Retail Management Introduction to Retailing PDF

RETAIL MANAGEMENT INTRODUCTION TO RETAILING 1.1. Part 1: Introduction and Desired Learning Outcomes - Introduction t...

RETAIL MANAGEMENT INTRODUCTION TO RETAILING 1.1. Part 1: Introduction and Desired Learning Outcomes - Introduction to Retailing electronic commerce and began to add such capabilities to their web sites. By the end of 2001, the largest form of e-commerce, Business-to-Business (B2B) model, had around $700 billion in MODULE INTRODUCTION transactions. Services dominate almost all types of economies today. The service sector accounts for a majority of the gross domestic product in all industrialized countries and provides most of the new jobs in many Yet, in 2020, major change affected our way of life because of Covid 19. Changes happened even developing and highly developed nations worldwide. beyond our imagination, and the retail industry isn't spared from the its impact. Customer needs are evolving, markets and competition are changing rapidly, and effective strategic Watch this video on how COVID 19 affected the Retail Industry for class discussion. leadership is vital to success. Understanding the threats and opportunities posed by these challenges is a vital first step in developing effective strategies, especially in the service industry. https://www.youtube.com/watch?v=zPyOnZpeFnQ This module also establishes a theme that runs throughout the book: the need for service firms to be RETAILING customer focused, to understand customer concerns and expectations, and to recognize the Consists of the final activities and steps needed to place merchandise made elsewhere into customer’s often dynamic role in service operations. the hands of the consumer or to provide services to the consumer. Any firm that sells a product or provides a service to the final consumer is said to be COURSE OUTCOME TARGETED BY THE MODULE performing the retailing function. CO #3 Incorporate new happenings in the industry and in the environment to determine product value contributions CHANGES IN RETAILING Government - certain restrictions protection of both buyers and sellers LEARNING OBJECTIVES = pandemic - many became entrepreneurs thanks to technology 1. Explain what retailing is and why it is undergoing so much change today. Political Conflict - imports and exports location online shopping - 2. Recognize career in retail career and identified the prerequisite necessary for success in retailing. 3. Describe the different methods for the study and practice of retailing. 1.3.1. Lesson: Introduction to Retailing The move of people from urban to suburban settings brought on the advent of the shopping center. There, stores of many types were conveniently and centrally located within communities. They may be referred to as strip shopping centers because that is what they were, a swath of stores. As the size of the shopping centers increased, the desire for easy access, all season long, “under one roof”, became the trend. Shopping malls were born. The last new frontier in retailing has to do with the use of technology. E-commerce is the process of purchasing available goods and services over the Internet using secure connections and electronic the supply : Managing chain payment services. Although the dot-com collapse in 2000 led to unfortunate results and many of The set of institutions that goods from the point of production to the point of consumption Supply Chain move - e-commerce companies disappeared, the "brick and mortar" retailers recognized the advantages of Channel - used interchangeably with supply chain chain is affected by 5 external forces → in the end it is the consumer supply : consumer behavior technological environment competitor behavior legal & ethical environment socioeconomic environment A supply chain on channel must Institutions Participating in the Supply Chain functions : perform eight marketing Primary ( Take Title ) Facilitating ( Do not take title ) buying - sorting - Manufacturers - Agents / Brokers - selling - financing - wholesalers - Transporters storing information gathering Retailers Financial Institutions RETAIL MANAGEMENT - - - - risk taking Advertising Agencies - transporting - - - - Market Researchers Warehouses Insurers INTRODUCTION TO RETAILING EXHIBIT 1.1 - EXTERNAL ENVIRONMENTAL FORCES CONFRONTING RETAIL FIRMS 1. Census Bureau The U.S. Bureau of the Census, for purposes of conducting the Census of Retail Trade, classifies all retailers using three-digit North American Industry Classification System (NAICS) codes. NAICS Code Example: ○ 51 – Information ○ 513 – Broadcasting and telecommunications ○ 5133 – Telecommunications CATEGORIZING RETAILERS ○ 51332 – Wireless telecommunication carriers Census Bureau ○ 513322 – Cell phone services Number of Outlets Identify competitors and customers Margin vs. Turnover Find industry reports, ratios and data Location Benchmark finances Size Analyze economic development and labor trends 2. Number of Outlets Standard Stock List Optional Stock List Channel Captain Private Label Branding ○ Store Branding ○ Designer Lines  RETAIL MANAGEMENT INTRODUCTION TO RETAILING High-margin/low turnover retailer - Operates on a high gross margin percentage and a low Retailers with several units are a stronger competitive threat because they can: rate of inventory turnover. ○ Spread many fixed costs over a larger number of stores. Clicks & mortar retailers - Sell both online and via physical stores. ○ Achieve economies in purchasing. High-margin/high turnover retailer - Operates on a high gross margin percentage and a Advantages of single-unit retailers: high rate of inventory turnover. ○ They have harder-working, more motivated employees. ○ They can focus and tailor their efforts and merchandise in one trade area. Standard stock list - Merchandising method in which all stores in a retail chain stock the same merchandise. Optional stock list - Merchandising method in which each store in a retail chain is given flexibility to adjust its merchandise mix to local tastes and demands. Channel advisor or Channel captain - Institution in the marketing channel who is able to plan for and get other channel institutions to engage in activities they might not otherwise engage in. ○ Examples could be manufacturer, wholesaler, broker, or retailer. ○ Large store retailers are often able to perform the role of channel captain. Private label branding - Occurs when a retailer develops its own brand name and contracts with a manufacturer to produce the merchandise with the retailer’s brand on it instead of the manufacturer’s name. 4. Location ○ Also called store branding. Retailers are now aware that opportunities exist in new non- traditional retail areas. The major shortcoming of using the number of outlets scheme for classifying retailers is that it Retailers are reaching out for alternative retail sites, rather than simply renovating the existing addresses only traditional bricks & mortar retailers. stores. Today, the most significant of the new nontraditional shopping locations could be the one 3. Margins Versus Turnover which combines culture with entertainment or shopping. Gross margin percentage - Gross margin divided by net sales or what percent of each sales dollar is gross margin. Gross margin - Net sales minus the cost of goods sold. Operating expenses - Expenses the retailer incurs in running the business other than the cost of the merchandise. Inventory turnover - The number of times per year, on average, that a retailer sells its inventory. High-performance retailers - Produce financial results substantially superior to the industry average. Low-margin/low turnover retailer - Operates on a low gross margin percentage and a low rate of inventory turnover. Low-margin/high turnover retailer - Operates on a low gross margin percentage and a high rate of inventory turnover.  RETAIL MANAGEMENT INTRODUCTION TO RETAILING 5. Size The reason for classifying by size is that the operating performance of retailers tends to vary according to size. With advances in technology, using classification of size is unclear.