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TYPES OF RETAILERS
CHAPTER 02
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General Trends in Retailing• New types of retailers• Globalization• Growth in services
retailing• Growth in
omnishopping by traditional retailers
• Increase use of technology to reduce cost; Increase value delivered
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NAICS Codes for Retailers
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• Retailers Use Different Retail Mixes-merchandise: variety (breadth) / assortment (depth)-services-store design, visual merchandising-location-pricing
Types of Retailers
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Merchandise Offering
Variety (breadth of merchandise): wide vs. narrow- The number of merchandise categories
Assortment (depth of merchandise): deep vs. shallow-the number of items in a category (SKUs)
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Services Offered• Retailers differ in
the services they offer customers– Wheelworks offers
assistance in selecting the appropriate bicycle as well as bicycle repairs.
– Wal-Mart, however, doesn’t provide any additional services.
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Prices and the cost of offering breath and depth of merchandise and services
• Stocking a deep and broad assortment (like Wheelworks) is costly for retailers.
Many SKUs
Inventory Investment Cost
Because the retailer must have backup stock for each SKU in addition to holding the inventory
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Illustration of Variety and Assortment
Lady Foot Locker Sports AuthorityActive SKUs: 44 N/A
Classics SKUs: 44 N/A
Converse SKUs: 25 N/A
Elite Running SKUs: 22 N/A
Fitness N/A SKUs: 1
Running SKUs: 44 SKUs: 39
Trail Running N/A SKUs: 7
Training SKUs: 22 SKUs: 2
Walking SKUs: 11 SKUs: 12
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Food Retailers• Channel preference for food shopping
channel where grocery purchasers do most of their food shopping– Supermarkets– Supercenters– Warehouse Clubs– Convenience
Stores
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Trends in Supermarket Retailing• Competition
• Supercenters• Warehouse Clubs• Convenience Stores• Extreme Price Retailers• Convenience Stores• Drug Stores
•Changing Consumption Patterns
Time Pressure Eating Out More Meal Solutions
Distribution
Costs
Prices
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Characteristics of Food Retailers
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Characteristics of General Merchandise Retailers
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Characteristics of General Merchandise Retailers
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Issues in Department Store Retailing
• Competition– Discount stores on price– Specialty stores on service, depth of
assortment
• Lower cost by reducing service– Centralized cash wraps
• More sales – Customers wait for sale
• Focus on apparel and soft home• Develop private labels and exclusive
brands
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Three Tiers of Department Stores
• First Tier: Upscale, high fashion chains with exclusive designer merchandise and excellent customer service– Nordstrom, Neiman Marcus, Saks
• Second Tier: Retailers sell more modestly priced merchandise with less customer service– Macy’s
• Third Tier: Value oriented caters to more price conscious customer– JCPenney, Sears, Kohl’s
Rob Melnychuk/Getty Images
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Specialty Store Retailers
McGraw-Hill Companies, Inc./Andrew Resek, Photographer
What challenges do specialty store retailers face?