Trends in Retailing and Service Strategies

Questions and Answers

What are some general trends in retailing?

Increase of use of technology (correct)

Globalization (correct)

Decrease in service retailing

Growth in omnichannel retailers (correct)

What is service retailing?

Investing more in experiences rather than products, primarily selling services.

What is omnichannel retailing?

A multichannel approach that provides a seamless shopping experience.

What are some retailer merchandise characteristics?

Variety, assortment, and stock keeping unit (SKU). Signup and view all the answers

What is variety (breadth) in retailing?

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

What is assortment (depth) in retailing?

The number of different items/styles offered in a merchandise category. Signup and view all the answers

What is a stock keeping unit (SKU)?

Each different item of merchandise with a unique identifier. Signup and view all the answers

What is a retailer mix?

The combination of merchandise, services, store design, location, pricing, and communication mix. Signup and view all the answers

What are the two types of merchandise retailers?

General merchandise retailers Signup and view all the answers

What are the characteristics of supermarkets?

Perishables account for 30% of sales, average 30,000 SKUs for conventional supermarkets. Signup and view all the answers

What are some trends in supermarket retailing?

Competition from supercenters, warehouse clubs, convenience stores, and extreme price retailers. Signup and view all the answers

What are the characteristics of a supercenter?

Large stores combining a supermarket with a full-line discount store. Signup and view all the answers

What are the characteristics of warehouse clubs?

Limited assortment, low prices, selling to individuals and small businesses. Signup and view all the answers

What are the characteristics of a convenience store?

Tailored assortments, healthy food options, and quick access. Signup and view all the answers

What are some characteristics of department store retailing?

Broad variety, deep assortment, and average to high customer service. Signup and view all the answers

What are soft goods?

Non-durable consumer goods such as cosmetics and clothing. Signup and view all the answers

What are hard goods?

Durable goods such as appliances, furniture, and consumer electronics. Signup and view all the answers

What are some issues department store retailing is facing?

Competition from discount stores, specialty stores, and fast-fashion stores. Signup and view all the answers

What is a fast-fashion retailer?

A retailer that designs and distributes fashion quickly to capture trends. Signup and view all the answers

Study Notes

General Trends in Retailing

Emergence of new retail types, like Nordstrom, enhancing competition.
Globalization example: Levi’s expanding reach.
Significant growth in services retailing, focusing on experiences over products.
Rise of omnichannel retailers, integrating online and offline shopping.
Increased technology usage for cost reduction, exemplified by Kohl's kiosks.

Service Retailing

Focus primarily on selling services rather than physical products.
Examples include travel agencies, hair salons, hotels, fitness centers, and healthcare providers.
Emphasis on creating memorable customer experiences.

Omnichannel Retailing

A multichannel sales strategy aiming for a seamless customer shopping experience.
Customers can transition between online platforms and physical stores effortlessly.

Retailer Merchandise Characteristics

Variety refers to the breadth of different merchandise categories available.
Assortment denotes the depth of items/styles within a specific category.
Stock Keeping Unit (SKU) is a unique identifier for each individual item of merchandise.

Variety (Breadth)

Represents the number of different merchandise categories offered by a retailer.
Can be categorized as broad (e.g., men’s and women’s products) or shallow.

Assortment (Depth)

Indicates the diversity of products within a particular merchandise category.
Can vary from shallow (limited styles) to deep (extensive selection, e.g., types of shoes).

Stock Keeping Unit (SKU)

Each SKU is a distinct unit of merchandise, often identified by a unique code.

Retailer Mix

Retailers combine various elements in their retail mix:
- Merchandise variety and assortment.
- Service offerings and store design.
- Pricing strategies and promotional communication.
Example: BJ's uses location, pricing, and merchandise as part of its retailing strategy.

Types of Merchandise Retailers

Food Retailers include supermarkets, supercenters, warehouse clubs, and convenience stores.
General Merchandise Retailers comprise department stores, specialty stores, drugstores, and off-price retailers.

Supermarkets Characteristics

Conventional supermarkets rely heavily on perishables, constituting 30% of sales with up to 30,000 SKUs.
Limited assortment supermarkets offer fewer SKUs (1500-2000) with lower prices by maximizing efficiency, such as Aldi.

Trends in Supermarket Retailing

Facing competition from supercenters, warehouse clubs, convenience stores, and extreme price retailers.
Changing consumption patterns influenced by lifestyle shifts, with increased eating out and meal solution services.

Characteristics of Supercenters

Large retail spaces (185,000 sq ft) combining supermarkets with discount stores for one-stop shopping.
High incidence of impulse purchases, with well-known examples including Walmart and Super Target.

Warehouse Clubs Characteristics

Limited assortment of food and general merchandise at low prices, catering to individuals and small businesses.
Operates in low-cost locations with minimal service and simple store designs.

Convenience Store Characteristics

Local market tailored assortments for enhanced shopping convenience.
Emphasis on fresh and healthy food options, quick service, and accessibility.

Department Store Retailing Characteristics

Offers a broad variety of products with deep assortments, and above-average customer service.
Merchandise organized into distinct departments for easier navigation.

Soft Goods

Refers to non-durable consumer goods like clothing and cosmetics.

Hard Goods

Refers to durable consumer products including appliances, furniture, and electronics.

Issues Facing Department Store Retailing

Intense competition from discount and specialty stores, which outperform in price and service.
Fast-fashion retailers compel traditional stores to adapt quickly to trends.
Customers often delay purchases for sales, affecting sales consistency.

Fast-Fashion Retailers

Characterized by rapid design turnover, capturing trends quickly to appeal to consumers.
Notable brands include H&M, Zara, and Forever21, which prioritize style at competitive prices.

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Description

Explore the latest trends in retailing, including the emergence of new retail types, the rise of omnichannel strategies, and the focus on service retailing. Learn how globalization and technology are shaping the retail landscape and emphasizing customer experiences over products. This quiz covers key concepts and examples to enhance your understanding of modern retailing dynamics.