Download - Bus425 Chapter2
Types of Retailers
What is the opportunity?
Environmental Factors:
“Story of Stuff” (on blog)Macro-
Environment
CompetitorsCustomers
Micro-EnvironmentTechnology Social Issues
Ethical/LegalIssues
Political Issues
Environmental Issues
RETAILERETAILERR
Describing Different Types of Retailers
(Retail Mix)
CustomerService
Retail Strategy
Store Design& Display
Location
CommunicationsMix
MerchandiseAssortments
Pricing
General Trends in Retailing
• New Types of Retailers
• Increased Concentration
• Globalization
• Growth In Services Retailer
• Demise of Pure Electronic Retailers (Webvan, eToys, etc)
• Growth in Use of Multi-Channel Retailing by Traditional Retailers
• Increase Use of Technology to Reduce Cost, Increase Value Delivered
• New Types of Retailers
Describing Different Types of Retailers
(Retail Mix)
CustomerService
Retail Strategy
Store Design& Display
Location
CommunicationsMix
MerchandiseAssortments
Pricing
Type ofMerchandis
e
Variety and Assortment
A Critical Decision
Variety
Assortment
Services
Pricing
“Blockbuster was not concerned about Netflix because its research showed more than 90% of video
renters decide on the videos they want to watch the same day they rent
them.”
Environmental Factors
Macro-Environment
Competitors
Customers
Micro-EnvironmentTechnology Social Issues
Ethical/LegalIssues
Political &Economic Issues
Environmental Issues
RETAILERETAILERR
Oops...
Now this?
Apple Looking Less Shiny? Look Again.
Text
"When Steve came to us with this idea, it was a no-brainer," says Jim
Gianopolus, CEO of News Corp.'s (NWS) 20th Century Fox. While he
admits there are many other ways to get movies, he thinks Apple can
cut through the clutter. "I think this will be a transformative version of
the rental model," Gianopolus says. Holders of Blockbuster (BBI)
shares appear to concur. The company's shares plunged 17%
amid concern Apple will eat into its film-rental business.
January 16, 2008
Apple’s Strategy:Adding “Transformative”
ServiceVariety
Assortment
Services
Pricing
Characteristics ofFood Retailers
Group Activity
Variety
Assortment
Services
Pricing
•What online services do each of these retailers offer?
•What value do they add?
•What do they imply about the other elements of the marketing mix for this retailer?
•As a class - how do services offered vary within each main group (Food & Gen. Merchandise? Do any seem to be “standard”?
Group ActivityOnline Services
FOOD RETAILERS
• Safeway (Supermarket): http://shop.safeway.com/
• Target (Super Center): http://www.target.com/
• Costco (Warehouse Club): http://www.costco.com/
GENERAL MERCHANDISE RETAILERS
• Sears (Dept. Store): http://www.sears.com
• Abercrombie & Fitch (Specialty Store):http://www.abercrombie.com/
• Home Depot (Category Specialist):http://www.homedepot.com/
Group ActivityOnline Services
• Food Retailers•Primary Shopping Format for Food Sales
Growth Rates by Retail Format
• Fresh perishables
• Health-conscious& ethnic
• In-store experience
• Private brand labels
How supermarketsare competing
• Department Stores
• Specialty Stores
• Category Specialists
• Home Improvement Centers
• Discount Stores
• Drugstores
• Off-Price retailers
• Extreme Value Retailers
Types of General Merchandise Retailers
Royalty-Free/CORBIS
Department stores in an eroding market
•Attempting to increase the amount of exclusive merchandise they sell
•Undertaking marketing campaigns to develop strong images for their stores and brands
•Building better relationships with their key customers
Why Sears Must EngineerIts Own Makeover
Text
“With a potential recession on the horizon,
retail experts say it is now clear Chairman
Edward S. Lampert must engineer a radical
makeover of the 121-year-old retailer to
prove it can thrive alongside bigger rivals.
To halt the sales and profit declines, the
company's Sears and Kmart stores must
forge new roles for themselves that will
distinguish them in customers' eyes from
competitors such as Kohl's Corp., J.C.
Penney Co., Target Corp. and Wal-Mart
Stores Inc.
January 16, 2008
Issues in Discount Store Retailing
• Only Big Three Left
Wal-Mart, Kmart, Target
• Wal-Mart’s Dominance
• Differentiate Strategy
Wal-Mart = Low Price and Good value
Target = More Fashionable Apparel
• Competition from Category Specialists
Toys-R-Us, Circuit City, Sports Authority
McGraw-Hill Companies, Inc./Gary He, photographer
•Decline in Mall Shopping and Apparel Sales
•-Lack of New Fashions
•-Less Interest in Fashion
•-Increase Price Consciousness
•Lifestyle Formats – Abercrombie and Fitch and Hot Topics
McGraw-Hill Companies, Inc./Gary He, photographer
Issues in Specialty Store Retailing
• Consolidation – Walgreens, CVS, Rite-Aid
• Competition from Supermarkets, discount Stores and mail-in orders
• Evolution to a New Format
• Stand Alone Sites with Drive Thru Windows
• Offering more frequent purchase food items
• Improved systems provide personalized service in the pharmacy
Issues in Drug Store Retailing
• Deep and Narrow Assortments Destination Stores
• Low Price and Service
• Wholesaling to Business Customers and Retailing to Consumers
• Incredible Growth
Ryan McVay/Getty Images
Category Specialists
Services vs. Merchandise Retailers
Intangibility -Problems in Evaluating Service Quality
-Performance of Service Provider
Simultaneous Production and Delivery -Importance of Service Provider
Perishability -No Inventory, Must Fill Capacity
Inconsistency of the Offering -Importance of HR Management
Article Summary Assignment #1:
Write a two-page paper that addresses these issues
1. Find an article in a business publication about a retailer changing their retail strategy
2. What strategic elements are they changing? Customer Service? Pricing?
3. What factors within their macro-environment are the catalyst for this change?
4. What changes have occurred in their micro-environment?
5. What effect do they hope this will have on their customers behavior and/or perceptions
6. Do you think this will work? Why or why not? What are the risks?
Customer
Service
Retail Strategy
Store Design
& Display
Location
CommunicationsMix
Merchandise
Assortments
Pricing
Macro-Environment
Competitors
Customers
Micro-EnvironmentTechnology Social Issues
Ethical/LegalIssues
Political &Economic Issues
Environmental Issues
RETAILERRETAILER