Retail Management Overview

Questions and Answers

What term describes retailers that offer low-priced goods and target price-sensitive consumers?

Off-Price Retailers

Extreme-Value Retailers (correct)

Independent Single Store Establishments

Corporate Chains

Which of the following is NOT a characteristic that distinguishes service retailers from merchandise retailers?

Inconsistency of the Offering

Perishability

Physical Inventory (correct)

Intangibility

What is a defining feature of corporate chains in retail?

Independent decision-making for each location

Centralized decision making (correct)

Limited to one store per brand

Decentralized ownership

What type of retail structure involves a contractual agreement allowing a franchisee to use a company's trademark?

Franchising Signup and view all the answers

What is one key advantage of independent, single store establishments?

Direct contact with customers Signup and view all the answers

Which type of supermarket focuses on cost-cutting measures and limited selection for lower prices?

Limited-Assortment Supermarkets Signup and view all the answers

What type of merchandise includes ethical and organic products?

Green Merchandise Signup and view all the answers

Which factor contributes to higher prices in department stores compared to discount stores?

Higher operational costs Signup and view all the answers

How do supermarkets enhance the shopping experience for customers?

By adding features like in-store restaurants and cooking classes Signup and view all the answers

Which of the following best characterizes supercenters?

They are a blend of supermarkets and discount stores focusing on low prices. Signup and view all the answers

What is a common characteristic of conventional supermarkets?

They offer a wide range of groceries with around 30,000 products. Signup and view all the answers

Which group of customers do limited-assortment supermarkets primarily appeal to?

Price-conscious shoppers willing to try store brands Signup and view all the answers

What is an important trend supermarkets are focusing on to stay competitive?

Enhancing fresh produce offerings Signup and view all the answers

What does the term 'variety' refer to in retailing?

The number of different merchandise categories a retailer offers Signup and view all the answers

Which of the following best describes an SKU?

Each unique item of merchandise, like a specific size or color Signup and view all the answers

What is one significant consequence of offering deep and broad assortments for retailers?

It increases inventory investment and backup stock requirements Signup and view all the answers

How do most retailers manage the higher costs associated with an expanded variety and assortment?

By increasing their prices Signup and view all the answers

Which type of services are typically considered basic customer services offered by most retailers?

Displaying merchandise and accepting credit cards Signup and view all the answers

What role does the NAICS play in the context of retailers?

It classifies retail businesses based on their offered products and services Signup and view all the answers

Why do some retailers charge for additional services like home delivery?

To manage their operational costs and staff expenses Signup and view all the answers

How are different subsectors identified within the NAICS classification system?

By the remaining four digits following the initial two Signup and view all the answers

What type of retail outlet focuses on providing a limited range of high-turnover items and usually has extended hours?

Convenience stores Signup and view all the answers

Which type of retail store is known for selling groceries online with home delivery services?

Online grocery retailers Signup and view all the answers

What distinguishes full-line discount stores from other retail formats?

Offering a wide variety of merchandise at lower prices Signup and view all the answers

Which of the following types of stores are considered 'category killers'?

Category specialists Signup and view all the answers

Department stores are facing competition primarily from which type of retailers?

Online retailers Signup and view all the answers

What is a common characteristic of drugstores compared to other retail types?

They focus primarily on health and wellness products. Signup and view all the answers

Warehouse clubs often charge for membership. What is the primary benefit of this model?

Low prices on bulk items Signup and view all the answers

Which of the following best describes specialty stores?

They focus on a narrow product category with deep assortments. Signup and view all the answers

Study Notes

Retailer Characteristics

NAICS (North American Industry Classification System) classifies businesses based on products/services with a hierarchical six-digit code.
Variety (breadth) indicates the number of different merchandise categories; assortment (depth) reflects the number of items within a category.
Stock-Keeping Unit (SKU) identifies each unique item of merchandise by size, color, etc.

Services Offered

Basic customer services include displaying merchandise, accepting credit cards, providing parking, and convenient operating hours.
Paid services may include home delivery and gift wrapping.
Specialized retailers, like Wheelworks, offer personalized services, unlike mass retailers such as Walmart.

Prices and Costs of Merchandise and Services

Deep and broad assortments attract customers but require significant inventory investment and higher costs.
Increased service offerings raise costs for staffing, facilities, and financial services, impacting retail pricing strategies.
Department stores have higher prices due to upscale merchandise, personal services, and premium locations, leading to fashion risk when trends shift.
Discount stores attract budget-conscious customers seeking lower prices over services.

Food Retailers

Conventional supermarkets provide around 30,000 products, prominently featuring perishables.
Limited-assortment supermarkets focus on efficiency with about 1,500 products, appealing to price-sensitive shoppers.
Supermarkets enhance the shopping experience with additional services like in-store restaurants and cooking classes.
Merchandise types include fresh, green (organic), ethnic, and private-label offerings.

Supercenters and Warehouse Clubs

Supercenters offer a combination of groceries and general merchandise at low prices, e.g., Walmart Supercenter.
Warehouse clubs, such as Costco, provide bulk purchasing options for members with minimal service.

Convenience Stores

Small, accessible retail outlets like 7/11 offer a limited range of high-turnover items, often at higher prices due to the convenience factor.

Online Grocery Retailers

Digital platforms (e.g., Amazon Fresh, Kroger) provide home delivery services and a wide range of products, leveraging technology for inventory management and customer service.

General Merchandise Retailers

Department stores provide diverse product ranges but face competition from online shopping, prompting enhancements in store experience and digital presence.
Full-line discount stores offer lower-priced goods across various merchandise categories.
Category specialists focus on specific product categories, often dominating that market niche, like Ace Hardware for home improvement.
Specialty stores deliver deep assortments in narrow categories, emphasizing specialized customer service.
Drugstores mainly sell health-related products and personal care items, while extreme-value retailers serve price-sensitive consumers with low-priced goods.

Service Retailing

Differences between service and merchandise retailers include intangibility, simultaneous production and consumption, perishability, and inconsistencies in offerings.

Types of Ownership

Independent, single-store establishments allow direct owner-customer interaction, facilitating quick responses to consumer needs.
Corporate chains operate multiple outlets with centralized decision-making; examples include Walmart and Macy's.
Franchising involves a contractual agreement where the franchisor grants rights to use trademarks or business symbols to the franchisee for a fee and ongoing royalties.

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Description

This quiz explores various types of retailers, including food and general merchandise retailers, as well as service retailing. It highlights retailer characteristics and ownership types using classifications such as NAICS. Test your knowledge on the retail landscape and its classification.