Retailing and Supply Chain Basics

• Retailing involves business activities adding value to goods/services for personal/family use.
• Retailers are companies offering products/services to individuals/families.
• A supply chain is a network of firms creating and delivering goods/services to consumers.

Retailer's Role in Supply Chain

• Manufacturer
• Wholesaler
• Retailer
• Consumer

Retailer's Form Value

• Provide assortment, offering multiple items at once.
• Break bulk, enabling purchases in desired quantities.
• Hold inventory, keeping items readily available.
• Provide services like viewing before purchase and earning credit.

Cost of Channel Activities

• While creating value for customers, channel members' efforts increase item/service prices.

Retailers in Wholesaling and Manufacturing

• Wholesalers purchase/store large merchandise quantities, reselling them in smaller quantities to merchants.
• Vertical integration involves a company engaging in multiple channel operations.

Examples of Vertical Integration

• Backward integration: retailers performing wholesaling/manufacturing activities (warehousing, private-label merchandise). Ex. Bench, F&H, Celine
• Forward integration: manufacturers undertaking retailing/wholesaling activities (operating retail stores). Ex. Apple, Puregold, SM, S&R

Differences in Distribution Channels Around the World

Economic and Social Significance of Retailing

• Consumer spending is vital in developed economies; increased spending boosts the economy.

Role in Developing Economies

• Low-income consumers (base of the pyramid, BoP) possess significant spending power.
• BoP market growth in emerging economies drives firms to enter the BoP market.
• Conscious retailing entails a purpose beyond profit, emphasizing ethical products/services.

Principles of Conscious Retailing

• Recognizing the retailer's greater purpose
• Considering stakeholders and their interdependence
• Conscious leadership, fostering a conscious corporate culture
• Ethically based decisions
• Commitment to social issues

Checklist for Ethical Decisions

• Consider embarrassment, supervisor disapproval, coworker opinions, potential consequences, and societal impact.

Evolution of the Retail Industry

• A large percentage of retail sales still occur in physical stores, and the retail business has undergone significant changes in the last half-century.
• Large national and international retail chains now dominate the retail landscape.

Management and Entrepreneurial Opportunities

• Retailers need individuals with expertise in finance, accounting, HR, supply chain management, computer systems, and management marketing.
• Provides opportunities for starting a business; some of the world's wealthiest individuals are involved in retail.

Examples of Retailing Entrepreneurs in the Philippines

• Sy Siblings- SM Malls
• Socorro Ramos- National Bookstore
• Tony Tan Caktiong- Jollibee Foods Corporation
• Lucio Co- Puregold

Misconceptions About Careers in Retailing

• College not needed
• Low pay
• Long hours
• Boring
• Dead-end jobs
• No benefits
• Everyone is part-time
• Unstable environment
• No opportunity for women and minorities

The Decision-Making Process in Retail Management

• Strategic retail management decision process.
• Overview of Retailing Strategies in Retailing
• Merchandise management and Human Resource & Store Management
• Recognize the Retail Environment Macroenvironment (Technological, Social, Ethical, legal, & political) Microenvironment (Competitors, Customers)

Retail Strategy

• Target market(s) for retailer's focus.
• Merchandise/service nature to meet target market needs.
• Development of unique assets for long-term competitive advantage.

Retail Strategy - Strategic Decision

• Defining the target market.
• Analyzing the environment.
• Defining financial objectives.
• Development of critical assets.

Implementing the Retail Strategy

Elements of Retail Mix

• Types of merchandise
• Services offered
• Merchandise pricing
• Advertising and promotional programs
• Store designs
• Merchandise displays

Overview of Retail Management: Introduction to the World of Retailing

Conscious Retailing

• Business approach prioritizing sustainability, ethical sourcing, and social responsibility.
• Entails a sense of purpose beyond profit.
• Encompasses five overriding principles.

Recognition of the Retailer's Greater Purpose

• Addresses societal challenges.

Retail Analytic

• Collecting and analyzing data for insights on customer behavior, sales, and efficiency.

Types of Retail Competition

• Intratype competition involves same retailer types that have the same products AND establishments (direct competitors).
• Intertype competition involves different retail outlets with the SAME product but using DIFFERENT establishments (indirect competitor).
• Scrambled merchandising has retailers offering merchandise not typically associated with their store type.

Retail Strategy

• Defines a retailer's target market, offerings, and competitive advantage for sustained customer purchases.
• Retail Strategy = Target Market + Offerings + Competitive Advantage = Customer Buys.

The Retail Mix

• A set of decisions retailers make to satisfy customer needs and influence their purchases.

Areas of Retail Mix

• Customer Service
• Store Design and Display
• Communication Mix
• Location
• Merchandise Management
• Pricing

Retailer

• A company/individual buying wholesale/manufacturer goods and selling them to customers for personal use.
• Examples: Grocery stores, clothing shops, online stores
• Characteristics of Retailers
• Direct interaction with consumers.
• Variety of products.
• Pricing and promotion.
• Convenience.
• Small quantity sales.
• Fixed location or online presence.

Four Basic Characteristics

• Product
• Price
• Place
• Promotion

Food Retailers

• Can be categorized into several types based on their size, product range, and business models.
• Supermarkets & hypermarkets
• Convenience stores
• Specialty Food Stores

Various Types of General Merchandise Retailers

• Department Stores
• Full-Line Discount Stores
• Category Specialist
• Specialty Stores
• Drugstores
• Off-price Retailers
• Extreme- Value Retailers
• Outlet Stores

Differences Between Merchandise Retailers and Service Providers

• Merchandise retailers primarily sell products, while service providers primarily sell services.
• Intangibility (Merchandise vs Services)
• Simultaneous RODUCTION and CONSUMPTION-
• Perishability
• Inconsistency

Types of Ownership for Retail Firms

• Independent, Single-Store Establishments
• Corporate Retail Chain
• Franchising

Strategic Retail Planning Process

• Define the Business Mission - Clearly state the retailer's objectives and scope.
• Conduct a SWOT Analysis
• Identify internal strengths and weaknesses, and external opportunities and threats.

Identifying Strategic Opportunities

• Assess the identified opportunities based on market attractiveness and competitive position.

7 Critical Elements of Digital Retailing

• Core Goals
• Contextual Elements (Design & Navigation)
• Communication
• Content
• Community
• Commerce
• Connection

How Mobile and Social Retailing Work

Social Retailing

• Facebook
• Pinterest
• Instagram
• YouTube
• Twitter
• Tik Tok

Differences Among Paid, Owned, and Earned Media

• Paid Media- you pay for exposure Social Media Ads Search Engine Marketing Pay-per-click
• Owned Media- you control the content
• Earned Media- others talk about you

How They Work Together

• Paid Media- – The business pays for ads to drive people to their Owned Media (website or social media pages).
• Owned Media – When people like their content or service, they may share or review it, turning it into Earned Media.
• Earned Media – Due to positive feedback and shares, more people become aware of the business, potentially turning into customers.

Assessing the Efficacy of Influencers

• Relevance- the notion of relevance encompasses both the focal influencer and her or his followers (i.e., targeted audience) and how they link with the brand and its message.
• Reach- general concept of reach refers to the percentage of a target population exposed to a specific marketing communication at least once.
• Response- general concept of reach refers to the percentage of a target population exposed to a specific marketing communication at least once
• Return- refers to the revenue earned from some action minus the cost of that action divided by the cost.

Ethical Considerations for Influence Marketing

How Retailers Engage Their Customers

Single-Channel Retailing

• Retailers sell/deliver merchandise/services through only one channel.

Multichannel Retailing

• Retailers offer more than one channel to sell/deliver merchandise/services.

Cross-Channel Retailing

• Customers use multiple channels to make purchases.

Omnichannel Retailing

• A coordinated multichannel retail offering for a seamless/synchronized customer experience across all channels.

Relative Strengths of Retail Channels

• In-Store
• Internet
• Mobile
• Social Media
• Catalog and other Nonstore Channels
• Challenges Facing MultiChannel and OmniChannel

Consumer Behavior: Decision-Making Process When Choosing Where to Shop and What to Buy

• Problem Recognition
• Information Search
• Evaluation of Alternatives
• Purchase Decision
• Post-purchase decision

Four Main Types of Buying Process

• Variety-seeking Buying Behavior
• Complex Buying Behavior
• Dissonance-Reducing Buying Behavior
• Habitual Buying Behavior

Economic Factors That Affect Consumer Purchase Behavior

• Income and employment
• Inflation and Prices
• Interest rates and credit availability
• Economic stability

Social Factors That Affect Consumer Purchase Behavior

• Income and employment
• Peer influence and trends Retailers group consumers into market segments to better understand customer needs and target them with relevant products, services, and marketing strategies.

How Retailers Group Consumers Into Market Segments

• Demographic Segmentation
• Geographic Segmentation
• Psychographic Segmentation
• Behavioral Segmentation
• Occasion-based Segmentation

Efficient Internal Operations

• enable retailers to gain a cost advantage over competitors or offer customers more benefits than competitors at the same cost.
• Main Growth Opportunities
• Market Penetration- squeezing more sales out of your existing customer base.
• Market Expansion- involves using the existing retail format in new market segments.
• Format Development- creating new retail formats tailored to specific customer needs.
• Diversification- retailers introduces a new retail format targeting a market segment not currently served.
• Market Attractiveness Factors
• Market Size: How big is the overall retail market?
• Modern Retail: How many large stores and online shopping
• Sales & Profit Risks: What are the chances that sales and profits will be lower than expected?
• Keys to Success in Global Retailing

Globally Sustainable Competitive Advantage

· This refers to possessing a unique product or way of doing business that makes you better than your competitors, even in other countries.

Adaptability

· Successful global retailers recognize and adapt to cultural differences in their core strategies. Changing how you do things to match the culture of each country. This means different store designs, sale times, and even how you treat customers.

Adjustments

• Monitor the implementation's success against the objectives and make necessary adjustments.

Financial Planning, Objectives, and the Components of Strategic Profit Model

• Financial Objectives
• Societal Objectives
• Personal Objectives

Two Paths to Financial Performance

• Profit Management Path focuses on increasing profitability by controlling costs and expenses. This path aims to generate more profit from each unit sold.

Asset Turnover Management Profit

• refers to how efficiently a company uses its assets (like inventory, stores, and equipment) to generate sales. This path focuses on optimizing the use of assets to drive more revenue with fewer resources.

Evaluating Growth Opportunities

• Market Analysis
• Competitive Landscape
• Internal Capabilities
• Customer Demand Analysis
• Top - Down Versus Bottom - Up Process

Definitions and Types of Retail Locations

• Unplanned Locations - do not have any centralized management that determines what stores will be in a development, where the specific stores will be located, or how they will be operated.
• Planned Locations - a shopping center developer and/or manager makes and enforces policies that govern store operations, such as the hours that a store must be open.

Three Types of Unplanned Retail Locations

• Freestanding Sites
• Urban Locations
• Main Street Locations Shoping Centers and Planned Retail Locations

Societal and Legal Considerations in Selecting Locations

· ZONING- Local governments in the United States use zoning to regulate land uses in specific areas to prevent any interference with existing uses by residents or businesses, as well as encourage the preservation of a community's sense of identity.

Zoning

• Local governments regulate land use to prevent interference and preserve community identity.