Discount
organizations, Off-
pricers &
Warehouse clubs
• Multichannel
fashion retailing
• Overseas
expansion

3. Specialty Stores
• Merchants who restrict their offerings to
one product classification
• The range may be narrow such as shoes
(Bata) or more diverse, as in menswear
(Shahid Afridi)
• Size of operations vary from one-unit
business to giants

4. Common Characteristics
of Specialty Stores
• Broad assortment of specialized
items
• Size of the unit or retail outlet
• Personalized service

5. The “Sub-Specialty”
Store
• Once merchandisers reach a certain
volume with their primary offering, they
may enter into a more defined niche
• For example Gap came out with Baby Gap,
Toys R Us introduced Babies R Us, and
Bata ventured into Bubblegummers.

6. Department Stores
• A store which assigns similar types of
merchandise to specific areas known as
departments
• The mainstay of fashion retailing world over
• In contrast to specialty store, the department
store offers a merchandise mix comprising of a
host of product categories broadly divided into
hard and soft goods
• Hard goods generally describe home appliances,
furniture and computers while soft goods include
apparel and accessories

7. Department Stores
• Stores which offer both hard and soft
goods are called full-line department
stores (e.g. Sears and Macy’s)
• In contemporary times, full-line
department stores are concentrating on
soft goods offerings as they have found
that it is difficult to compete with
specialized appliance retailers

8. Specialized Department
Stores
• These stores restrict their mix exclusively
to apparel and a host of accessories (soft
goods)
• Larger than specialty shops, often
spanning floors
• Well known examples: Lord & Taylor, Saks
Fifth Avenue, Nordstrom (see fashion
retailing spotlight on Nordstrom, ch:1, p.
9)

9. Success Factors for
Department Stores
• One stop shopping
• Sales assistance
• Gift Registries (brick & click
operations)
• Dining Facilities
• Alterations

10. Off-Price Merchants
• In 1921, Frieda Loehmann, a former department
store buyer, opened her first store in a former
automobile showroom Brooklyn, New York.
• She bought seasonal overstocks from top New
York designers and sold them at bargain prices,
thus giving rise to the concept of Off-price
retailing
• Apart from Loehmanns, there are competitors like
T.J. Maxx, Burlington’s Coat Factory and Stein
Mart

11. Off-price Retailing
• Off-pricers make use of closeouts by marquee designers
such as Ralph Lauren, Calvin Klein and DKNY who are eager
to dispose of items to make room for the new season’s
offerings
• Store buyers go from vendor to vendor seeking out
leftovers, closeouts and odd lots, buying them at a fraction
of their cost
• Many make use of internet and log on directly to web sites
owned by vendors with whom they have established
relationships
• They are scavengers of the retail fashion market!
• Disadvantage: Cannot guarantee continuity or consistency in
their offerings

12. Discount Operations
• Retailers who offer a host of fashion
products (amongst other merchandise) at
lower prices
• Follow a different business model from
Off-pricers – discounters deal directly
with the vendors buying in huge quantities
allowing them to receive a price advantage
• Best known amongst this type of retailers
is Wal-Mart

13. Warehouse Clubs
• Though generally known for foodstuff,
they have a specialized department for
apparel and accessories.
• Warehouse clubs charge membership fee
from their customers which allow them to
charge lower prices
• Costco is the largest warehouse club in the
world

14. Spin-offs & Branches
• Small stores by large retail
merchants featuring limited
representation of their product mix
(e.g. Saks Fifth Avenue, Denizen by
Levi’s etc.)

15. Boutiques
• Small businesses (one unit enterprises)
which differentiate themselves by
offering an assortment of higher-priced
items in small quantities, thereby providing
a degree of exclusivity for their clientele.
• Many boutiques feature custom-designed
clothing and unique accessories
• Cater to the needs of a small but affluent
market

16. Flea Market Vendors
• Offer bargain merchandise to
shoppers in makeshift environments
• Most of the fashion merchandise is
either irregular or copy of branded
merchandise

17. Designer Shops &
Company Outlets
• A retail outlet owned and operated
exclusively by the fashion
merchandiser, only featuring its own
collection (e.g. Maria B.)
• Enables designer company to have
control over distribution and offer
better price bargain to customers

18. The Global Scene
• Wholly owned subsidiaries
• Franchises & Licenses
• Contract manufacturing
• Joint ventures
• Acquisition (common strategy of
Department Store Companies such as
Federated, May and Saks)
• Multi-channel expansion (brick & click
operations)

19. ASSIGNMENT NO. 1
• Bring a written (printed) solution to
Case Problem 1 given at the end of
Chapter 1.
• Different solutions will be presented
and discussed at the beginning of the
class next week.