Questions and Answers
Retailing consists only of the activities required to produce goods for consumers.
False
The U.S. Census Bureau uses four-digit NAICS codes for classifying all retailers.
False
Retailers with multiple outlets have a competitive advantage due to their ability to spread fixed costs over more stores.
True
Census data is utilized to analyze economic development and labor trends in the retail sector.
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The NAICS code 513322 is assigned to information services.
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The optional stock list allows each store in a retail chain the freedom to adapt its merchandise to local preferences.
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A channel advisor plays a crucial role in planning and coordinating activities among marketing channel institutions.
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Standard stock lists are used to give individual stores in a retail chain the discretion to select their merchandise.
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Larger retailers are often unable to act as channel captains in the marketing channel.
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Study Notes
Retailing Overview
- Retailing involves final steps to transfer merchandise to consumers or provide services.
- Any firm selling products or services to final consumers is classified as a retailer.
Retail Classification by Census Bureau
- The U.S. Census Bureau uses three-digit NAICS codes for retailer classification.
- NAICS Code examples:
- 51 – Information
- 513 – Broadcasting and telecommunications
- 5133 – Telecommunications
- 51332 – Wireless telecommunication carriers
- 513322 – Cell phone services
Retail Operations and Competitiveness
- Retailers with multiple outlets can:
- Distribute fixed costs over more locations.
- Achieve better purchasing economies.
- Single-unit retailers benefit from:
- Higher employee motivation and productivity.
- Focused merchandise strategy tailored to local market.
Merchandising Methods
- Standard Stock List: Same merchandise across all chain stores.
- Optional Stock List: Each store can customize product mix to local preferences.
- Channel Advisor/Captain: Influential entity in the marketing channel orchestrating cooperation among players.
- Private label branding allows retailers to create their own brands through partnerships with manufacturers.
Changes in Retailing Landscape
- Retailers are exploring alternative shopping formats, combining culture, entertainment, and shopping.
- Advances in technology are shifting the definition of retailer size; traditional classifications are evolving.
Retail Performance Metrics
- Gross Margin Percentage: Gross margin as a percentage of net sales.
- Gross Margin: Net sales minus cost of goods sold.
- Operating Expenses: Costs related to running the retail business, excluding merchandise.
- Inventory Turnover: Frequency of selling inventory within a year.
Retailer Categories by Performance
- High-Performance Retailers: Show significantly better financial outcomes compared to industry norms.
- Low-Margin/Low Turnover Retailers: Low gross margin percentage and low inventory turnover.
- Low-Margin/High Turnover Retailers: Low gross margin percentage but high turnover rate.
- High-Margin/Low Turnover Retailers: High gross margin percentage with low turnover.
- Clicks & Mortar Retailers: Operate both online and physical stores, reflecting a hybrid model.
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Description
Explore the essential concepts of retail management through this quiz. It covers key elements like merchandise placement, outlet statistics, and the relationship between margins and turnover. Test your understanding of the various categories of retailers and their significance in the retail industry.
