Retail Fundamentals Quiz

Retail Fundamentals

• Retail is the process of adding value to products sold directly to consumers.
• Retailers sell products/services directly to consumers.
• Wholesale involves selling products in bulk to businesses for resale.
• The supply chain encompasses companies involved in manufacturing and delivering goods to consumers.
• The Five Rights of Retail are: Correct product, price, quantity, time, and place.
• Retail Value Added includes assortment, breaking bulk, inventory holding, and services (layaway, credit, etc.).
• Vertical Integration implies control of multiple activities in a retail channel.
• Backward Integration involves a retailer taking control of distribution and/or manufacturing.
• Forward Integration occurs when a manufacturer enters the retail sector.

Retail Environment

• Macroenvironment factors include demographics, economics, political/legal, social/cultural, and technological aspects.
• Microenvironment factors include suppliers, resellers, public, competitors, and customers.
• Competition Types include:
  • Intratype: Competition between similar retailers (e.g., Walmart vs. Target).
  • Intertype: Competition between different types of retailers (e.g., Target vs. boutique).
  • Scrambled: Retailers expanding into unrelated product lines (e.g., appliance store selling home décor).

Retail Strategy and Mix

• Retail Strategy focuses on targeting markets, managing product/service mix, and creating competitive advantages.
• Retail Mix (6 Ps):
  • Personnel: Customer service.
  • Presentation: Store design and displays.
  • Product: Assortment (breadth and depth).
  • Promotion: Communications and pricing strategies.
  • Pricing: Strategies for setting prices
  • Place: Store location.

Retail Formats

• Retail Formats include Supercenters/Hypermarkets (large format, full-line discount stores with supermarkets), Warehouse Clubs (limited assortment, low service, low prices), Convenience Stores (small, quick purchases), Online Grocery (online ordering, delivery options), General Merchandise Retailers (diverse product lines), Department Stores (broad and (partially) deep assortment, services), Full-Line Discount Stores (broad variety, lower service, low prices), Specialty Stores (higher depth, narrower breadth; focusing on specific segments), Category Specialists/Killers (focus on a narrow set of product categories), Outlet Stores (manufacturer or retailer outlets selling leftover or discounted merchandise), Extreme Value Retailers (low-cost locations, limited service, low prices), and Off-Price Retailers (inconsistent assortment of brand-name goods at discounted prices).

Digital and Social Retailing

• Digital Retailing involves online activities to create value for customers.
• Social Retailing engages customers via social media interactions.
• Channels include store, online, catalog, and social media.
• Media types are owned, paid, and earned communication approaches.
• Omnichannel provides a seamless customer experience across all channels.
• M-commerce is mobile-based retail transactions.
• Showrooming is trying products in-store and buying online.

Consumer Behavior

• The consumer decision-making process includes need recognition, information search, evaluation, purchase, and post-purchase evaluation.
• Consumer needs are categorized as utilitarian (practical) and hedonic (experiential).