Introduction To Retailing 1

An Introduction to Retailing
RETAIL MANAGEMENT: A STRATEGIC APPROACH

11th Edition BERMAN EVANS
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
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Chapter Objectives
To define retailing, consider it from different
perspectives, demonstrate its impact, and note its special characteristics To introduce the concept of strategic planning and apply it To show why the retailing concept is the foundation of a successful business, with an emphasis on the total retail experience, customer service, and relationship retailing To indicate the focus and format of the text
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Retailing
Retailing encompasses the business activities involved in selling goods and services to consumers for their personal, family, or household use. It includes every sale to the final consumer.
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Issues in Retailing
How can we best serve our customers while earning a
fair profit? How can we stand out in a highly competitive environment where consumers have so many choices? How can we grow our business while retaining a core of loyal customers?
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The Philosophy
Retailers can best address these questions by fully understanding and applying the basic principles of retailing, as well as the elements in a well-structured, systematic, and focused retail strategy.
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Figure 1-1: Boom Times for Dunkin Donuts
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Figure 1-2: Careers in Retailing
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An Ideal Candidate for a Retailing Career

Must be a people person Must be flexible Should be decisive
Must have analytical skills

Must have stamina
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Table 1-1: The 10 Largest Retailers in the United States

Rank Company Main Emphasis
1 2 3 4 5 6 7 8 9
Wal-Mart Home Depot CVS Caremark Kroger Costco Target Walgreens Lowes
Full-line discount stores, supercenters, membership clubs Home centers, design centers Drugstores Supermarkets, convenience stores, jewelry stores Membership clubs Full-line discount stores, supercenters Drugstores
Sears Holdings Department stores, specialty stores Home centers
10
Safeway
Supermarkets
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Figure 1-4: A Typical Channel of Distribution
Manufacturer Retailer
Wholesaler
Final Consumer
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Figure 1-5: The Retailers Role in the Sorting Process
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Multi-Channel Retailing
retailer sells to consumers through A
multiple retail formats: Web sites Physical stores
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Figure 1-6: Brooks Brothers and Multi-Channel Retailing
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Relationship Management Among Retailers and Suppliers

Disagreements may occur in the following areas: control over channel profit allocation number of competing retailers product displays promotional support payment terms operating flexibility
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Distribution Types
Exclusive: suppliers make agreements with one or few
retailers, designating such retailers as the only ones to carry certain brands or products within a specified geographic area Intensive: suppliers sell through as many retailers as possible Selective: suppliers sell through a moderate number of retailers
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Figure 1-7: Comparing Distribution Types
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Figure 1-8: Special Characteristics Affecting Retailers

Small Average Sale Retailers Strategy Impulse Purchase
Popularity of Stores
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Retail Strategy
An overall plan for guiding a retail firm Influences the firms business activities
Influences firms response to market forces
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Six Steps in Strategic Planning

1. Define the type of business 2. Set long-run and short-run objectives 3. Determine the customer market 4. Devise an overall, long-run plan 5. Implement an integrated strategy 6. Evaluate and correct
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Figure 1-9: Expect More. Pay Less at Target
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Aspects of Targets Strategy

Growth objectives Appeal to a prime
market Distinctive image Focus Customer service Multiple points of contact
Employee relations Innovation Commitment to
technology Community involvement Monitoring performance
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Figure 1-10: Applying the Retailing Concept

Customer Orientation
Coordinated Effort
Value-driven Goal Orientation
Retailing Concept
Retail Strategy
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Figure 1-11: The Build-A-Bear Experience: Never Boring
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Customer Service
Activities undertaken by a retailer in conjunction
with the basic goods and services it sells. This includes:
Store hours
Parking Shopper-friendliness Credit acceptance Salespeople
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Figure 1-12: A Customer Respect Checklist

Do we trust our customers? Do we stand behind what we sell? Is keeping commitments to customers important to our company? Do we value customer time? Do we communicate with customers respectfully? Do we treat all customers with respect? Do we thank customers for their business? Do we respect employees?
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Relationship Retailing
Retailers seek to establish and maintain long-
term bonds with customers, rather than act as if each sales transaction is a completely new encounter
Concentrate on the total retail experience Monitor satisfaction Stay in touch with customers
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Effective Relationship Retailing

Use a win-win approach It is easier to keep existing customers happy than to gain new ones Develop a customer database Ongoing customer contact is improved with information on peoples attributes and shopping behaviors
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Approaches to the Study of Retailing
Institutional Functional
Strategic
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Parts of Retail Management: A Strategic Approach

Building relationships and strategic planning Retailing institutions Consumer behavior and information gathering Elements of retailing strategy Integrating, analyzing, and improving retail strategy
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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An Introduction to Retailing

RETAIL MANAGEMENT: A STRATEGIC APPROACH

Figure 1-1: Boom Times for Dunkin Donuts

Figure 1-2: Careers in Retailing

An Ideal Candidate for a Retailing Career

Must have analytical skills

Table 1-1: The 10 Largest Retailers in the United States

Sears Holdings Department stores, specialty stores Home centers

Figure 1-4: A Typical Channel of Distribution

Figure 1-5: The Retailers Role in the Sorting Process

multiple retail formats: Web sites Physical stores

Figure 1-6: Brooks Brothers and Multi-Channel Retailing

Relationship Management Among Retailers and Suppliers

Figure 1-7: Comparing Distribution Types

Figure 1-8: Special Characteristics Affecting Retailers

Influences firms response to market forces

Six Steps in Strategic Planning

Figure 1-9: Expect More. Pay Less at Target

Aspects of Targets Strategy

market Distinctive image Focus Customer service Multiple points of contact

Employee relations Innovation Commitment to

technology Community involvement Monitoring performance

Figure 1-10: Applying the Retailing Concept

Figure 1-11: The Build-A-Bear Experience: Never Boring

Figure 1-12: A Customer Respect Checklist

Effective Relationship Retailing

Approaches to the Study of Retailing

Parts of Retail Management: A Strategic Approach

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