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Chapter 11 An Introduction to Retailing

RETAIL

MANAGEMENT:

A STRATEGIC

APPROACH, 9th Edition

ERMAN

ERMAN

EVANS

EVANS

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Chapter Objectives

To define retailing, consider it from differentperspectives, demonstrate its impact, and noteits special characteristics

To introduce the concept of strategic planningand apply it

To show why the retailing concept is thefoundation of a successful business, with anemphasis on the total retail experience,customer service, and relationship retailing

To indicate the focus and format of the text

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!etailing

Retailing encompasses the business

activities involved in selling goods andservices to consumers for their

personal, family, or household use. It

includes every sale to the finalconsumer.

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#ssues in !etailing

How can we best serve our customers while

earning a fair profit?

How can we stand out in a highlycompetitive environment where consumers

have too many choices?

How can we grow our business, while

retaining a core of loyal customers?

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The %hilosophy

Retailers can best address these

questions by fully understanding and

applying the basic principles ofretailing, as well as the elements in a

well-structured, systematic, and

focused retail strategy.

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'igure 1(1 )oom Times for

Costco

http://www.costco.com/

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'igure 1(2 Career %athways

to +uccess

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Career %athways to +uccess

http://www.nrf.com/content/default.asp?folder=home&file=main.htm&bhcp=1

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.n #deal Candidate for

!etailing Career )e a people person

)e flexible

)e decisive/ave analytical s0ills

/ave stamina

http://www.prenhall.com/bermanevans/careers

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Table 1(1 The 1 argest !etailers

in the 3(+(, 21!an0 Company 4 +ales 5million6 7 of stores 7 of employees

1 Wal!art "1#,$1" %,%1% 1,&$&,'''

" Home (epot )&,))& 1,&%$ ")*,&''

& +roger )','#$ &,)&% "$$,'''% ears %1,'-$ ",#*' &1','''

) arget &#,&*" 1,&$1 ""&,)''

* Albertson/s &-,#&1 ",%'' ""','''

- +mart &-,'"$ ",1)' "%',)")

$ 0ostco &%,-#- &*# *%,)''

# afeway &%,&'1 1,--& 1#&,'''

1' .0. 2enney &",''% &,--' "-','''

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'igure 1( The /igh Costs and

ow %rofits of !etailing

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'igure 1(" . Typical Channel of

8istribution

9anufacturer

Wholesaler

'inal

Consumer

Retailer

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'igure 1($ The !etailer:s !ole in

the +orting %rocess

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9ulti-Channel !etailing

A retailer sells to consumers through

multiple retail formats

Web sites

2hysical stores

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'igure 1(& ;(C( %enney and

9ulti-Channel !etailing

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!elationship 9anagement .mong

!etailers and +uppliers3 8isagreements may occur<

control over channel

profit allocationnumber of competing retailers

product displays

promotional supportpayment terms

operating flexibility

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8istribution Types

3 =xclusive4 suppliers ma5e agreements with

one or few retailers that designate the latter

as the only ones in a specified geographicarea to carry certain brands or products

3 #ntensive4 suppliers sell through as many

retailers as possible

3 +elective4 suppliers sell through a moderate

number of retailers

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'igure 1(* Comparing

8istribution Types

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'igure 1( +pecial Characteristics

.ffecting !etailers

!etailer:s+trategy

+mall.verage

+ale

#mpulse%urchase

%opularityof

+tores

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!etail +trategy

.n overall plan for guiding a retail firm

#nfluences the firm:s business activities#nfluences firm:s response to mar0et

forces

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+ix +teps in +trategic

%lanning1( 8efine the type of business

2( +et long-run and short-run objectives

( 8etermine the customer mar0et"( 8evise an overall, long-run plan

$( #mplement an integrated strategy

&( =valuate and correct

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'igure 1( >%ay ess ? =xport

9ore@ at Target

http://www.target.com/

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.spects of Target:s +trategy

Arowth-orientedobjectives

.ppeal to a primemar0et

8istinctive companyimage

'ocus

+trong customerservice

9ultiple points ofcontact

=mployee relations

#nnovationCommitment to

technology

Community

involvementConstantly

monitoringperformance

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'igure 1(1 .pplying the

!etail Concept

0ustomer 6rientation

0oordinated 7ffort

8alue driven

9oal 6rientation

Retailing

0oncept

!etail+trategy

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'igure 1(11 =liminating

+hopper )oredom

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Customer +ervice

3 .ctivities underta0en by a retailer inconjunction with the basic goods and

services it sells(+tore hours

%ar0ing

+hopper-friendlinessCredit acceptance

+alespeople

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'igure 1(12 . Customer

!espect Chec0list8o we trust our customersB

8o we stand behind what we sellB

#s 0eeping commitments to customersimportant to our companyB

8o we value customer timeB

8o we communicate with customersrespectfullyB

8o we treat all customers with respectB8o we than0 customers for their businessB

8o we respect employeesB

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!elationship !etailing

3 +ee0 to establish and maintain long-termbonds with customers, rather than act as

if each sales transaction is a completelynew encounter

: 0oncentrate on the total retail e;perience

: !onitor satisfaction

: tay in touch with customers

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=ffective !elationship

!etailing3 3se a win-win approach

: It is harder to get new customers than to

5eep e;isting ones happy3 8evelop a customer database

: 6ngoing customer contact is improved

with information on people/s attributes

and shopping behavior

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.pproaches to the +tudy of

!etailing

Institutional

Functional

Strategic

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%arts of Retail Management: A

Strategic Approach<uilding relationships and strategic planning

Retailing institutions

0onsumer behavior and informationgathering

7lements of retailing strategy

Integrating, analy=ing, and improving retailstrategy

berman ch 01

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