RetailingRetailing Bricks and ClicksBricks and Clicks

Chapter SixteenChapter Sixteen

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Chapter ObjectivesChapter Objectives

Define retailing; understand how retailing Define retailing; understand how retailing evolves and some ethical issues in retailingevolves and some ethical issues in retailing

Understand how we classify retailersUnderstand how we classify retailers Describe the more common forms of Describe the more common forms of

nonstore retailing including B2C e-commercenonstore retailing including B2C e-commerce Understand the importance of store image to Understand the importance of store image to

a retail positioning strategy and explain how a retail positioning strategy and explain how a retailer can create a desirable image in the a retailer can create a desirable image in the marketplacemarketplace

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Real People, Real Choices: Real People, Real Choices: Decision Time at Eskimo Joe’sDecision Time at Eskimo Joe’s

Which strategy should Stan pursue? Which strategy should Stan pursue?

• Option 1:Option 1: Convert the beer bar into a Convert the beer bar into a full-service restaurantfull-service restaurant

• Option 2:Option 2: Continue operating as a beer Continue operating as a beer bar and try to offset lost beer sales with bar and try to offset lost beer sales with an increase in apparel sales an increase in apparel sales

• Option 3:Option 3: Close Eskimo Joe’s and Close Eskimo Joe’s and refocus resources on building the refocus resources on building the growing apparel businessgrowing apparel business

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Retailing: Special DeliveryRetailing: Special Delivery

Retailing: Retailing: The final stop in the distribution The final stop in the distribution channel in which organizations sell channel in which organizations sell goods and services to consumers for goods and services to consumers for their personal usetheir personal use

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Retailing is big business:Retailing is big business:• 2009 U.S. sales totaled $4.5 trillion2009 U.S. sales totaled $4.5 trillion

• More than one of every ten U.S. workers More than one of every ten U.S. workers is employed in retailingis employed in retailing

Retailers:Retailers:• Belong to a channel of distributionBelong to a channel of distribution

• Provide time, place, and ownership Provide time, place, and ownership utility to customersutility to customers

• Retailing is different around the globeRetailing is different around the globe

Retailing: A Mixed (Shopping) Retailing: A Mixed (Shopping) BagBag

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Figure 16.1Figure 16.1The Wheel of RetailingThe Wheel of Retailing

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Figure 16.2Figure 16.2The Retail Life CycleThe Retail Life Cycle

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Netgrocer

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The Evolution Continues: The Evolution Continues: What’s “In Store” for the Future?What’s “In Store” for the Future?

Factors motivating Factors motivating retail innovation:retail innovation:• The changing The changing

economyeconomy

• Demographics Demographics

• TechnologyTechnology

• GlobalizationGlobalization

Consumer Confidence Index

National Retail Federation

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Popup StoresPopup Stores

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The Evolution Continues: The Evolution Continues: What’s “In Store” for the Future?What’s “In Store” for the Future?

Factors motivating Factors motivating retail innovation:retail innovation:• The changing The changing

economyeconomy

• Demographics Demographics

• TechnologyTechnology

• GlobalizationGlobalization

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Ethical Problems in RetailingEthical Problems in Retailing

Shrinkage problems may stem from Shrinkage problems may stem from customers or employeescustomers or employees• ShopliftingShoplifting

• Employee theftEmployee theft

• Retail borrowingRetail borrowing Ethical treatment of customersEthical treatment of customers• Not discouraging certain types of Not discouraging certain types of

customers from shopping customers from shopping

• Not selling harmful products to at risk Not selling harmful products to at risk groupsgroups

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From Mom-and-Pop to Super From Mom-and-Pop to Super Walmart: Walmart: Classifying Retail StoresClassifying Retail Stores

The classification of retail stores The classification of retail stores provides a method by which retailers provides a method by which retailers can benchmark performancecan benchmark performance

Several classification methods exist:Several classification methods exist:

• Classifying by what they sell (the Classifying by what they sell (the merchandise mix)merchandise mix)

• Classifying by level of serviceClassifying by level of service

• Classifying by merchandise selectionClassifying by merchandise selection

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Figure 16.3Figure 16.3Classification of Book Retailers Classification of Book Retailers

by Merchandise Selectionby Merchandise Selection

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Table 16.1Table 16.1Major Types of RetailersMajor Types of Retailers

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Convenience StoresConvenience Stores

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Category KillersCategory Killers

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Table 16.1Table 16.1Major Types of Retailers, Cont.Major Types of Retailers, Cont.

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Department StoresDepartment Stores

This ad for a British department store emphasizes quality service and merchandise variety.

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Figure 16.4Figure 16.4Types of Nonstore RetailingTypes of Nonstore Retailing

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Automatic VendingAutomatic Vending

Automatic vendingAutomatic vending

• Usually best suited to low-cost Usually best suited to low-cost convenience goodsconvenience goods

• Offers many benefits to consumers and Offers many benefits to consumers and marketersmarketers

Japanese vending machines

It’s DebatableIt’s DebatableClass Discussion QuestionClass Discussion Question

Modern vending machines are capable of selling a broad range of products. Visit Vending.Com to learn how even live fishing bait can be sold via vending machines.

What are the advantages and disadvantages of selling bait via a vending machine? Would you try it if you were a retailer? How about as a customer? Where do you stand?

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Table 16.2Table 16.2Benefits and Limitations of Benefits and Limitations of

E-CommerceE-Commerce

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Virtual channels are unlikely to replace Virtual channels are unlikely to replace traditional onestraditional ones

Stores must continue to evolve to lure Stores must continue to evolve to lure shoppers away from computersshoppers away from computers

• In destination retailing, consumers will In destination retailing, consumers will visit stores for the total entertainment visit stores for the total entertainment experienceexperience

B2C’s Effect on Retailing’s B2C’s Effect on Retailing’s FutureFuture

Visit Mall of America

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Retail as TheatreRetail as Theatre

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The line between retailing and entertainment is blurring. Stores must position themselves to both attract consumers and stand apart from the competition.

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Figure 16.5Figure 16.5Elements of a Store ImageElements of a Store Image

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DesignPortfolio

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Figure 16.6Figure 16.6Grid LayoutGrid Layout

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Developing a Store Positioning Developing a Store Positioning Strategy: Retailing as TheaterStrategy: Retailing as Theater

Store personnelStore personnel• Should complement a store’s imageShould complement a store’s image

• Dress, attitude, and knowledge are Dress, attitude, and knowledge are importantimportant

Pricing policyPricing policy• Price points are price ranges of a Price points are price ranges of a

store’s merchandise store’s merchandise

• Price points play a role in establishing Price points play a role in establishing its imageits image

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Developing a Store Positioning Developing a Store Positioning Strategy: Retailing as TheaterStrategy: Retailing as Theater

Build the theatre: store locationBuild the theatre: store location

• Types of store locationsTypes of store locationsBusiness districts Business districts Shopping centersShopping centersFreestanding retailersFreestanding retailersNontraditional store locationsNontraditional store locations

• Site selection is criticalSite selection is critical““Location, location, location”Location, location, location”

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Figure 16.7Figure 16.7Business DistrictsBusiness Districts

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Figure 16.7Figure 16.7Shopping CentersShopping Centers

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Figure 16.7Figure 16.7Freestanding StoresFreestanding Stores

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Figure 16.7Figure 16.7Nontraditional Store LocationsNontraditional Store Locations

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Developing a Store Positioning Developing a Store Positioning Strategy: Retailing as TheaterStrategy: Retailing as Theater

Site selection: choose where to buildSite selection: choose where to build• Trade areaTrade area

A geographic zone that accounts for the A geographic zone that accounts for the majority of a store’s sales and majority of a store’s sales and customerscustomers

• Factors considered in site selectionFactors considered in site selectionSite evaluationSite evaluationAge profileAge profileCommunity life cycleCommunity life cycleCompetitionCompetition

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Real People, Real Choices: Real People, Real Choices: Decision Made at Eskimo Joe’sDecision Made at Eskimo Joe’s

Stan chose option 1Stan chose option 1

•Why do you think Stan chose to convert Why do you think Stan chose to convert the beer bar and reopen Eskimo Joe’s the beer bar and reopen Eskimo Joe’s as a trendy restaurant?as a trendy restaurant?

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