Group1_Topic1_TypesOfRetailers.pdf

TYPES OF RETAILERS Retail Management Presentation OVERVIEW Retailer Characteristics Food Retailers General Merchandise Retailers Service Retailing Types of Ownership 1  RETAILER CHARACTERISTICS  TYPES OF MERCHANDISE NAICS (North American...

TYPES OF RETAILERS Retail Management Presentation OVERVIEW Retailer Characteristics Food Retailers General Merchandise Retailers Service Retailing Types of Ownership 1  RETAILER CHARACTERISTICS  TYPES OF MERCHANDISE NAICS (North American Industry Classification System) A classification system developed by the United States, Canada, and Mexico to collect data on business activities. Assigned a hierarchical six-digit code based on the products and services they sell. First 2 digits identify the business sector Remaining Four Digits provide finer classification for subsectors Sixth Digit differentiates between countries  VARIETY AND ASSORTMENT Variety (Breadth) Refers to the number of different merchandise categories a retailer offers. Assortment (Depth) Refers to the number of different items within a specific merchandise category. Stock-Keeping Unit (SKU) Refers to each unique item of merchandise, such as a specific size or color of a product, is called an SKU.  SERVICES OFFERED Basic Customer Services Most retailers provide certain essential services, including: Displaying merchandise. Accepting credit cards. Providing parking. Being open during convenient hours. Paid Services Some retailers charge for additional services like: Home delivery. Gift wrapping. Service Differences Between Retailers Wheelworks (bicycle specialty store) provides personalized services such as assistance in selecting a bicycle and repair services. Walmart does not offer these specialized services.  PRICES AND COST OF OFFERING BREADTH AND DEPTH OF MERCHANDISE AND SERVICES Deep and Broad Assortments Stocking many SKUs is appealing to customers but costly for retailers, as it requires more inventory investment and backup stock for each SKU. Cost of Services Providing additional services increases costs for retailers due to the need for more staff, space for facilities, and financial services like delayed billing or credit options. Impact on Pricing To cover the higher costs of offering broader variety, deeper assortments, and more services, retailers must charge higher prices. 2  PRICES AND COST OF OFFERING BREADTH AND DEPTH OF MERCHANDISE AND SERVICES Department Stores vs. Discount Stores Department Stores have higher prices due to higher costs from fashionable merchandise, personal sales service, and more expensive locations. Fashion Risks - Department stores risk having to reduce prices when they incorrectly predict fashion trends. Discount Stores have lower prices, appealing to customers who are less interested in costly services and more focused on finding deals.  FOOD RETAILERS  SUPERMARKETS Conventional Supermarkets Large, self-service stores offering a wide range of groceries, meat, produce, and some non-food items, with around 30,000 products available. Perishables make up a significant portion of sales. Limited-Assortment Supermarkets Smaller stores focusing on efficiency with about 1,500 products, offering lower prices through cost-cutting measures and a limited selection of brands. Cost-Cutting Measures and Customer Appeal Attract price-conscious shoppers who are willing to try store brands for savings Reduce costs through methods like shipping merchandise in crates that serve as displays Choosing lower-rent locations. Offer lower prices by focusing on efficiency and a limited selection of products  SUPERMARKETS Trends in Supermarkets Supermarkets face tough competition from other food retailers. To stay competitive, they focus on fresh produce, attract eco-conscious and diverse customers, offer store brands, and enhance the shopping experience with new services and features. Improving Shopping Experience Supermarkets are improving the shopping experience with features like in-store restaurants, cooking classes, and self-service kiosks. These additions make shopping more enjoyable and convenient for customers.  SUPERMARKETS Types of Merchandise found in Supermarkets Fresh Merchandise includes items like dairy, bakery products, meat, and produce. Green Merchandise includes ethical, organic, and local products. Ethnic Merchandise products that cater to specific cultural tastes, such as Latin American grocery items and fresh tortillas. Private - Label Merchandise consists of store-brand products that offer customers more choices and often match or exceed the quality of national brands at lower prices.  SUPERCENTERS Supercenters blend supermarkets and discount stores, offering a range of food and goods at low prices. Examples: Walmart Supercenter and SuperTarget.  WAREHOUSE CLUBS Warehouse clubs like Costco and Sam's Club offer bulk items at low prices with minimal service and simple store layouts. Customers pay an annual membership fee. 3  CONVENIENCE STORES Convenience stores are small retail outlets offering a limited range of high-turnover items like snacks and beverages, focusing on accessible locations and extended hours. They generally have higher prices due to convenience. Examples: 7/11, I-mart 3 ONLINE GROCERY RETAILERS Online grocery retailers are digital platforms that sell groceries with home delivery and convenience. They offer a wide range of products, including fresh items, and use technology to manage logistics and enhance shopping experience. Examples: Amazon Fresh, Kroger, Walmart 3  GENERAL MERCHANDISE RETAILERS  DEPARTMENT STORE Department stores offer a wide range of products in one place, but face competition from online retailers. To stay relevant, they’re improving store experiences and boosting their digital presence. Examples: JCPenney, Macy’s 3 Full-Line Discount Stores These are retailers that offer a wide variety of merchandise at lower prices, including both private labels and national brands. They typically carry general merchandise like apparel, home goods, electronics, and toys. Example: SM Supermarket, Puregold 3  Category Specialists Also called "category killers," these stores focus on one product category but offer an extensive assortment of items within that category, often dominating the market for that product. Example: Ace Hardware (home improvement), Abenson (electronics) 3  Specialty Stores These retailers concentrate on a narrow product category, offering a deep assortment within that niche. Their focus is on offering specialized products and customer service. Example: Penshoppe (fashion), Power Mac Center (Apple products) 3  Drugstores These retailers focus primarily on health and wellness products, including over-the- counter medication, prescriptions, and personal care items. They often carry convenience items as well. Example: Mercury Drug, Watsons 3  Extreme-Value Retailers These stores offer a limited assortment of low- priced goods, often targeting price-sensitive consumers. The products range from food to general merchandise, with a focus on affordability. Example: Japan Home Centre, Daiso 3 OFF-PRICE RETAILERS Offer an inconsistent assortment of brand-name merchandise at a significant discount off the manufacturer's suggested retail price (MSRP). 3  SERVICE RETAILING DIFFERENCE BETWEEN SERVICE AND MERCHANDISE RETAILERS Four important differences in the nature of the offerings provided by service and merchandise retailers are: a. Intangibility b. Simultaneous production and consumption, c. Perishability d. Inconsistency of the offering to customers 3  TYPES OF OWNERSHIP  INDEPENDENT, SINGLE STORE ESTABLISHMENT Many retail start-ups are owner- managed, which means management has direct contact with customers and can respond quickly to their needs. 3  CORPORATE CHAINS Is a company that operates multiple retail units under common ownership and usually has centralized decision making for defining and implementing its strategy. Retail chains can range in size from a drugstore with two stores to retailers with thousands of stores such as Walmart, Best Buy, and Macy's. 3  FRANCHISING Is a contractual agreement in which the franchisor (the company) sells the rights to use its business trademark, service mark, or trade name, or another commercial symbol of the company, to the franchisee for a one-time franchise fee and an ongoing royalty fee, typically expressed as a percentage of gross monthly sales. 3 THANK YOU Presented By : GROUP 1