Chapter 13: Retailing Retailing retailing involves the sale ...


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Chapter 13: Retailing Retailing retailing involves the sale ...

  1. 1. Chapter 13: Retailing
  2. 2. Retailing <ul><li>retailing involves the sale of products and services to end consumers for their personal non-business use </li></ul><ul><li>not all sales by retailers are retail sales. why? </li></ul><ul><li>similarly, not all retailing is done by retailers </li></ul><ul><li>most of the retailers of Canada are very small </li></ul><ul><li>there is considerable concentration in retailing, accounted for by the large chains </li></ul><ul><li>many small retailers join contractual vertical marketing systems to increase their competitiveness </li></ul>
  3. 3. Figure 13-1 Total Retail Trade in Canada, Selected Years
  4. 4. Physical Facilities of Retailers <ul><li>most retailers operate from stores, although more now engage in nonstore retailing </li></ul><ul><li>those that operate stores must consider where to locate their stores, how to design them, and what physical layout to use </li></ul><ul><li>much retailing in Canada is concentrated in shopping centres which range in size from small neighbourhood convenience centres to very large regional centres </li></ul>
  5. 5. Forms of Retailing <ul><li>most retailers are independents </li></ul><ul><li>corporate chains are centrally owned and managed which means that individual stores have relatively little autonomy </li></ul><ul><li>chains can generally offer their customers lower prices because of a lower cost structure </li></ul><ul><li>they spread their risk and exposure over a larger number of stores; they can experiment and gain economies of scale in advertising </li></ul><ul><li>however, they tend to be quite standardized </li></ul>
  6. 6. Franchising and Other VMS <ul><li>retail co-operatives and voluntary chains offer retailers increased buying power and the benefits of management and marketing support </li></ul><ul><li>product and trade name franchising allows a retailer to use the franchisor’s trade name for promotional purposes; focus is on what is sold </li></ul><ul><li>in business format franchising , a firm with a track record sells the right to operate identical businesses; focus is on how the business is run </li></ul>
  7. 7. Major Types of Retailers <ul><li>department stores offer a wide variety of mechandise and services and don’t compete on the basis of price; they are facing intense competition and high operating costs </li></ul><ul><li>discount houses are large-scale chain retailers that offer a wide range of products but less depth; they offer low prices and fewer services and have succeeded in keeping costs low through use of technology </li></ul>
  8. 8. Limited-line Retailers <ul><li>limited-line retailers offer customers less selection, but great depth within their lines </li></ul><ul><li>specialty stores carry a very narrow product line, usually specializing in a single category </li></ul><ul><li>off-price retailers offer a deep assortment in a narrow line, low prices, and few services; these include factory outlets </li></ul><ul><li>category-killer stores offer a very wide variety and low prices; dominate the category </li></ul>
  9. 9. Other Forms of Retailing <ul><li>many of the established retailers are moving toward new forms of distribution, including telephone and Internet shopping </li></ul><ul><li>supermarket retailing has extended with the opening of superstores and combination stores </li></ul><ul><li>convenience stores are open 24 hours </li></ul><ul><li>warehouse club chains have made a major entry into Canada in recent years; they offer a wide breadth of products, but little depth </li></ul>
  10. 10. Nonstore Retailing <ul><li>there has been considerable growth in nonstore retailing with advancing technology and changing consumer shopping preferences </li></ul><ul><li>direct selling avoids using intermediaries </li></ul><ul><li>telemarketing uses sales people on the phone to sell products and services </li></ul><ul><li>direct marketing uses catalogues, direct mail, television shopping, and the Internet </li></ul><ul><li>many products and services are now sold through vending machines </li></ul>
  11. 11. Online Retailing <ul><li>more and more companies are selling directly to consumers over the Internet </li></ul><ul><li>those that operate only online have struggled to become profitable; those that also have a physical stores are more likely successful </li></ul><ul><li>shopping-cart abandonment is high; challenge to turn browsers into buyers </li></ul>
  12. 12. Retailing Management <ul><li>in a competitive market, positioning of retailers is a challenge </li></ul><ul><li>in many retail operations, managing through seasonal and fashion cycles is necessary </li></ul><ul><li>through technology, retailers will have access to considerable volumes of information; improved productivity will be one result </li></ul><ul><li>retailers will place greater emphasis on convenience, customer service, and customer retention </li></ul>
  13. 13. Figure 13-2 Fashion-Adoption Processes